MBS, ABS Issuance

Browse articles from all of our Newsletters related to MBS, ABS Issuance.

February 27, 2015 - Inside MBS & ABS

MBS & ABS Issuance at a Glance

One page of issuance data.


February 27, 2015 - Inside MBS & ABS

Euro Regulators Work on Framework for ‘High-Quality’ Securitization, U.S. Issuers Concerned About Consistency

The European Commission last week requested comments on a framework for simple, transparent and standardized securitization that would apply to issuance in the European Union. A number of other non-U.S. regulators are considering similar proposals, prompting MBS and ABS participants in the U.S. to call for coordination among international regulators. The EC said its priority is to create a sustainable market for high-quality securitization without repeating the mistakes made before the financial crisis. “A high-quality EU securitization framework will promote further integration of EU financial markets, help diversify funding sources and unlock capital, making it easier for banks to lend to households and businesses,” the EC said. The European regulator stressed...


February 20, 2015 - Inside FHA Lending

VA to Issue Final ‘Qualified Mortgage’ Rule in May

The Department of Veterans Affairs expects to have a finalized Qualified Mortgage (QM) rule by May to help clear up some issues that have arisen since the agency issued an interim final rule last spring. The VA issued the interim QM rule for comment on May 9, 2014, to define which VA loans will have QM status under the ability-to-repay (ATR) rule. Issued by the Consumer Financial Protection Bureau, the ATR rule provided temporary QM status to loans eligible for FHA insurance and guaranties by the VA and the Department of Agriculture’s Rural Housing Service. Eligible government-backed loans must be 30-year fixed-rate with no interest-only, negative amortization or balloon features. Total points and fees must not exceed 3 percent of the total loan amount for loans of $100,000 or more. Loans that meet the definition of a temporary VA-eligible QM are considered as in compliance with the ATR rule. They are designated as “safe harbor QMs,” provided they are not ...


February 20, 2015 - Inside FHA Lending

Tech Issues Delay HECM Financial Analysis Rule

The FHA has delayed the effective date of new guidance that will require reverse mortgage lenders to perform a financial assessment of applicants for a Home Equity Conversion Mortgage. The FHA indicated that the change was necessary to allow vendors and the Department of Housing and Urban Development to align their respective software before the new system can be operational. Those familiar with the technology said delivering the required system enhancements should not take long. The FHA said a new effective date should be expected within 30 to 60 days of the original March 2 effective date. It will be announced in a new mortgagee letter, the agency added. The new guidance requires lenders to evaluate HECM borrowers’ willingness and capacity to meet their obligations and to comply with program requirements. “Financial assessment” means doing a much more ...


February 20, 2015 - Inside FHA Lending

VA Lending Up in 4Q, Year Over Year

VA loan volume continued to rise in the fourth quarter of 2014, driven by low interest rates and a strong demand for the lower downpayment loans, according to an Inside FHA Lending analysis of Ginnie Mae/VA data. The volume of VA loans securitized in Ginnie Mae mortgage-backed securities rose 4.0 percent in the fourth quarter to $107.8 billion from the previous quarter, with more than half of the loans coming through the retail channel. Retailers accounted for $51.5 billion in VA loans securitized during the quarter while correspondents and brokers accounted for $44.4 billion and $11.9 billion, respectively. The overall average FICO score for VA loans was 707, with average loan-to-value and debt-to-income ratios of 95.0 percent and 38.2 percent, respectively, during the quarter. Correspondents came up big with VA purchase loans, accounting for $31.7 billion of the $65.1 billion in total purchase loans produced during the fourth quarter. Retail loan officers accounted for $28.5 billion while brokers brought in ... [ 1 chart ]


February 20, 2015 - Inside MBS & ABS

MBS & ABS Issuance at a Glance

One page of issuance data.


