Securities

Browse articles from all of our Newsletters related to Securities.

December 6, 2016 - IMFnews

Higher GSE Loan Limits Won’t Have Much of an Impact on Jumbos

Of the $292.98 billion in non-agency jumbo mortgages originated in 2015, 3.1 percent were in areas where the loan balance would have been eligible for delivery to the GSEs under the loan limits set to take effect in January.


December 6, 2016 - IMFnews

Warehouse Sector Continues to Hum Along, but Managers Concerned about Rising Rates

Despite the uptick in rates, warehouse providers appear to be happy (for now) and, like their nonbank clients, most expect the competition to suffer and not them.


December 2, 2016 - Inside FHA/VA Lending

FHA, VA Deliveries to Ginnie Mae Increase During First Nine Months

Total FHA and VA originations increased during the first nine months of 2016 compared to the same period last year, although VA was more active, posting a double-digit production increase, according to an analysis of Ginnie Mae data. Lenders delivered $201.0 billion of FHA loans to Ginnie single-family mortgage pools over the last three quarters, up 4.8 percent from the previous year. Approximately 65.4 percent and 29.3 percent of FHA loans securitized were purchase loans and refinances, respectively. The remainder was loan modifications. VA originations totaled $143.2 billion over the same period, up 22.3 percent from last year. Refinances accounted for 51.9 percent of volume and purchase loans comprised 47.0 percent. The share of FHA loans in agency mortgage-backed securities for the nine-month period was 19.5 percent and 13.9 percent for VA. FHA loans accounted for ...


December 2, 2016 - IMFnews

What We’re Hearing: Will the GSE-Investing PE Firms Get Greedy? / Buy Low, Sell High? / How Plugged In is Mnuchin? / Will Trump Try to Bring White Collar Jobs Back Home Too? / The Strange Case of Nebraska and FHA Loan Limits / Meg Burns Gets Promoted

Will the GSE-investing PE firms blow it?


December 2, 2016 - Inside MBS & ABS

MBS & ABS Issuance at a Glance

One page of issuance data.


December 2, 2016 - Inside MBS & ABS

Despite Restrictions, PACE Securitizations Are Picking Up, Market Outlook for 2017 Optimistic

Securitization of residential and commercial loans with Property Assessed Clean Energy (PACE) assessments has been growing over the last few years despite having only a few market players, prompting analysts to predict continued growth for the PACE securities market. Residential PACE financing has increased to $2.9 billion with 130,000 home upgrades since 2010, according to second quarter 2016 data from industry group PACE Nation. Commercial PACE financing, meanwhile, has grown to $304 million with 820 commercial projects over the same period. Three programs accounted...


December 2, 2016 - Inside MBS & ABS

Courtrooms Attempt to Wrap Up Several MBS Lawsuits Stemming from Financial Crisis

Several pending mortgage lawsuits spawned by the housing crisis are inching closer to closure, including an apparent victory for Bank of America. The Department of Justice let the deadline pass to appeal a ruling from May in which BofA, defending practices of Countrywide Financial, escaped having to pay more than $1 billion in penalties to the Federal Housing Finance Agency. In 2014, a federal judge ordered...


December 2, 2016 - Inside MBS & ABS

Rate Shock Doesn’t Portend Well for Bank, Overseas Investors in MBS, Analysts Say

Analysts at Wells Fargo Securities worry that the post-election rate shock is not a positive omen for bank and overseas investors in MBS. “Since the U.S. presidential election, the 10-year yield has sold off by 55 basis points in a matter of two weeks,” they said in a recent client note. “Although banks and overseas investors are typically looking to buy on dips, large selloffs do not bode well for demand from these investors right after a rate shock. For banks, a large rate shock results in a hit on their regulatory capital.” According to their calculations, during the week ending Nov. 9, 2016, the net realized gains on bank portfolios declined...


December 2, 2016 - Inside MBS & ABS

MBS Prices Continue to Dive as the Rates Climb; FNMA 3.5 Replaces the 3.0 as the Benchmark

The average daily trading volume in agency MBS hit a yearly high of $224.4 billion in October, according to figures compiled by the Securities Industry and Financial Markets Association. With liquidity improving, the year-to-date average now stands at $206.6 billion, compared to $198.7 billion in 2015. The November reading should be out by the end of next week. Investors might be...


