Securities

Browse articles from all of our Newsletters related to Securities.

February 24, 2017 - Inside MBS & ABS

MBS & ABS Issuance at a Glance

One page of issuance data.


February 24, 2017 - Inside MBS & ABS

Compliance Pros Weigh Likely Effect Risk Retention Will Have on Structured Aircraft, SFR Securitization

It is two months into 2017, and compliance attorneys are still trying to discern some of the finer nuances of applying the Dodd-Frank Act’s risk-retention requirements to various sectors of the secondary market beyond residential MBS. One such area is structured aircraft portfolio transactions. In a recently issued white paper, attorneys from the Clifford Chance law firm and four other U.S. law firms looked at applying the rules to a typical issuance of securities by a newly formed special-purpose vehicle that owns (or will own) a portfolio of aircraft and related leases. They note...


February 24, 2017 - Inside MBS & ABS

Lenders Record Partial Win over RFC; NY Court Rules on Statute of Limitations; SIFMA Files Brief

A Minnesota state court has rendered a judgment that could substantially limit the amount of damages Residential Funding Co. and its successor-in-interest, the ResCap Liquidating Trust, could recover if it were ever to prevail on its claims in any given lawsuit against correspondent lenders, according to industry attorneys. On Feb. 1, the District Court of Hennepin County held that RFC and ResCap would not be able to pursue loan-by-loan damages associated with a repurchase claim and, thus, could not use a repurchase price “formula” to establish damages, said Philip Stein, a partner with Bilzin Sumberg Baena Price & Axelrod, in an analysis. The decision favored...


February 24, 2017 - Inside MBS & ABS

TGI Friday’s Brings First Whole-Business Securitization of 2017 With $450 Million Deal

Securities investors will soon be able to have a taste of the revenues generated by Long Island iced teas and Jack Daniel’s glazed chicken strips as TGI Friday’s is set to issue a $450.0 million whole-business securitization. The planned TGIF Funding LLC Series 2017-1 received ratings from Kroll Bond Rating Agency and S&P Global Ratings this month. KBRA assigned BBB ratings to both tranches of the security while S&P assigned BBB- ratings. The deal follows...


February 24, 2017 - Inside MBS & ABS

Appeals Court Bars GSE Shareholders from Making Illegal Treasury Sweep Claims, but ‘Breach of Contract’ Possible

In a long-awaited decision, the United States Court of Appeals for the District of Columbia Circuit ruled this week against Fannie Mae and Freddie Mac shareholders who have been contesting the Treasury Department’s net worth sweep of the government-sponsored enterprises’ earnings. On Feb. 21, Judge Royce Lamberth ruled shareholders in Perry Capital LLC vs. Treasury, et al, are barred by the 2008 Housing and Economic Recovery Act from making their claims. Perry sued...


February 24, 2017 - Inside MBS & ABS

Nonprime MBS Sector Buzzing with Activity, New Deals from Angel, Galton and Citadel

The once dormant market for MBS backed by newly originated nonprime loans is beginning to pick up steam, with deals unveiled by affiliates of Angel Oak Home Loans and Galton Funding. But that’s not all. According to industry officials who work in the sector, Citadel Servicing Corp., Irvine, CA, is planning a rated security for some time in May and there’s even talk that bond investing giant PIMCO might get in on the action. Origination and investment banking sources, speaking under the condition of anonymity, told...


