MBS, ABS Issuance

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

May 22, 2015 - Inside The GSEs

FHFA Wins Lawsuite on Non-Agency MBS, Appeal is PLanned

Although the trial between the Federal Housing Finance Agency and Nomura Holdings is over, Nomura said that it is planning an appeal. The Japanese-based investment bank was found financially liable last week when Federal Judge Denise Cote ruled the bank knowingly sold bad mortgage-backed securities to the GSEs ahead of the 2008 financial crisis. The FHFA is working to put a dollar amount on the damages that Nomura and RBS Securities, the underwriter of four of the seven securitizations at issue, should pay. Nomura spokesman Jonathan Hodgkinson, said in a statement that losses by Fannie Mae and Freddie Mac resulted from an unprecedented decline in home prices. However, that defense approach failed. According to Cote “given the magnitude of falsity, it’s not surprising that the defendant...


May 22, 2015 - Inside MBS & ABS

MBS & ABS Issuance at a Glance

One page of issuance data.


May 22, 2015 - Inside MBS & ABS

Conduit Commercial MBS Issuance Lower than Expected Thus Far This Year, Investor Concerns Among Deterrents

Issuance of conduit commercial MBS has been significantly lower than expected this year, according to Bank of America Merrill Lynch. Some of the expected volume appears to have shifted to single-asset deals, while a number of investor-related factors have also likely limited issuance. BAML expected $85.0 billion in conduit commercial MBS to be issued this year, a nearly 50 percent increase compared with 2014. However, just $23.0 billion in conduit commercial MBS had been issued this year through mid-May, suggesting that volume might stay level compared with 2014. A number of factors have shifted...


May 22, 2015 - Inside MBS & ABS

MBS Trading Volume Hit a Yearly Low in April Despite Strong Issuance. Should the Market Worry?

In April, the average daily trading volume in agency MBS fell to $187.8 billion, the worst reading of the year and a possible harbinger of problems to come. One market participant, speaking under the condition his name not be used, likened it to MBS buyers “going on strike.” He added: “Right now, you have an illiquid market, and that’s not a good thing.” In December of last year, the MBS trading volume was...


May 21, 2015 - Inside Mortgage Finance

Class Certification Denied in Bank’s Fair-Lending Suit; Groups Sue Fannie for Bad REO Practices

In a ruling that may impact future fair-lending class actions, a federal district court judge in Manhattan has denied class certification in a lawsuit brought by the American Civil Liberties Union and National Consumer Law Center against global investment bank Morgan Stanley. Filed in October 2012, the suit was brought on behalf of African American borrowers in Detroit who obtained subprime loans from New Century Mortgage, a now-defunct originator that sold the loans to secondary-market purchasers, including Morgan Stanley, which then securitized them. New Century originated...


May 15, 2015 - Inside MBS & ABS

MBS & ABS Issuance at a Glance

One page of issuance data.


May 15, 2015 - Inside MBS & ABS

Mortgage Firms Turn to Debt Securities as IPO Market Stays (Mostly) Closed for Now

Privately held nonbank mortgage firms – and even some public ones – increasingly are contemplating issuing more debt securities as a way to fund growth. The reliance on debt is seen as a more attractive alternative than going public, which can leave too much of a young company in the hands of outside parties that are merely looking for a quick profit after a lender lists its stock. Then again, not too many mortgage companies are contemplating...


May 15, 2015 - Inside MBS & ABS

Electronic Contracts for Loans Increasingly Common In ABS Market, Presenting Efficiencies and Some Risks

ABS issued in recent years have included a marked increase in the use of electronic contracts, particularly for prime auto deals. Industry analysts note that e-contracts can be treated similarly to physical contracts, though issuers must address concerns from investors, lenders and rating services. “The pace of e-contract adoption has increased, and some prime auto captives are believed by industry participants to be moving to 100 percent e-contract origination by the end of 2015,” DBRS said this week. “The adoption of e-contracts has also occurred across the ABS industry, with subprime auto and timeshare lenders beginning to use them for loan originations.” Use of e-contracts in the auto space has been boosted...


May 8, 2015 - Inside MBS & ABS

MBS & ABS Issuance at a Glance

One page of issuance data.


May 8, 2015 - Inside MBS & ABS

Despite Regulatory Concerns, PACE Programs Continue to be Regarded as Viable Funding Choice

Despite the Federal Housing Finance Agency’s misgivings about Property Assessed Clean Energy programs, ABS issuers are finding investors for deals backed by these loans. Since March 2014, three rated residential ABS transactions and one private unrated commercial deal backed by PACE assessments have been issued for a combined total of $503.65 million. All three residential ABS deals were rated “AA,” with average assessments totaling $59,628. The PACE program was launched in 2008 by the city of Berkeley, CA, as a pilot to promote energy efficiency in residential, commercial, agricultural and industrial properties...