December 2, 2016 - Inside MBS & ABS

DOJ’s MBS Case Against Deutsche Bank Could Be A Conflict of Interest for the Trump Administration

Democrats in the House Financial Services Committee raised concerns last week about how the Department of Justice will handle MBS-related charges against Deutsche Bank with President-elect Donald Trump set to take office. The Democrats called for strong oversight by eight inspectors general involved with regulators of the financial services industry, noting potential conflicts due to Trump’s business interests. “While federal ethics rules require nearly all government employees to recuse themselves from matters that affect their outside financial interests, these rules do not apply...


December 2, 2016 - Inside MBS & ABS

SFIG Proposes Standards for ABS from Marketplace Lenders, Aiming to Support Growth Without Regulation

The Structured Finance Industry Group published recommendations this week for loan-level data disclosure for ABS backed by unsecured consumer loans originated by marketplace lenders. The proposal was the first in a planned series of “Green Papers” from the trade group that will seek to support “responsible growth” in the issuance of ABS from marketplace lenders. “The best practices initiative, rooted in supporting the responsible growth of securitization in the marketplace sector, will seek to identify a framework of standards and work to identify gaps in application or understanding,” SFIG said. The trade group said...


December 2, 2016 - Inside MBS & ABS

Can Former MBS Trader Steve Mnuchin Privatize the GSEs? And What About the Government MBS Guaranty?

Shortly after being nominated by President-elect Donald Trump to be his Treasury secretary, investment banker Steve Mnuchin midweek dropped a bombshell on the mortgage market: Ending the conservatorships of Fannie Mae and Freddie Mac would be a top priority. For the most part, the mortgage industry cheered the news, believing that at the very least, Mnuchin would preserve the federal guaranty on existing MBS and into the future. In fact, the market seems to be betting on it. But now comes...


December 2, 2016 - Inside MBS & ABS

Agency MBS Production Slowed in November as Fannie Issuance Fell Sharply from Previous Month

New production of agency single-family MBS in November was down 8.2 percent from the previous month, according to a preliminary Inside MBS & ABS analysis. Fannie Mae, Freddie Mac and Ginnie Mae issued a combined $134.70 billion of single-family MBS in November, the lowest monthly total since July. A decline wasn’t unexpected: the housing market is on the downslope of its seasonal trend and rising mortgage interest rates are taking some of the steam out of the refinance market. What is a little unusual is...[Includes two data tables]


December 2, 2016 - IMFnews

Agency MBS Production Slowed in November. Fannie Issuance Down Sharply

Freddie Mac posted a 45.9 percent market share for November – 10.2 percentage points higher than in the previous month…


December 1, 2016 - IMFnews

A Done Deal: Fannie Mae Sells Its DC Headquarters – for $89 Million

All three buildings hit the market in October 2015. According to records from the District of Columbia’s Office of Tax and Revenue, the parcels were once valued at almost $200 million.


December 1, 2016 - IMFnews

GSE Common Once Deemed Worthless, Now Has a ‘Market Cap’ of $43.15 Billion

Based on current trading values, Fannie common now has a market capitalization rate (share price multiplied by number of shares) of $28.01 billion. Freddie common is valued at $15.14 billion.


December 1, 2016 - IMFnews

Moody’s Issues Caution on ‘Bank Statement’ Mortgages

More lenders are making “bank statement” loans these days, including both banks and nondepositories…


November 30, 2016 - IMFnews

Short Takes: High Hopes for GSE ‘Recap and Release’ / Mnuchin Will be Confirmed / Another Mortgage Deal for Incenter LLC / Arch in Huge Debt Offering / What’s $20 Trillion Among Friends?

In case you haven’t noticed: the national debt is ready to crack the $20 trillion mark – almost twice the dollar volume of outstanding residential debt in the United States.


November 30, 2016 - IMFnews

Bank Holdings of Non-Mortgage ABS Continued to Fade, But the Market Itself Stalled in 3Q16

The ABS market itself shrank slightly during the third quarter, according to data reported by the Securities Industry and Finance Markets Association...


November 30, 2016 - IMFnews

GSE Single-Family Business Slumped in October, Credit Box Unchanged

Expanding the credit box will be a major theme in the GSEs’ priorities for 2017, according to the FHFA.