February 24, 2017 - Inside MBS & ABS

Fannie/Freddie Retained Portfolios Continued Shrinking in 2016, Mostly by Shedding MBS

The retained mortgage investments of Fannie Mae and Freddie Mac declined by 17.5 percent over the course of 2016, keeping the two government-sponsored enterprises on track to meet targets set as conditions of their conservatorships. The two GSEs reported a combined $570.78 billion in retained mortgage investments at yearend, down 7.3 percent from September. The biggest decline was in their holdings of MBS, which fell 23.8 percent for the year. Back in the early 2000s, Fannie and Freddie were...[Includes one data table]


February 24, 2017 - Inside MBS & ABS

Revised GOP Reform Plan Would Significantly Loosen Rules For Rating Services, Roll Back Dodd-Frank Standards

Planned revisions to the Financial CHOICE Act would loosen regulation of rating services, according to a recent memo by Rep. Jeb Hensarling, R-TX, chairman of the House Financial Services Committee. Hensarling sent the memo to the leadership team of the House Financial Services Committee this month detailing changes that will be included in hise so-called CHOICE Act 2.0. The expected revisions to standards for nationally recognized statistical rating organizations go well beyond the rollbacks included in the version of the CHOICE Act that was introduced in September. The 2016 bill would have repealed...


February 24, 2017 - Inside MBS & ABS

Mortgage REIT Holdings of Residential MBS Fall Slightly in 4Q16, Preliminary Estimates Show

Most real estate investment trusts that invest in MBS and other mortgage-related assets reported declines in their holdings of agency and non-agency securities during the fourth quarter, according to a new Inside MBS & ABS ranking and analysis. The top publicly traded REITs had a combined residential MBS portfolio valued at $228.28 billion as of the end of 2016. That was down 3.5 percent from the previous quarter and off 6.5 percent from the end of 2015. The figures are preliminary because several smaller REITs have not yet reported fourth-quarter results. Agency MBS continued...[Includes one data table]


February 24, 2017 - IMFnews

Looser Underwriting on Jumbos Backing Galton’s New MBS

Moody’s said many of the contributors to the MBS are small, regional entities that lack the sophistication of larger, more established originators.


February 24, 2017 - IMFnews

Redwood Earned $25 Million in 4Q, Sees Strong Jumbo MBS Pricing, Will Expand ‘Choice’

Redwood CEO Marty Hughes said pricing for jumbo MBS is currently strong, with execution on issuance better than execution for whole loan sales.


February 23, 2017 - IMFnews

Short Takes: More on Ocwen’s CFPB Problem / An Invitation to Write a NORA Letter / MSR Buying Dreams Up in Smoke? / Ocwen for Sale Eventually? / A New Hire for ClosingCorp

The disclosure comes on the heels of a recent legal settlement in California that paves the way for Ocwen to buy servicing rights once again...


February 23, 2017 - Inside Mortgage Finance

Wholesale-Broker Channel Saw Drop in Volume During 4Q16, Retail and Correspondent Steady

The relatively strong mortgage origination volume late in 2016 propped up production levels in all three major channels, according to a new Inside Mortgage Finance ranking and analysis. Mortgage brokers saw the biggest decline in volume during the fourth quarter, as production slipped 6.7 percent from the previous three-month cycle to an estimated $56.0 billion. But even with the late-year decline, the wholesale-broker market had...[Includes four data tables]


February 23, 2017 - IMFnews

Angel Oak Set to Issue its First Nonprime MBS Deal of the Year

The Angel Oak family of mortgage lenders finished 2016 with roughly $700 million of nonprime/non-QM originations, according to officials at the company.


February 23, 2017 - IMFnews

Wholesale-Broker Production Suffers the Most in 4Q16, Down 6.7 Percent

Caliber Home Loans climbed into second place in the wholesale-broker market thanks to a huge 63.7 percent gain in annual funding volume.


February 22, 2017 - IMFnews

Short Takes: A Huge Rally for Fannie, Freddie Common (for Today At Least) / Will Investors Lose Patience with Pershing Square and Bill Ackman? / FIG Purchase by Japanese Bank Won’t Affect New Residential / Parkside Expands Jumbo Offerings

Market watchers must be wondering just how long investors will continue to believe in the GSE “bet” made by hedge fund manager Pershing Square Capital Management.


