Non-Agency RMBS Get PPIP Lift But No Bottoming Out Seen

A slight pickup in non-agency residential mortgage-backed securities prices has been seen in response to the government's latest Public-Private Investment Plan and Term Asset-Backed Securities Loan Facility initiatives, but a fair amount of pessimism linked to other issues persists in the market. There has been a pickup in nonagency RMBS and commercial MBS prices as a result of the PPIP and TALF moves that has been more muted on the RMBS side, said Ron D'Vari, chief executive officer and founder of the New York-based New Oak Capital, confirmed on Tuesday. But the gains have not reversed recent declines from uncertainty about government modification and cramdown plans, he said. Non-agency MBS have risen on average about two to four points in price over the last few days due to some optimism that the government is working to bring transparency and liquidity back to the market, Frank Pallotta, executive vice president at Loan Value Group, Rumson, N.J. said Tuesday. However, economic concerns persist, he said. "Nothing is fundamentally different [economically]," said Mr. Pallotta. "I don't think this is a bottoming out."