November 30, 2016 - IMFnews

Incoming Treasury Chief Mnuchin: Resolving Fannie and Freddie a Top Priority. Share Prices Soar!

As IMFnews went to press Wednesday, Mnuchin said in a Fox TV interview that resolving Fannie and Freddie will be a top priority.


November 30, 2016 - IMFnews

Lone Star Readies Another MBS Backed by New Nonprime Mortgages

The mortgages were originated by Lone Star affiliate Caliber Home Loans, but also LendSure Mortgage and Sterling Bank & Trust.


November 29, 2016 - IMFnews

Nation’s Largest Wholesaler UWM Removes ‘Escrow Waiver’ Fee

Some see the move by UWM as a way to be more competitive in a declining origination market…


November 29, 2016 - IMFnews

FirstKey, New Rez Out with Separate Nonprime MBS Deals Backed by Seasoned Loans

In the FirstKey deal, the loans have seasoned for an average of 10 years…


November 29, 2016 - IMFnews

Mortgage Repurchases Rise Again, but there’s a Reason: BofA

The banking industry still has a hefty $4.59 billion of reserves for future repurchase expenses…


November 28, 2016 - IMFnews

Short Takes: Waiting on Doctor Carson (for HUD Secretary) / Wells Fargo Continues its Dominance in Two Channels / The Worth of GSE Common? / Watching the 10-Year / Moody’s on Primary Capital

Is the 10-year bond in for a massive correction? Maybe, maybe not...


November 28, 2016 - IMFnews

Investors Continue to Bid Up the Share Price of GSE Common. Can it Last?

Fannie Mae common has a “market cap” of $17.68 billion while Freddie is valued at $9.79 billion…


November 28, 2016 - IMFnews

AIG Is Leaving the MI Space, but It Still Likes Mortgages…

The insurance conglomerate is structuring direct investments in residential and commercial mortgages and other whole loan types…


November 28, 2016 - IMFnews

New SFIG ‘Green Paper’ Suggests Benchmark Reps & Warrants for Non-Agency MBS

Current R&W disclosures are seen as particularly inadequate for deals involving non-agency mortgages from multiple lenders…


November 28, 2016 - IMFnews

Final 3Q16 Tally: Brokers and Correspondents Gained Market Share, Retail Declines

In the broker/wholesale channel, United Wholesale Mortgage and Caliber Home Loans posted strong growth rates…


November 23, 2016 - Inside MBS & ABS

MBS & ABS Issuance at a Glance

One page of issuance data.


November 23, 2016 - Inside MBS & ABS

GSE Shareholder Case Attorney Details Plight of Fairholme in Ongoing Litigation

Fairholme Funds officials this week continued to press their case for restoring shareholder rights for private investors in Fannie Mae and Freddie Mac, expressing hope that the incoming Trump administration will be friendlier to their cause. In Fairholme Funds Inc. v. United States, et al, the plaintiffs argue that the net worth sweep imposed by the Treasury Department and Federal Housing Finance Agency was illegal and that the two government-sponsored enterprises were not in a “death spiral” at the time of the bailout as the government claims. During a conference call this week, Fairholme CEO Bruce Berkowitz said...


November 23, 2016 - Inside MBS & ABS

U.S. Swap Margin Posting Rules Could Impact New, Existing Structured Finance Transactions, Warns Fitch

New derivative rules requiring daily posting of two-way variation margin on affected derivatives could create uncertainties for structured finance transactions, warned Fitch Ratings in a recent analysis. U.S. banking regulators and the Commodity Futures Trading Commission have adopted the uncleared swap margin rules for covered swap entities. Specifically, registered swap dealers and all end users of derivative contracts must comply with margin collection, posting, segregation, and documentation requirements by March 1, 2017. New swaps executed after the 2017 effective date would...


November 23, 2016 - Inside MBS & ABS

Movement in Interest Rates Still Depends on Economic Data, Fed’s Yellen Tells Lawmakers

An increase in interest rates could take place “relatively soon,” if incoming economic data warrant it, Federal Reserve Chair Janet Yellen told members of Congress last week. Then again, maybe not. The Fed has held off...


