Securities

Browse articles from all of our Newsletters related to Securities.

September 30, 2016 - IMFnews

What We’re Hearing: The Mortgage Customer and Wells Fargo? / This Too Shall Blow Over … Maybe / Houston-Based Mortgage Firm Up For Grabs / Question for Promontory: Do You Really Want to be Owned by IBM? / MBA Chief: Hillary Clearer on Housing Issues

Some good news: at least Wells Fargo's share price is not in Ocwen territory...


September 30, 2016 - Inside MBS & ABS

MBS & ABS Issuance at a Glance

One page of issuance data.


September 30, 2016 - Inside MBS & ABS

Ginnie Mae Improperly Allowed Uninsured Loans to Remain in MBS Pools for a Year or More, Says IG

Ginnie Mae has allowed hundreds of uninsured single-family loans to remain in its MBS pools for a year or longer because it does not have a process for lenders to remove such loans, according to an audit by the Department of Housing and Urban Development inspector general. The audit report said Ginnie allowed at least 345 uninsured single-family loans worth approximately $50 million to remain in its pools for more than one year. The IG reviewed a statistical sample of 85 of 363 pooled loans that had no insurance endorsement date and found 83 of them were uninsured more than one year after they were issued. Ginnie requires...


September 30, 2016 - Inside MBS & ABS

Issuers Say Strong Oversight Plan is Key to Successful Subservicing, Avoiding Liability

Ginnie Mae issuers that use subservicers need to have a proper subservicing oversight plan that encompasses all aspects of their Ginnie servicing portfolio to avoid servicing mishaps and liability. Participants in a recent Ginnie Mae summit in Washington, DC, pooled their collective experiences with subservicers to come up with a general oversight plan touching on every servicing function. These functions include escrow, collections, customer service, notifications, loss mitigation, loan modification, payoff, claims and maintenance. The decision to use a subservicer is...


September 30, 2016 - Inside MBS & ABS

A Year After TRID, the ‘Scratch & Dent’ Market For Such Loans Isn’t Going Away. But It is Slowing

The scratch-and-dent market for residential loans that have TRID-related errors is still alive and (mostly) well, even though originators have had almost a year to adjust to the new disclosure regime introduced by the Consumer Financial Protection Bureau. “This market will never be exhausted,” said Jeff Bode, chairman and CEO of Mid America Mortgage, Addison, TX, one of the most active buyers of mortgages that have errors related to consumer disclosures tied to the Truth in Lending Act and the Real Estate Settlement Procedures Act. Of course, it’s...


September 30, 2016 - Inside MBS & ABS

Fitch Ranked First in Non-Agency MBS Ratings at Midpoint in 2016, S&P Tops in Non-Mortgage ABS

Fitch Ratings was the most active rating service in the sluggish non-agency MBS market through the first half of 2016, according to a new Inside MBS & ABS ranking. Standard & Poor’s was the top rating agency in the more active non-mortgage ABS market. Fitch rated just seven non-agency MBS issued during the first six months of the year, which totaled $4.74 billion in volume. While that equaled 30.9 percent of total non-agency MBS issuance for the period, many deals were private placements without ratings. Fitch’s share of rated issuance was 55.4 percent. DBRS ranked...[Includes two data tables]


September 30, 2016 - Inside MBS & ABS

ABS Backed by Unsecured Consumer Loans Drawing Scrutiny From Investors, Especially Loans from Marketplace Lenders

A boom in ABS backed by unsecured consumer loans requires closer scrutiny, according to analysts at Fitch Ratings. Marketplace lenders have boosted the issuance of such ABS in recent years, though the rating service warned that deal performance is difficult to predict. “Many firms in this space have legitimate value propositions and apparent technological advantages,” Fitch said. “However, they have yet to prove their underwriting merit.” Since September 2013, at least 31 ABS totaling $4.60 billion backed by consumer loans from marketplace lenders have been issued...


September 30, 2016 - Inside MBS & ABS

Strong Demand for Non-QMs in Secondary Market, MBS Issuance Seen as Key for Growth in Originations

As recently as three years ago, few companies were willing to finance originations of nonprime mortgages, either via warehouse funding or acquiring the paper as whole loans. Daniel Perl, CEO of Citadel Servicing, said there are currently a number of Wall Street companies and other firms that will provide a certain amount of liquidity for one to three years, while demand for whole loans and MBS is also increasing. “There’s a lot to be said for this market today that you couldn’t say three years ago,” he said earlier this month during a webinar hosted by Inside Mortgage Finance. Tom Hutchens, a senior vice president of sales and marketing at Angel Oak Mortgage Solutions, said...