February 21, 2017 - IMFnews

U.S. Appeals Court Rules for Government in Key GSE Case; Price of Fannie, Freddie Common Clocked

Writing for the majority, the Appeals Court notes: “We hold that the stockholders’ statutory claims are barred by the Recovery Act’s strict limitation on judicial review …"


February 21, 2017 - IMFnews

Banks Increase MBS Holdings – Went on a Buying Spree of Ginnie Mae Product in 4Q16

Bank holdings of Fannie Mae and Freddie Mac pass-through securities were up a more modest 0.6 percent from the third quarter…


February 17, 2017 - Inside FHA/VA Lending

Debt Burdens Crept Slightly Higher In 2016 for FHA and VA Borrowers

FHA and VA borrowers took on slightly greater payment obligations in 2016 than they have in previous years, according to a new analysis and servicer ranking by Inside FHA/VA Lending. The average debt-to-income ratio for FHA loans securitized in Ginnie Mae mortgage-backed securities last year was 40.4 percent, up about half a percentage point from 2015. The average VA DTI ratio nudged up slightly to 38.3 percent. Average credit scores in the FHA program drifted slightly lower, while climbing 1.9 points for VA loans. The differences in credit quality between the two programs remained substantial: the VA attracts borrowers with higher credit scores and lower DTI ratios who take on larger loans. Some 36.3 percent of VA loans backing Ginnie MBS issued last year had credit scores of 740 and up, while just 13.2 percent of FHA loans fell in that category. Meanwhile, 67.1 percent of FHA loans had ...


February 17, 2017 - IMFnews

What We’re Hearing: Huge GSE Profits, Don’t Get Used to It / The Perfect (Earnings) Storm / A Ginnie Solution for the GSEs? / PHH’s New Strategy / Aide to HUD Nominee Ben Carson Fired for Writings Critical of Trump

One former Fannie Mae official told us that stellar profits posted by the two are “just about done.”


February 17, 2017 - Inside MBS & ABS

MBS & ABS Issuance at a Glance

One page of issuance data.


February 17, 2017 - Inside MBS & ABS

Fed’s Bullard: Shrinking Balance Sheet Could Begin, Yellen: Fed Won’t Sell MBS, Will Use Runoff Instead

The chatter about the Federal Reserve shrinking its massive $4.5 trillion balance sheet and its huge $1.7 trillion portfolio of agency MBS has continued in recent days, with one Fed official talking up the idea and another describing how the U.S. central bank plans to do it. Federal Reserve Bank of St. Louis President James Bullard said in a speech last week that the Fed could begin normalizing its balance sheet. “The Fed’s balance sheet has been an important monetary policy tool during the period of near-zero policy rates,” Bullard said. Thus far, the Fed’s Open Market Committee has not set...


February 17, 2017 - Inside MBS & ABS

Replacing DFA Mortgage Rules Without Replacing Them Threatens RMBS Credit Quality, Moody’s Says

Weighing in on President Trump’s recent executive order related to the Dodd-Frank Act, analysts at Moody’s Investors Service said ditching the major mortgage regulations promulgated under the law would be negative for residential MBS unless it’s done carefully. “Any significant repeal of the Dodd-Frank Act’s mortgage-related provisions without effective alternatives would weaken residential RMBS credit quality because these provisions have strengthened the credit quality of mortgage originations, improved servicing practices and bolstered the credit integrity of RMBS structures,” the analysts said in a new report issued earlier this week. Their report then detailed...


February 17, 2017 - Inside MBS & ABS

Key Players in GSE Reform: Treasury Secretary Mnuchin, Commerce Chief Wilbur Ross, Craig Phillips and Others

Now that investment banker Steven Mnuchin has been installed as the Treasury secretary, work can begin on finding a solution to Fannie Mae and Freddie Mac, the giant government guarantors that serve as the linchpin to housing and mortgage markets. For the most part, senior mortgage officials who have been in the business for a decade or more applauded President Trump’s choice of Mnuchin, pointing to his days as the head of MBS trading at Goldman Sachs & Co. “At the very least, this is...


