Bear Stearns re-hires mortgage trader

Bear Stearns announced today that they would rehire Russell Middleton as a trader for its mortgage-backed securities desk.

Middleton left Bear Stearns in 2005 and was working at HSBC Holdings up until last month when he was fired as the UK bank closed the mortgage bond desk at its US securities unit. Middleton trades mortgage-backed securities issued by government-sponsored enterprises Fannie Mae and Freddie Mac, and government-owned Ginnie Mae. The $4 trillion “agency MBS” market has been relatively immune from the credit crisis in subprime debt and mortgage bonds from other issuers since payments are guaranteed to investors.

With financing for “non-agency” debt now too costly to justify, U.S. lenders are steering production toward loans eligible for agency MBS. Market share for Fannie Mae, Freddie Mac and Ginnie Mae securities has climbed above 80 percent this quarter, almost double that of 2005 when Wall Street banks were able to raise cheaper money from private investors, according to UBS research.

To read more about Bear Stearns re-hires mortgage trader Middleton head on over to Reuters.