September 30, 2016 - Inside MBS & ABS

Money Market Funds Have Increased Holdings of GSE Debt, But Assets Are Shifting Into Government Funds

Money market funds held some $114.16 billion of Fannie Mae and Freddie Mac debt as of the end of August, a 3.0 percent increase from the end of last year, according to a new Inside MBS & ABS analysis of data compiled by the Office of Financial Research. But new regulations have spurred a migration from prime money market funds into government funds, said the OFR, a unit of the U.S. Department of Treasury. The shift from prime to government funds reflects new Securities and Exchange Commission rules aimed at making prime funds less vulnerable to investor runs, OFR analysts explained in a recent research brief. Although the new SEC requirements don’t become mandatory until Oct. 14, 2016, fund managers began...[Includes one data table]


September 30, 2016 - IMFnews

New Residential Bundles Excess Spread from MSRs on Non-Agency MBS into a New $345 Million ABS

The deal is part of New Residential’s efforts to generate income from excess MSRs…


September 30, 2016 - Inside MBS & ABS

A Few Additional Details Revealed About New ‘Minimum’ G-Fee for Fannie and Freddie MBS

Documents obtained by Inside MBS & ABS reveal that Fannie Mae and Freddie Mac were required to charge the same “minimum” guaranty fee for single-family guaranty commitments issued on or after Aug. 1. Both government-sponsored enterprises received identical marching orders for minimum g-fees: 44 basis points for 30-year mortgages and 30 bps for 15-year loans. And, according to copies of emails from the Federal Housing Finance Agency following up on the agency’s initial July 29 directive, an unspecified number of Freddie sellers were paying less than the minimum. The names of these sellers were redacted...[Includes one data table]


September 30, 2016 - IMFnews

Exclusive: Fannie and Freddie Received Marching Orders from the FHFA: Have the Same G-Fees

The directives make clear that the minimum g-fee applies only to swap transactions…


September 29, 2016 - IMFnews

Will the Wells Fargo Account Scandal Hit the Megabank’s Mortgage Business? Correspondent Sellers Fear ‘Reputational’ Risk

Meanwhile, other lenders said they are hearing reports of correspondent originators slowing down the sale of closed loans to Wells.


September 29, 2016 - IMFnews

A Significant Increase in ‘Agency’ Jumbos for 2Q; GSE Loan Limit to Increase?

The baseline agency conforming loan limit likely will rise slightly next year…


September 28, 2016 - IMFnews

Ginnie Mae Keeping a Close Eye on Servicing Sales, Liquidity

Ginnie Mae wants to make sure that issuers are not selling all their good loans and retaining the potential dregs…


September 28, 2016 - IMFnews

Redwood CEO: JPMorgan ‘Ahead of Everybody Else’ with Non-Agency MBS Packed with GSE-Eligible Loans

The Redwood CEO said the MBS offer a number of benefits to Chase, including effectively cutting the guaranty fee…


September 27, 2016 - IMFnews

Short Takes: Trump Has Some Choice Words for Janet Yellen / The CFPB Now Carries the Wells Fargo ‘Shield’ / FBR Likes MI Sector / Alt Credit Score Models? / A New CEO for New Castle

Apparently, not everyone is a fan of low rates. Take Donald Trump, for instance...


September 27, 2016 - IMFnews

Freddie Mac Rolls Out Front-End Risk-Sharing Pilot; But No Benefit for Lenders

One trade group source had this to say about the arrangement: “There’s no g-fee break? Then it doesn’t sound like front-end coverage that helps lenders.”


September 27, 2016 - IMFnews

Ditech Readies $300 Million ABS Backed by Servicing Advances

A few days ago, Ditech’s parent company filed an 8-K with the SEC, disclosing delinquency information on its GSE servicing portfolio.


September 26, 2016 - IMFnews

Fannie Mae Rolls Out DU 10.0 Featuring ‘Trended Credit Data’

Fannie said DU 10.0 also will help borrowers who have multiple financed properties, eliminating certain eligibility overlays…


September 26, 2016 - IMFnews

UWM Provides Grant Funding for Brokers to Open Their Own Shops; Money Doesn’t Have to be Repaid

Requirement for the program include: three years of mortgage experience, a statement on production goals, anticipated operational structure and a description of the company.


