Treasury Seeks Asset Managers for Bad Loans

Asset managers interested in working for the Treasury Department will have to submit a proposal to handle either whole loans or mortgage-backed securities by 5 p.m. EST Oct. 8. In outlining its selection process, Treasury officials stress that they will be racing to sign up asset managers. "Given the urgent need to implement the Troubled Assets Relief Program quickly, the selection process for asset managers may involve extremely short deadlines for submitting information and for traveling to Washington, D.C. for meetings and interviews," a Treasury memo says. Meanwhile, securities asset managers will be expected to purchase and manage MBS backed by prime, alternative-A, subprime, and commercial real estate mortgages. In addition, they will be expected to manage "MBS collateralized debt obligations, and possibly other types of securities acquired to promote market stability." Whole loan managers will also handle a range of products, including residential first mortgages, home equity loans, second-lien loans, and CRE mortgages.