February 20, 2015 - Inside MBS & ABS

Fitch to Demand More Credit Support for 2015 CMBS Conduit Deals; Survey Predicts More Robust Market

Credit enhancement levels for commercial MBS increased in the last quarter of 2014, which could lead to higher credit-support requirements for 2015 CMBS deals, according to Fitch Ratings. “The rating agencies are increasing credit enhancements on each tier of the CMBS bonds being offered because the underwriting has become more aggressive or the collateral is weak,” said Stephen Renna, president and CEO of the CRE Financial Council (CREFC), an industry trade group. The requirement for more credit support on the conduit deals shows...


February 20, 2015 - Inside MBS & ABS

Securities Issuers Look to Stay the Course After SEC’s Disclosure Requirements Take Effect

The Securities and Exchange Commission’s update to Regulation AB won’t prompt many issuers to change whether they issue deals in the public market or private market, according to industry participants. After the so-called Reg AB2 takes effect, issuers of SEC-registered MBS and ABS will have to disclose more information. The regulation includes an exemption for 144A private placements, which could provide a way for issuers to avoid the SEC’s disclosure requirements. At the recent ABS Vegas conference sponsored by the Structured Finance Industry Group and Information Management Network, many issuers indicated....


February 13, 2015 - Inside Mortgage Trends

Using Default Probability Cuts Loss Exposure

Using “probability of default” values instead of credit scores to measure risk in a mortgage securitization can provide far more insight and dramatically cut loss exposure, according to a new white paper from VantageScore Solutions, a joint initiative created by the three major credit bureaus, Equifax, Experian and TransUnion. “Loan securitization has become an essential source of capital for consumer lenders of all sizes, playing a significant role in ...


February 13, 2015 - Inside The GSEs

GSE MBS Issuance Down in January as Refi Sputtered

Fannie Mae and Freddie Mac issued $57.72 billion of single-family mortgage-backed securities in January, a 7.8 percent decline from the previous month, according to a new Inside The GSEs ranking and analysis. Freddie actually increased its monthly volume by 7.3 percent from December levels, but Fannie production fell 15.6 percent. It’s not unusual for GSE monthly trends to fluctuate; Fannie’s MBS issuance was up sharply in December. Freddie’s production was buoyed slightly by some $199.3 million of modified mortgages that were securitized last month. And it’s not surprising that the flow of purchase mortgages into GSE securities fell 14.4 percent in January, as the housing market hit a seasonal cooling. However, refinance activity was also [includes exclusive charts] ...


February 13, 2015 - Inside MBS & ABS

MBS and ABS Issuers Focused on Regulation and Finding Ways to Attract More Investors to Market

Interest in the structured-finance market remains strong, but issuers continue to struggle with regulations and sometimes limited demand for their offerings. Just over 6,000 people registered for the ABS Vegas conference this week sponsored by the Structured Finance Industry Group and Information Management Network, up from more than 5,300 registrants in 2014. Jade Friedensohn, a senior vice president at IMN, said the conference set an attendance record for the structured-finance industry. A poll of attendees by the conference organizers suggested...


February 6, 2015 - Inside FHA Lending

More Issuer Entry Prompts More Data Collection


February 6, 2015 - Inside FHA Lending

Accounting Treatment of Past Due Loans Clarified

The Mortgage Bankers Association notched a win for small, independent issuers after the Financial Accounting Standards Board agreed with the group’s position on the accounting of seriously delinquent loans in Ginnie Mae pools. At issue is whether companies that service pools with loans that are 90 days or more delinquent should put those loans on their balance sheet even if they have no intention of buying the loans out of the pool. According to the MBA, a Big Four accounting firm issued controversial guidance which would have been burdensome for small mortgage-backed securities issuers that have limited funding and no incentive or history of buying defective loans out of pools. After months of exchanges, FASB staff finally agreed with the MBA’s view that the decision process involves two steps. First, a loan must be 90 days or more delinquent and trigger ...


February 6, 2015 - Inside MBS & ABS

MBS & ABS Issuance at a Glance

One page of issuance data.