September 23, 2016 - Inside FHA/VA Lending

Liquidity, Net Worth Issues Persist But Nothing Ginnie Can’t Manage

Ginnie Mae continues to wrestle with issuers lacking liquidity and net worth although the number of such cases has gone down significantly, thanks to tight oversight, according to the agency’s top counterparty risk officer. Briefing participants at this year’s Ginnie Mae summit in Washington, DC, Zack Skochko, director of counterparty risk, reported that some issuers are still struggling to comply with Ginnie Mae’s liquidity and net worth requirements.A number of small issuers failed their liquidity and net worth audits this year by not maintaining the minimum $1 million cash or 10 basis points of outstanding Ginnie securities required to participate in the agency’s mortgage-backed securities program. Ginnie Mae also requires issuers to meet a minimum net worth of $2.5 million plus 35 bps of the issuer’s total effective single-family obligations The requirements were designed to ensure that the ...


September 23, 2016 - Inside FHA/VA Lending

Streamline Refi Segment Causing Problems for VA, Ginnie Investors

The Department of Veterans Affairs is working on a change to its existing streamline refinancing policy to address a problem that is giving VA and Ginnie Mae the fits. Under the VA’s qualified-mortgage rule, a VA borrower must wait six months and show six months’ worth of mortgage payments before they can refinance into an IRRRL (Interest Rate Reduction Refinance Loan) and take advantage of the lower rate. However, it seems not all VA lenders are adhering to the rule and that a good number are refinancing veterans into IRRRLs even before the mandatory seasoning period ends for fear interest rates might rise and the borrower might not benefit from the lower rate. “I’ve redone the numbers in 20 different directions on how much a borrower would save if they had to wait two more months and the rate went up a quarter of a point because they lost those two months ...


September 23, 2016 - IMFnews

What We’re Hearing: GSE Loan Limits to Move Higher? / No One Feels Sorry for Wells Fargo / The King of the Cross-Sell is now the King of Pain / Maybe the CFPB Needs a Kick in the… / MBA’s Dave Stevens Doesn’t Expect Peace to Break Out / Skyline Still Hiring

Mortgage lenders, start your engines: the Fannie Mae/Freddie Mac loan limit is set to rise...


September 23, 2016 - Inside MBS & ABS

MBS & ABS Issuance at a Glance

One page of issuance data.


September 23, 2016 - Inside MBS & ABS

Shades of 2015 as FOMC Maintains Status Quo, Consensus is a December Raise, Same as Last Year

As the third quarter draws to a close without a single increase in interest rates from the Federal Reserve, 2016 is increasingly looking like 2015, when the Fed said it would raise rates multiple times sometime during the year, only to wait until its very last meeting before finally raising them. Similarly, the U.S. central bank said it would raise rates four times in 2016, and so far, it has yet to raise rates once this year. This week, Fed Chair Janet Yellen explicitly stated she expects a rate increase this year, as do a majority of voting members of the Fed’s Open Market Committee. However, since they decided to take a pass this time around, the Fed only has...


September 23, 2016 - Inside MBS & ABS

Some Issuers Still Failing Ginnie Mae’s Net Worth, Liquidity Requirements Although Cure Rate is High

There have been a number of MBS issuers that have fallen short of Ginnie Mae’s strict liquidity and net worth requirements for all participants, but tighter oversight has cured most, if not of all of the cases, according to Ginnie’s top counterparty risk chief. Speaking this week at the annual Ginnie Mae summit in Washington, DC, Zack Skochko, director of counterparty risk, said several issuers have failed liquidity audits in 2016 by not maintaining the minimum $1 million cash or 10 basis points of outstanding Ginnie securities required to participate in the agency’s MBS program. The agency also requires...


September 23, 2016 - Inside MBS & ABS

Judge Orders Government to Produce More Documents In GSE Shareholder Case, Shows Signs of Annoyance

In a potential legal coup for Fannie Mae and Freddie Mac shareholders, Federal Claims Court Judge Margaret Sweeney ordered the U.S. Treasury Department and Federal Housing Finance Agency to turn over another large batch of documents in relation to the Fairholme Funds Inc. v. United States, et al. net worth sweep case. Sweeney this week forced the government agencies to produce more documents, close to 60 this time, for the plaintiff’s attorneys. The agencies have attempted to keep the various memos, emails, presentations and other communications hidden under executive privilege. Shareholders say...


September 23, 2016 - Inside MBS & ABS

FHFA Has Settled Almost All of Its MBS Lawsuits With One Glaring Exception: RBS/Greenwich Capital

Five years have passed since the Federal Housing Finance Agency filed suit against 18 Wall Street firms and banks for peddling nonprime MBS to Fannie Mae and Freddie Mac in the years leading up to the housing crisis. All of the defendants have settled or lost with one glaring exception: Royal Bank of Scotland. As for when (and if) RBS will settle, that’s a different and complicated matter. The bank is presently owned by the British government, which took control of it during the financial crisis. In other words, any settlement might entail taxpayer money and cause a political controversy in the U.K. And the bill could be...