February 17, 2017 - Inside MBS & ABS

Freddie Reports $4.9 Billion in Net Income for 4Q16 Thanks in Part to Assist from Rising Interest Rates

Freddie Mac reported a net income of $4.85 billion in the fourth quarter, more than double its earnings from the previous quarter and lifting its full-year income to $7.82 billion. The government-sponsored enterprise released its earnings this week, posting one of its best profits ever in the fourth quarter. Net income for the quarter was fueled in part by gains on derivatives which amounted to $6.38 billion. “Interest rates went up an unusually large amount in the fourth quarter, therefore you saw an unusually large gain in the accounting,” Freddie CEO Donald Layton told Inside MBS & ABS. Freddie also reported...


February 17, 2017 - Inside MBS & ABS

Blackstone’s Next Mortgage Conquest: Fix-and- Flip Lenders That Could Lead to Securitization

Wall Street giant The Blackstone Group this week revealed its investment in “fix and flip” lenders B2R Finance, Charlotte, and Jordan Capital Finance, Chicago, spurring talk that eventually the firm may enter the fledgling nonprime residential market. One nonprime executive, requesting anonymity, told Inside MBS & ABS that he has had several discussions with Blackstone-related companies about partnering with his shop. Issuing MBS is one of the company’s goals, he said, adding: “They want in.” Over the past three years, Blackstone has made...


February 17, 2017 - Inside MBS & ABS

New Nonprime MBS from Invictus Illustrates How Rating Services Differ on AAA Ratings

Rating services appear to be taking differing approaches to rating nonprime MBS backed by new originations. The first nonprime MBS from an affiliate of Invictus Capital Partners received preliminary AAA ratings from Kroll Bond Rating Agency, Morningstar Credit Ratings and S&P Global Ratings. Those three firms did not rate...


February 17, 2017 - Inside MBS & ABS

OCC’s Denial of Favorable Capital Treatment for Chase Portfolio Risk-Transfer MBS May Deter Others

The Office of the Comptroller of the Currency’s denial of favorable capital treatment to a non-agency MBS issued by JPMorgan Chase last year could hinder efforts aimed at convincing banks to return to the non-agency MBS market, according to industry analysts. JPMorgan Chase issued two unique non-agency MBS last year with a total unpaid principal balance of $4.53 billion. The so-called portfolio risk-transfer deals accounted for a whopping 48.6 percent of the prime non-agency MBS issued in 2016. Chase packaged...


February 17, 2017 - Inside MBS & ABS

Banks Up Their Holdings of Agency MBS During 4Q16 With Buying Spree in Ginnie Securities

Banks and savings institutions maintained their healthy appetite for agency single-family MBS during the fourth quarter of 2016, according to a new Inside MBS & ABS ranking and analysis. Banks and thrifts held a record $1.254 trillion of agency MBS, up 2.2 percent from the end of the third quarter and an increase of 12.4 percent from a year ago. The biggest gains were in holdings of Ginnie Mae MBS, which also happen to be the fastest-growing component of the agency securities market. Bank and thrift holdings of Ginnie pass-throughs jumped...[Includes two data tables]


February 17, 2017 - IMFnews

Fannie Mae Has a Blowout 4Q16: Net Profit Hits $5 Billion; A Perfectly Good Storm?

Fannie Mae CEO Timothy Mayopoulos is setting the table for challenging times ahead, issuing caution about the GSE’s dwindling capital position…


February 16, 2017 - IMFnews

A Blowout 4Q16 Profit for Fannie Mae: $5 Billion; $3.9 Billion in Gains from Derivatives

In a conference call with reporters Friday morning, Fannie CEO Tim Mayopoulos noted: “While we expect to remain profitable on an annual basis for the foreseeable future, due to our declining and limited capital reserves and the potential for significant volatility in our financial results, we could experience a net worth deficit in a future quarter.”