November 23, 2016 - Inside MBS & ABS

Court Grants Cert in NovaStar; FHLB Claims versus RBS Dismissed; Ally Settles; Nomura/RBS to Pay Up

A U.S. district court judge in New York has certified a class of investors to move forward with mortgage-related fraud claims they have brought against three large banks. MBS investors led by plaintiff New Jersey Carpenters Health Fund sued units of Wells Fargo that were acquired from Wachovia Capital Markets, Royal Bank of Scotland and Deutsche Bank that helped underwrite $7.7 billion of MBS issued by failed subprime lender NovaStar Mortgage. The plaintiffs accused...


November 23, 2016 - Inside MBS & ABS

Bayview to Issue a Non-Agency MBS Backed by Vintage Simple-Interest Mortgages, While Still Building Inventory

An affiliate of Bayview Asset Management is preparing to issue a non-agency MBS backed by nearly 5,000 vintage “daily simple-interest” mortgages, according to presale reports by DBRS and Fitch Ratings. If the deal is positively accepted by investors, there’s the potential for more issuance as Bayview is servicing a somewhat large portfolio of the loans. The planned $241.2 million Bayview Opportunity Master Fund Trust 2016-SPL1 is stocked with mortgages originated about 10 years ago. The loans – most of which have fixed interest rates – have a weighted-average interest rate of 8.926 percent. The so-called DSI mortgages differ from a standard mortgage in the calculation of interest owed by the borrower. With a standard mortgage, interest owed is calculated...


November 23, 2016 - Inside MBS & ABS

AIG Looks to Increase Investments in Home Mortgages, Complete ‘Internal Securitization’ of Various Loan Types

American International Group is working to “rebalance its exposure to residential mortgages” after the company’s sale of United Guaranty, a private mortgage insurer. Douglas Dachille, an executive vice president and CIO at AIG, detailed a number of plans late last week in a presentation to investors. He said the insurance giant is structuring direct investments in residential and commercial mortgages and other whole loans. “The team is...


November 23, 2016 - Inside MBS & ABS

Bank Holdings of Non-Mortgage ABS Continued to Fade, But the Market Itself Stalled in Third Quarter

Commercial bank and savings institution holdings of non-agency ABS fell again during the third quarter of 2016, marking the 11th consecutive quarterly decline in the industry’s investment in the sector, a new Inside MBS & ABS analysis of call-report data reveals. Banks and thrifts held $128.55 billion of ABS on their balance sheets at the end of September, down 1.9 percent from the previous quarter. The industry’s aggregate ABS portfolio was off 8.8 percent from the same point in 2015. The ABS market itself shrank...[Includes two data tables]


November 23, 2016 - Inside MBS & ABS

SFIG Offers Benchmark for Reps and Warrants on Non-Agency MBS in Effort to Improve Transparency

The latest “Green Paper” from the Structured Finance Industry Group proposes that issuers of non-agency MBS improve transparency by comparing the representations and warranties on a new issuance with a set of benchmark reps and warrants. “A substantial population of investors have very clearly stated their collective belief that the current representation-and-warranty process is neither practically useful for its intended purpose, nor scalable,” according to the fourth SFIG Green Paper aimed at reviving the non-agency MBS market. Currently, non-agency MBS issuers provide...


November 22, 2016 - IMFnews

Short Takes: FCC Stiffs MBA / VA Refis Top Complaints to CFPB / New Residential Packages Servicing Advances from Ocwen / Cash-Out Refi Outlook

The MBA is considering its options to appeal the FTC's decision regarding the trade group's request for a mortgage-servicing exemption under the Telephone Consumer Protection Act.


November 22, 2016 - IMFnews

Ally to Pay $52.0 Million to Settle with DOJ on Issues Involving ResCap Subprime MBS

The settlement noted that the subprime MBS from ResCap included mortgages with looser underwriting standards than the underwriting guidelines that were disclosed to MBS investors.


November 21, 2016 - IMFnews

Short Takes: AIG to Acquire Mortgages / Interest Rates Under Trump / Ginnie Servicing Fee 'Inadequate' / $100,000 in MBA Scholarships

American International Group's plan to acquire residential mortgages is part of AIG’s effort to “rebalance” its exposure to mortgages after the sale of mortgage insurer United Guaranty to Arch Capital Group.