February 6, 2015 - Inside MBS & ABS

Uncertainty About Fed’s Action on Interest Rates Prompts Concern About Impact on Securities Issuance

Issuance of jumbo MBS and ABS has grown since 2010, but pending Federal Reserve actions regarding interest rates could stop the trend this year, according to industry analysts. The Fed is expected by many to increase interest rates for the first time in years, perhaps as soon as the end of the second quarter of 2015. Standard & Poor’s warned last week that interest rate hikes could threaten the still-rebounding structured finance market. “The Fed’s normalization of monetary policy could create...


February 6, 2015 - Inside MBS & ABS

Securitization of Nonprime and Non-QM Loans Looking Like a Long Shot for 2015

Although there’s been plenty of talk about the securitization of nonprime loans that don’t fit the qualified mortgage criteria finally taking off this year, it’s not looking like a good bet. “We can’t do a security this year,” said Jeff Lemieux, vice president at Bayview Asset Management, which has been actively buying non-QM product geared toward the self-employed. Bayview is purchasing...


February 6, 2015 - Inside MBS & ABS

BlackRock Teams with Prosper on Planned ABS Backed By Peer-to-Peer Loans, a First

BlackRock Financial Management plans to issue a unique ABS backed by peer-to-peer consumer loans originated via the platform established by Prosper Marketplace. Moody’s Investors Service assigned ratings to Consumer Credit Origination Loan Trust 2015-1 last week, noting a number of issues for investors to consider. The ABS is expected to have a balance of $344.85 million. The loan pool Moody’s examined had a balance of $306.71 billion as of the end of December. Approximately 14 percent of the total assets are expected to be added after closing. The deal doesn’t have a projected closing date yet, according to Moody’s. The rating service assigned...


January 30, 2015 - Inside MBS & ABS

MBS & ABS Issuance at a Glance

One page of issuance data.


January 30, 2015 - Inside MBS & ABS

Little Incentive for Non-Agency MBS Issuers To Offer Deals Registered with the SEC

Issuers of non-agency MBS will likely continue to favor private placements over registering deals with the Securities and Exchange Commission, according to industry participants. While publicly registered deals in the ABS market and commercial MBS market are common, no non-agency MBS issued in 2014 was registered with the SEC. Instead, non-agency MBS issuers offered deals as 144A private placements. An official involved in the non-agency MBS market said...


January 23, 2015 - Inside FHA Lending

GNMA to Launch Issuer Scorecard in the Spring

Ginnie Mae will soon introduce the third prong of a strategy to improve its oversight of participants in its mortgage-backed securities program – a performance scorecard for issuers – and monitoring of its risk. Essentially a “scorecard,” the Issuer Operational Performance Profile (IOPP) will enable issuers to better understand and comply with Ginnie Mae’s expectations. It also provides a way for issuers to measure and improve their performance and compare it to the performance of their peers. Final testing and training for IOPP began this winter, with deployment expected “in early 2015,” the agency said. Issuers will be scored monthly based on a series of metrics. Each issuer will be rated against its peers by applying a weighting algorithm and, in some cases, adjusting for certain control factors. Each issuer will receive two scores: one for operational management and ...


January 23, 2015 - Inside FHA Lending

Low Rates, High Demand Power VA’s 3Q14 Surge

Production of loans with a VA guaranty was moderately strong in the third quarter of 2014, thanks to lower rates and increased demand for the no-downpayment loans, according to Inside FHA Lending’s analysis of the latest agency data. A 14.1 percent quarter-to-quarter surge helped the industry end last year’s first nine months with a total of $76.3 billion in VA loans, mostly purchase home mortgages taken out by a younger generation of war veterans. VA streamline refinancing also accounted for a substantial chunk of originations, 19.2 percent. Volume jumped from $19.5 billion in the first quarter of 2014 to $26.5 billion the following quarter. Lenders closed out the third quarter with $30.2 billion. Stanley Middleman, chief executive officer of Freedom Mortgage, said VA lending is on the upswing, driven by low interest rates. He thinks the VA home loan guaranty program has been ... [ 1 chart ]


January 23, 2015 - Inside Nonconforming Markets

Issuers Prep First Batch of Jumbo MBS for 2015

Redwood Trust, Credit Suisse and Two Harbors Investment are working on separate jumbo mortgage-backed securities that will be issued next week. The deals vary slightly by issuer, including some non-qualified mortgages in Redwood’s deal and sunset provisions on representations and warranties on Credit Suisse’s jumbo MBS. Redwood’s $338.80 million Sequoia Mortgage Trust 2015-1 is set to receive AAA rating with credit enhancement of 7.25 percent ...