May 7, 2015 - Inside Mortgage Finance

Freddie Pays the Government a Lot More Than Its Quarterly Profit Sweep, G-Fees Steady in 1Q15

Freddie Mac will send $746 million to the U.S. Treasury under the conservatorship plan that siphons off nearly all the government-sponsored enterprise’s net profit every quarter, but that’s not all the cash being milked from the GSE. During the first quarter of 2015, Freddie sent $219 million to Treasury under the 2011 law that squeezed the GSEs to pay for a continuation of a payroll tax cut for U.S. workers. The levy is 10 basis points of guaranty fee charged by Freddie and Fannie Mae, and it’s a steadily rising amount as a greater share of GSE business is subject to the charge. In the first quarter of last year, Freddie paid...


May 1, 2015 - Inside FHA/VA Lending

Refis Help Boost Volume of Ginnie MBS Backed by VA Loans in 1Q15

VA home loan guaranty originations nearly caught up with FHA single-family volume in the first quarter of 2015, thanks to a strong pickup in veteran loan refinancings, an Inside FHA/VA Lending analysis of Ginnie Mae issuance data indicated. Refi loans accounted for 58.5 percent of VA loans securitized in the first quarter compared to just 34.4 percent of FHA loans in Ginnie mortgage-backed securities. Approximately $35.0 billion in VA loans were securitized in Ginnie Mae MBS in the first quarter, up 5.5 percent from the fourth quarter of 2014. On the other hand, $35.6 billion of FHA loans were securitized during the same period, down 1.8 percent from the prior quarter. Of the VA loans in Ginnie MBS, $14.5 billion were purchase mortgages, mostly delivered through retail and loan correspondents. Brokers accounted for only 8.5 percent of the purchase loans. Securitized VA purchase volume, however, was ... [2 charts]


May 1, 2015 - Inside MBS & ABS

MBS & ABS Issuance at a Glance

One page of issuance data.


May 1, 2015 - Inside MBS & ABS

Structure of Some AAA-Rated Jumbo MBS Seen as Exposing Investors to Outsized Risk

While jumbo MBS issued in recent years have performed exceptionally well, some senior-support bonds on new jumbo MBS have credit risks similar to what was experienced during the financial crisis, according to analysts at Andrew Davidson & Co. In a recent analysis, Richard Ellson and Allison Ying raised concerns about the super-senior structures that have become common on jumbo MBS in recent years. They noted that when Redwood Trust started working to revive jumbo MBS issuance in 2010, the issuer used a much simpler structure. However, in the past few years, Redwood and many other issuers have increasingly used...


April 30, 2015 - Inside Mortgage Finance

GSE Low-Downpayment Programs Off To Slow Start; Lenders Have Mixed Views

The new government-sponsored enterprise low-downpayment programs have met a mixed reaction among lenders. While some said they expect to see an uptick in mortgage activity, others noted the product accounts for just a small percentage of their firms’ business and won’t have much of an impact on origination volume. Fannie Mae’s low-downpayment program kicked off in December 2014, and Freddie Mac implemented its program in March 2015. So far, the volume of low-downpayment purchase loans in GSE business is relatively small. Fannie securitized...


April 24, 2015 - Inside MBS & ABS

MBS & ABS Issuance at a Glance

One page of issuance data.


April 24, 2015 - Inside MBS & ABS

Multi-Borrower Single-Family Rental Securitization Poised for Growth, Blackstone First to Market

Funds managed by Blackstone Tactical Opportunities issued the first multi-borrower single family rental security this week and the market appears to be set to grow throughout the year, according to industry analysts. The $229.53 million B2R Mortgage Trust 2015-1 was issued this week with AAA ratings from Fitch Ratings. “We think...


April 24, 2015 - Inside MBS & ABS

Prime Auto ABS Collateral Weakening Continues, But Tax Refunds Appear to Provide Brief Respite

Two new reports from Fitch Ratings, taken together, indicate a modest weakening in the collateral backing U.S. auto ABS deals is continuing, with perhaps a temporary reprieve thanks to short-term cash flow positives for consumers, mostly tax refunds and lower gasoline prices. Still, the overall outlook is positive. U.S. prime auto ABS collateral has been marginally weakening in the last few years, most recently because of amped-up competition among auto finance companies, Fitch said in a report out this week, based on transactions issued between 2007 and fourth-quarter 2014. “The quality of prime auto loan securitized pools was...


April 24, 2015 - Inside MBS & ABS

GE Capital’s Wind Down Could Hurt ABS Market; It’s Not Clear How Existing Deals Will Be Serviced

General Electric’s announcement that it will exit most of its financial services businesses is just over two weeks old, but already there are signs that one casualty could be the ABS market. According to reports from Barclays and others, GE’s decision to unload its commercial lending and leasing operation could result in lower issuance volume because GE Capital traditionally has funded these portfolios – estimated to be $74 billion in size – through ABS shelves. “As such, GE’s decision to sell the portfolio is...