November 18, 2016 - IMFnews

Banks Upped Their Holdings of Residential MBS in 3Q16

Commercial banks and savings institutions boosted their holdings of residential MBS substantially during the third quarter, a new analysis of call-report data by Inside MBS & ABS reveals.


November 18, 2016 - Inside MBS & ABS

MBS & ABS Issuance at a Glance

One page of issuance data.


November 18, 2016 - Inside MBS & ABS

Groups Seek Broader SCOTUS Interpretation of CTS v. Waldburger, NY Allows MBS Case v. JPM

Three financial-industry trade associations submitted a joint amici brief to the Supreme Court of the U.S. seeking an end to the confusion over whether extender statutes that refer only to the “statute of limitations” should apply to the “statute of repose” as well. The circuit courts are split on the issue, with four courts deviating from a 2014 SCOTUS ruling in CTS v. Waldburger, in which property owners tried to hold CTS Corp., operator of an electronic plant in North Carolina, liable for damages from toxic contaminants on the land. The property owners filed...


November 18, 2016 - Inside MBS & ABS

Room for Growth as Verizon is Set to Issue the Second ABS Backed by Cell Phone Payment Plans

An affiliate of Verizon Communications will issue a $1.40 billion ABS backed by payment plans for cell phones, according to presale reports. It’s the second transaction of its kind from Verizon, with industry analysts projecting that issuance could increase due to widespread financing for cell phones and investor demands. Verizon Owner Trust 2016-2 received preliminary AAA ratings from Fitch Ratings and S&P Global Ratings. It’s larger than the $1.17 billion ABS Verizon issued in July and the senior tranche on the pending issuance includes slightly less credit enhancement, indicating increased comfort among rating services. The July issuance included...


November 18, 2016 - Inside MBS & ABS

Panelists Highlight Concern with Growing Fannie Mae, Freddie Mac Credit-Risk Sharing Program

The government-sponsored enterprises’ credit-risk transfer programs have been wildly popular with investors and many policymakers, but other industry observers see problems. One of the most outspoken critics is Tim Howard, a former Fannie Mae CFO, who sees a big difference between today’s CRT programs and the GSEs’ traditional method of laying off credit risk before they were taken into government conservatorship. “When I was at Fannie, the companies purchased...


November 18, 2016 - Inside MBS & ABS

President Trump Likely to Push Fed to Normalize; MBS, ABS, Credit Risk Transfers Also Affected

Investors are trying to make sense of the new political/economic landscape following the election of Donald Trump to be the next president, and how best to navigate his uncertain, and at times contradictory, signals during his campaign. Much of the conversation over the last week has focused on the likely effect the new regime will have on the Federal Reserve and its chair, Janet Yellen. Trump, who has been a fierce critic of the U.S. central bank, has indicated he won’t outright replace Yellen, but neither will he nominate her for a second term. And of course, what happens with the Fed will spill over, one way or the other, into the financial markets. “The Fed will normalize...


November 18, 2016 - Inside MBS & ABS

Freddie’s New $459.9 Million Whole Loan Deal Faulted for Limited Third-Party Due Diligence

Freddie Mac is set to issue a $459.92 million Whole Loan Securities transaction, according to a presale report from Moody’s Investors Service. The firm didn’t rate the senior tranche of the deal but did place a Baa1 rating on a mezzanine tranche of Freddie Mac Whole Loan Securities 2016-SC02. The government-sponsored enterprise priced the latest WLS transaction this week, with the deal expected to close next week. “We are pleased with the pricing levels and depth of investor participation in the WLS program,” said Kevin Palmer, senior vice president of credit risk transfer at Freddie. “We look forward to continued issuance in 2017.” Freddie has issued...


November 18, 2016 - Inside MBS & ABS

Banks Upped Their Holdings of Residential MBS In 3Q16, Focusing on GSE Pass-Through Market

Commercial banks and savings institutions boosted their holdings of residential MBS substantially during the third quarter, a new analysis of call-report data by Inside MBS & ABS reveals. Banks and thrifts held a record $1.732 trillion of residential MBS in their available-for-sale and held-to-maturity accounts at the end of September, a 2.9 percent increase from June, not including $46.3 billion in trading accounts. The emphasis was heavily on agency pass-through securities, with holdings of Fannie Mae and Freddie Mac MBS surging 6.6 percent higher. Ginnie Mae saw...[Includes two data tables]


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