January 23, 2015 - Inside Nonconforming Markets

Jumbo MBS Characteristics Shifting a Bit But Underwriting Standards Still Strong

Mortgages included in jumbo mortgage-backed securities in 2014 showed some shifting characteristics while maintaining strong underwriting overall, according to a new analysis by Inside Nonconforming Markets. Looser underwriting on jumbo mortgages has largely been at the fringes: some MBS have included a cluster of mortgages with combined loan-to-value ratios of 80 percent, a few borrowers with credit scores below 680 and ... [Includes one data chart]


January 23, 2015 - Inside MBS & ABS

MBS & ABS Issuance at a Glance

One page of issuance data.


January 23, 2015 - Inside MBS & ABS

Ginnie Aims for Spring Introduction of New Scorecard for Measuring Issuer Performance

Ginnie Mae plans to launch a performance-measuring tool, Issuer Operation Performance Profile (IOPP), to enable issuers to see how they stack up to the agency’s standards and make improvements. The agency did not specify a launch date but said the tool will be available “in early 2015.” It will be used to compare an issuer’s operations and defaults with those of its peers, along the lines of FHA’s compare ratio for lenders in Neighborhood Watch. The issuer scorecard is...


January 23, 2015 - Inside MBS & ABS

Despite the Loss of Three Top Executives, Cerberus-Controlled FirstKey Aims to Grow

FirstKey Mortgage, which has big plans in the non-agency space that include lending outside the qualified mortgage box and securitization, late this week saw the departure of three of its top executives, including CEO Bruce Witherell. According to industry officials familiar with the situation, FirstKey’s parent company, Cerberus, was beginning to take more of an active role in how the lender/issuer was being operated, a situation that didn’t sit well with some senior executives at the nonbank, including Witherell. Witherell and FirstKey executives Randy Sidhu and David Essex have accepted...


January 23, 2015 - Inside MBS & ABS

S&P Settles Certain MBS Rating Issues, But Regulators Hint More Actions Are Pending

Standard & Poor’s agreed this week to a settlement with the Securities and Exchange Commission and two state attorneys general regarding ratings on commercial MBS and non-agency MBS. Regulators suggest that further actions involving the ratings services are in the works, likely including a much larger settlement with S&P regarding activity before the financial crisis. S&P’s settlement this week involved post-2010 activity. The rating service agreed to pay the SEC and attorneys general for New York and Massachusetts more than $77 million. S&P will also take a one-year “timeout” from rating conduit/fusion commercial MBS. “They lied...


January 23, 2015 - Inside MBS & ABS

2014 Ranked as Strongest Post-Crisis Year in ABS Issuance Despite Fourth-Quarter Slowdown

A total of $185.32 billion of non-mortgage ABS were issued in 2014, the highest annual production level for the market since 2007, according to a new Inside MBS & ABS analysis and ranking. ABS issuance was up 12.0 percent from the prior year, with solid gains in three of the market’s key sectors: auto finance, credit cards and business loans. The weakest link was the student loan ABS market, where annual production fell 25.4 percent from 2013 and slipped to its lowest level since 1999. Vehicle finance deals were...[Includes two data charts]


Poll

With the recent dip in interest rates, how do you feel about loan volumes this year?

We see loan production ending 2015 flat compared to 2014.
We’re optimistic that our originations will rise by 10 to 20 percent year over year.
We’re really optimistic: We expect production to increase by 20 percent or better from last year.
We’re not so bullish. Originations for us may actually fall.

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