February 16, 2017 - IMFnews

Short Takes: What Does Bruce Berkowitz Think? / Freddie Exploring SFR Market / BB&T Building New Servicing Center / CoreLogic CEO on Medical Leave / loanDepot Executive Jumps Ship for Wisconsin Lender

While most banks are running away from the business of servicing home mortgages, BB&T appears to like the space...


February 16, 2017 - IMFnews

Freddie Mac Hits an Earnings Grand Slam in 4Q16: $4.8 Billion in Net Income; Gains from Derivatives Top $6.3 Billion

In a few weeks, almost all of that profit will be swept into the coffers of the U.S. Treasury, which supported the GSE during its money losing years...


February 15, 2017 - IMFnews

Freddie Mac Hits an Earnings Grand Slam in 4Q16: $4.8 Billion in Net Income; Gains from Derivatives Top $6.3 Billion

When Freddie makes that next “dividend” payment, its “account surplus” with Treasury will total $34.6 billion: federal assistance of $71.3 billion since September 2008 versus dividend payments of $105.9 billion.


February 15, 2017 - IMFnews

MBS and ABS Sectors Adjusting to Risk-Retention Requirements

Sponsors can generally meet the requirements by retaining the most subordinate tranches of the securitization equaling at least 5.0 percent of the deal…


February 15, 2017 - IMFnews

Sen. Crapo, Fed Chair Yellen Agree Housing Finance Reform is Urgent

Fed Chairman Janet Yellen on the future of Fannie and Freddie: “…I would hope that Congress would decide explicitly on what the government’s role is and if there are guarantees, that they would be recognized and priced appropriately.”


February 14, 2017 - IMFnews

As Rates Rise, MBS Liquidity Improves. The Wild Card: the Fed’s Plan to ‘Lighten’ Its Balance Sheet

Agency MBS trading volumes peaked back in 2008 – the height of the financial crisis – at $344.9 billion daily.


February 14, 2017 - IMFnews

Another New Entrant to the Nonprime MBS Market: Galton

Mariner is an investment advisor that manages roughly $13.5 billion in assets...


February 14, 2017 - IMFnews

Inching Up Ever So Slightly: The Percentage of GSE Loans With Lower Credit Scores

The apparent easing of credit terms in the Fannie/Freddie market has been moving at a glacial pace…


February 13, 2017 - IMFnews

IMA and Phoenix Capital Hit Market with New MSR Deals

Phoenix Capital is offering a private jumbo MSR portfolio sized at $216 million…


February 13, 2017 - IMFnews

JPMorgan Readies Large Non-Agency MBS Including Many Conforming Jumbo Mortgages

Contributors to deal include Quicken Loans and United Shore Financial Services, both top-ranked nonbank originators...


February 13, 2017 - IMFnews

Are GSE Loan Sellers Finally Easing up on Credit Standards?

In the purchase market, GSE sellers appeared to reach to qualify more borrowers…


February 10, 2017 - Inside MBS & ABS

MBS & ABS Issuance at a Glance

One page of issuance data.


February 10, 2017 - Inside MBS & ABS

MBA Reform Plan Seeks to Preserve TBA Market, But Analyst Says Explicit Guarantee Questionable

The need to preserve liquidity and transparency in the existing to-be-announced market was an important component of the Mortgage Bankers Association’s newly-released plan for housing finance reform, according to Deutsche Bank Securities. Jeana Curro, research analyst with Deutsche, said a handful of provisions in the MBA’s latest proposal stand out as improvements from the industry group’s previous ideas on how to reform Fannie Mae and Freddie Mac. She agreed...