September 23, 2016 - Inside MBS & ABS

Industry Participants Have Difficulty Determining Who’s Responsible for Risk Retention from Certain Issuers

The complex financing arrangements used by certain investors and a lack of clarity from federal regulators can make it difficult to determine the entity responsible for meeting risk-retention requirements in some MBS and ABS, according to Charles Sweet, senior counsel at the law firm of Morgan Lewis. The Dodd-Frank Act generally required the sponsor of a security to retain at least 5.0 percent of the risk from the security. Sweet said determining the sponsor of an MBS or ABS can be fairly straightforward when one company originates the assets, services the receivables and initiates securitization, as in the case of an ABS backed by automobile retail contracts from a captive finance company of a car manufacturer. However, where securitization roles are more dispersed, Sweet said...


September 23, 2016 - Inside MBS & ABS

Trade Groups Representing Small/Mid-Sized GSE Seller-Servicers Circle the Wagons Around the CSP

Some small and medium-sized lenders continue to fear that their access to the secondary mortgage market could be hampered if the fledgling common securitization platform of Fannie Mae and Freddie Mac is turned over to the private sector. At this point, the CSP is a joint venture owned by the two government-sponsored enterprises with a long-term future as uncertain as that of the GSEs themselves. But there are rumors that Congress may transfer the CSP to private owners sooner than expected. The vehicle for such a transfer would not be...


September 23, 2016 - Inside MBS & ABS

Sample MBS Deal-Agent Agreement Released, But More Work Ahead Before Widespread Adoption

The effort by some non-agency MBS investors to create an entity to protect investors took a step forward as a sample deal-agent agreement was circulated late last week in advance of the ABS East conference in Miami. A deal agent would be tasked with protecting the interests of investors in non-agency MBS, including duties of care and loyalty. The leaders of the effort, James Callahan, a principal at Pentalpha Global and Alessandro Pagani, head of securitized assets at Loomis Sayles & Company, said the market should adopt the agreement as the template for new non-agency MBS. However, the sample agreement leaves...


September 23, 2016 - Inside MBS & ABS

Other Investors Stepped Up as Federal Reserve Holdings Of Agency MBS Declined Slightly in Second Quarter

Foreign investors, commercial banks and mutual funds all beefed up their holdings of agency MBS during the second quarter of 2016, according to a new Inside MBS & ABS analysis. The Federal Reserve remained the biggest investor in the agency MBS market with $1.744 trillion on its books at the end of June. That accounted for 29.7 percent of the $5.867 trillion of single-family agency MBS outstanding at that time, but it was down 0.5 percent from the end of March. The central bank’s MBS holdings vary slightly in the Fed’s weekly snapshots as pending transactions wait to clear, but its game plan is to hold its portfolio steady by reinvesting principal payments. The single-family agency MBS market grew...[Includes two data tables]


September 23, 2016 - IMFnews

Some Issuers Still Failing Ginnie Mae’s Net Worth and Liquidity Requirements, but…

Ginnie expects issuers to actively participate by issuing, servicing or subservicing agency MBS…


September 23, 2016 - IMFnews

Foreign Investors, Others Beef Up Their Investment in Agency MBS

According to Treasury Department reports, overseas investors held $821.3 billion of Fannie, Freddie and Ginnie MBS at the end of June, a 5.0 percent increase from March.


September 21, 2016 - IMFnews

Former Clayton Chief Joe D’Urso Lands at Pretium Partners

Founded by former Goldman Sachs executive Donald Mullen, Pretium Partners bills itself as a specialized investment management firm with roughly $6.5 billion of assets under management.


September 20, 2016 - IMFnews

Mortgage Trade Groups Fear an 'October Surprise' on the GSE CSP

“We’re extremely concerned the CSP would be transferred to a nonprofit or a corporation where the board members include executives from JPMorgan Chase or GE Capital,” CMLA's Corso said.


September 20, 2016 - IMFnews

JPM Prepares Another Jumbo MBS, First Deal in More than a Month

Despite improvement in securitization returns, jumbo whole loan sales are still more profitable, KBW said.


September 20, 2016 - IMFnews

On the Rise Again: Bank Repurchases of Mortgages

All of the second-quarter increase can be attributed to Bank of America, which reported $372.0 million in repurchases for the period – up $67.0 million from the first quarter.


