UBS AG (UBSN.VX: Quote, Profile, Research, Stock Buzz) is halting its widely read weekly mortgage strategy report after more than 15 years of publication as the bank broadly scales down in the home loan business, including the closure of its asset-backed securities group, sources said.
UBS Securities plans to shut down sales and trading in ABS -- which include risky mortgage securities -- in New York and London over the next month or so, the sources said, reported Reuters.
The moves follow UBS's announcement last week that it would eliminate another 2,000 jobs at its investment bank, including cuts in its real estate and securitization businesses. A push by the Swiss bank into mortgage assets such as subprime loans has resulted in write-downs of $42 billion, the most of any bank in Europe.
Mortgage trading will be reduced to so-called agency mortgage bonds that are staples of investment-grade portfolios and less risky since they are guaranteed by government controlled finance companies Fannie Mae and Freddie Mac.
"The firm is shutting down its non-agency operations but will maintain an agency presence," according to one source, who said up to 40 jobs in the U.S. and abroad may be affected. At least 15 to 20 of those positions are based in New York.
UBS strategists led by Laurie Goodman late on Tuesday published their last official "Mortgage Strategist," a weekly collection of research that sought to demystify complex issues related to residential and commercial mortgage debt, and make trading recommendations for investors, other sources said.
Goodman did not return a call, and UBS spokesmen declined to comment on the mortgage strategy or ABS groups.
Goodman launched the Mortgage Strategist while at Paine Webber in 1993, building its reputation after the firm's acquisition by UBS in 2000, said Linda Lowell, a co-founder of the publication who now runs mortgage consulting firm Offstreet Research LLC.