February 10, 2017 - Inside MBS & ABS

Fintech Panel Navigates the Pros and Cons Of OCC Charter, Marketplace Lending

The proposal by the Office of the Comptroller of the Currency to create a special-purpose national bank charter for financial technology companies, including marketplace lenders, stirred up significantly different views during a panel discussion sponsored this week by the Brookings Institute. “The fact that this charter will be designed as one not to support innovation, but to support the biggest and most well-funded players, ends up being bad for consumers because it tilts the market against the true innovators,” said Margaret Liu, senior vice president and deputy general counsel for the Conference of State Bank Supervisors. But, Richard Neiman, head of regulatory and government affairs for Lending Club and former New York state banking commissioner, said...


February 10, 2017 - Inside MBS & ABS

Higher Interest Rates May Prompt Banks to Unload Fixed-Rate Product, Result in Fewer GSE Refis

Analysts at DBRS anticipate some notable changes in the residential mortgage securitization market this year, mostly as a result of expected higher interest rates. “Despite a healthy housing market recovery, post-crisis non-agency RMBS issuance has remained stagnant for several reasons,” said Quincy Tang, managing director of RMBS structured finance, in a new research report issued early this week. In addition to the dominance of Fannie Mae and Freddie Mac and bank balance-sheet capacity, “a persistently low interest rate environment has rendered...


February 10, 2017 - Inside MBS & ABS

Securitization Industry Participants Pushing for Delay Of Pending Swap-Margin Posting Requirements

Swap-margin posting requirements established by federal regulators are set to take effect on March 1. The Structured Finance Industry Group is leading a push for delayed implementation as securities issuers are having trouble determining how to comply with the standards. The swap-margin rules were required by the Dodd-Frank Act and drafted in 2015 by federal banking regulators and the Commodity Futures Trading Commission. Unlike requirements set by European regulators, the U.S. rules lack a general exemption from compliance for securitization special-purpose vehicles. Securitization SPVs issue various types of MBS and ABS. SFIG noted...


February 10, 2017 - Inside MBS & ABS

As Rates Rise, MBS Liquidity Improves. The Wild Card: the Fed’s Plan to ‘Lighten’ Its Balance Sheet

The average daily trading volume in agency MBS increased to $229.8 billion during January, the second best reading of the past year, and a sign that liquidity is improving, thanks in part to higher interest rates. According to figures compiled by the Securities Industry and Financial Markets Association, the January reading was better than the daily trading averages posted for the past four years, which ranged from a low of $178.0 billion in 2014 to a high of $222.8 billion in 2013. Agency trading volumes peaked...


February 10, 2017 - Inside MBS & ABS

Mortgage Securitization Rate Slumped in 2016, But Market Was Catching Up as the Year Came to a Close

Only 69.1 percent of home mortgages originated in 2016 wound up in agency or non-agency MBS issued last year, according to a new Inside MBS & ABS analysis. It was the second-lowest annual mortgage-securitization rate on record, and the third year in a row that the rate failed to reach the 70.0 percent mark. The low securitization rate mostly results from the fact that relatively few jumbo mortgages get out of bank portfolios and into the non-agency MBS market. According to Inside Mortgage Finance estimates, some $381.0 billion of jumbo mortgages were originated...[Includes one data table]


February 10, 2017 - Inside MBS & ABS

Industry Supports Trump Review of Dodd-Frank; Will There Be a Repeal of ATR, QM, QRM?

Industry observers and groups expressed support this week for President Trump’s move to put the Dodd-Frank Act under the microscope, with an eye toward scaling back its regulatory burden and possibly replacing at least parts of it with more pro-market reforms. Late last week, Trump signed an executive order that directs the Treasury secretary to consult with the heads of the agencies that comprise the Financial Stability Oversight Council, review the current regulatory structure for the U.S. financial system, and report back in 120 days. The order also lays...


Poll

With rates higher this year, there has been talk of lenders liberalizing their underwriting standards in an effort to increase volume and make up for lower refis.

Do you think your shop will loosen standards over the coming three months?

Yes, but not by much.
Yes, by a lot.
Yes and, heck, we may even do non-QM lending.
No, not at all.
No and we may even tighten credit.

vote to see results