September 19, 2016 - IMFnews

Phoenix Flow Deal Could Yield $3 Billion in Product

The identity of the seller was not revealed in the offering circular except to say the company is “well capitalized.”


September 19, 2016 - IMFnews

Credit Unions Voice Concerns over GSE CSP Project. A Level Playing Field?

NAFCU wants the FHFA to preserve existing Fannie and Freddie securities so they don’t become unmarketable after the launch…


September 19, 2016 - IMFnews

Ginnie Chief Tozer Lays it on the Line About MSR Values, Liquidity

Senior Vice President of Issuer and Portfolio Management Michael Drayne said recently the revised acknowledgement agreement could be ready by the end of September.


September 19, 2016 - IMFnews

Deal Agent Concept for Non-Agency MBS Closer to Reality with Release of Sample Document

However, the sample deal agent agreement doesn’t address one of the remaining controversial issues: how much to pay for their services.


September 19, 2016 - IMFnews

GSEs Have A Strong August; Market Share Gains?

Fannie and Freddie could top last year’s $824.8 billion in single-family MBS issuance by the time 2016 is over…


September 16, 2016 - Inside MBS & ABS

MBS & ABS Issuance at a Glance

One page of issuance data.


September 16, 2016 - Inside MBS & ABS

Federal Court Appoints Lead Master To Sift Through UBS Loans for Breaches

A federal district court judge in Manhattan has named a lead master to review 9,342 mortgages for material breaches following a put-back trial against UBS Real Estate Securities. The trial in the U.S. District Court for the Southern District of New York will determine whether UBS breached certain representations and warranties and may have to repurchase the defective loans originally pooled in three trusts. U.S. Bank, the trustee for all three pools, is seeking more than $2 billion in damages, court filings show. U.S. Bank sued...


September 16, 2016 - Inside MBS & ABS

Clouds on the Auto Loan ABS Horizon: Both Prime, Subprime Weaker M/M, Y/Y, S&P Finds

Investors in auto loan ABS may need to buckle up. Both prime and subprime auto loan ABS have weakened month-over-month and year-over-year, according to S&P Global Ratings. “Collateral performance in the U.S. prime auto loan ABS sector was weaker in July, with net losses and 60-plus-day delinquencies increasing month-over-month, while recovery rates decreased,” the S&P analysts said. “Collateral performance for the subprime sector deteriorated...


September 16, 2016 - Inside MBS & ABS

BNY Mellon Expands Servicing Oversight Business by Handling Reporting to GSEs for Many Smaller Servicers

Bank of New York Mellon has expanded its servicing oversight business by looking beyond the shrinking non-agency MBS market. The company recently started handling reporting duties for many small servicers on mortgages serviced for the government-sponsored enterprises. For 25 years, BNY Mellon has been a master servicer on non-agency MBS. The role involves oversight of primary servicers. BNY Mellon’s master servicing portfolio for non-agency MBS has declined along with the total amount of non-agency MBS outstanding. The firm handled...


September 16, 2016 - Inside MBS & ABS

Judges in Kentucky and Virginia Dismiss Two Separate GSE Shareholder Cases

Individual investors in Fannie Mae and Freddie Mac stock lost separate legal battles to inspect the corporate records of Freddie and prove that the Treasury sweep of the government-sponsored enterprises’ profits is damaging and unjust. In the case of Arnetia Joyce Robinson v. The Federal Housing Finance Agency, et al., the shareholder plaintiff argued that her investments were materially damaged when FHFA and the Treasury Department implemented the net worth sweep back in 2012. Robinson argued...


September 16, 2016 - Inside MBS & ABS

Oversight Seen as Protecting Investors in Expected MBS From Marketplace Lenders, Rating Implications Unclear

Regulations and practices in the mortgage market will help protect investors in MBS backed by residential mortgages from marketplace lenders, according to Moody’s Investors Service. However, it’s not clear if the protections will be enough to offset the rating penalties often applied to originators and assets that lack historical performance records. Moody’s published its analysis last week, noting that while no residential MBS has been issued by a marketplace lender as yet, the firm expects issuance at some point. Marketplace lenders – the most prominent of which is Social Finance – connect...


Poll

After the November elections, how long will it take for a new Congress and White House to pass GSE reform legislation?

I’m confident a bill will be passed the first year.
2 to 3 years. GSE reform is complicated.
Sadly it won’t happen in a Clinton or Trump first term.
Not in my lifetime.

vote to see results
Housing Pulse