April 24, 2015 - Inside MBS & ABS

Credit Enhancement Levels on New Jumbo MBS Vary Based on Factors Beyond Loan Quality

Issuers continue to include super prime mortgages in jumbo MBS but credit enhancement levels on the latest batch of deals vary widely, with rating services raising concerns about participants with limited track records, among other issues. Presale reports have been issued for four jumbo MBS in April thus far: a $241.06 million deal from Two Harbors Investment, a $267.19 million MBS from Five Oaks Investment, a $356.45 million deal from Redwood Trust and a $273.62 million Credit Suisse securitization. The underwriting for mortgages backing these deals is...


April 24, 2015 - Inside MBS & ABS

BofA’s $8.5 Billion Non-Agency MBS Settlement Moves Closer to Payout; Morgan Stanley Under Scrutiny

The judicial process for Bank of America’s long-pending $8.5 billion settlement involving non-agency MBS issued by Countrywide Financial is near its conclusion and investors could see payouts as soon as August, according to analysts at Barclays Capital. The settlement was announced in 2011, and after years of legal maneuvering, approved by the Appellate Division of the New York Supreme Court in March. Bank of New York Mellon is the trustee on the 530 non-agency MBS covered by the settlement. “The trustee’s approval application to the New York Supreme Court suggests...


April 24, 2015 - Inside MBS & ABS

Non-Mortgage ABS Issuance Up Sharply in Early 2015 Thanks to Big Gains in Business, Vehicle Transactions

Non-mortgage ABS production jumped sharply higher in the first quarter of 2015, with $50.08 billion of new issuance, according to a new Inside MBS & ABS analysis and ranking. First-quarter issuance was up 38.1 percent from the previous three-month period, although early 2015 was down 6.3 percent from a year ago. The two strongest segments of the market were vehicle finance ABS, which accounted for 46.7 percent of issuance during the first quarter, and business loan ABS, which chipped in another 30.9 percent of new production. Ford Motor Credit had...[Includes three data charts]


April 23, 2015 - Inside Mortgage Finance

Nonbanks Continue Building Stake in Agency MBS Servicing Market, Top Banks Don’t Fight Erosion

The agency mortgage servicing market grew modestly during the first quarter of 2015, thanks to Ginnie Mae and Freddie Mac, according to a new Inside Mortgage Finance analysis of agency mortgage-backed securities disclosures. Lenders serviced a total of $5.287 trillion of single-family mortgages pooled in outstanding agency MBS as of the end of March, up 0.1 percent from the fourth quarter of 2014. The figures do not include unsecuritized loans guaranteed by the two government-sponsored enterprises or, in the case of Ginnie, FHA-insured reverse mortgages. And the numbers don’t perfectly synch up with aggregated reports by the agencies of their guaranteed mortgage debt outstanding. All three of the top agency MBS servicers had...[Includes two data charts]


April 17, 2015 - Inside Nonconforming Markets

Low Credit Enhancement on Pending Jumbo MBS

The latest jumbo mortgage-backed security from Two Harbors Investment is set to have the lowest credit enhancement levels of any deal issued this year, according to an analysis by Inside Nonconforming Markets. Strong performance and underwriting characteristics along with repeat issuance appears to have helped decrease credit enhancement requirements for the transaction. The $241.06 million Agate Bay Mortgage Trust 2015-3 received a preliminary AAA rating ... [Includes one data chart]


April 17, 2015 - Inside MBS & ABS

MBS & ABS Issuance at a Glance

One page of issuance data.


April 17, 2015 - Inside MBS & ABS

Prime ARMs Went Delinquent 30 Percent More Often When Privately Securitized, Fed Economist Finds

Vintage prime adjustable-rate mortgages went delinquent at a rate 30 percent higher when they were securitized privately, according to an economist with the Federal Reserve System. The study was based on mortgages originated in 2005 and 2006, at the height of the aggressive underwriting in the non-agency mortgage market. “We find that private-securitized loans perform worse than observably similar, non-securitized loans, which provides evidence for adverse selection ...


April 17, 2015 - Inside MBS & ABS

CHLA Recommends Part of GSE Profits Be Diverted From Treasury Into a Reserve for Smaller Lenders

The Community Home Lenders Association wants a portion of the quarterly profits that Fannie Mae and Freddie Mac give to the Treasury Department put in a reserve account to help smaller mortgage lenders, according to a recent letter the trade group wrote to Treasury Secretary Jack Lew. The group contends that the Preferred Stock Purchase Agreement funds should be set aside in a reserve account to capitalize a cash window for smaller mortgage lenders that would ...


April 17, 2015 - Inside MBS & ABS

High G-Fees and LLPAs, Ability-to-Repay Rule Are Hindering Access to Credit, Market Recovery

High guarantee fees and loan-level pricing adjustments charged by Fannie Mae and Freddie Mac are not enough to counteract lingering MBS investor mistrust and draw private players back into the housing finance market, according to a top industry official. “The Federal Housing Finance Agency seems to believe that by raising costs for loans purchased or guaranteed by the government-sponsored enterprises, they can lure private sector capital back to the mortgage market ...


April 17, 2015 - Inside MBS & ABS

The Blackstone Group Buys a Mortgage Lender and Eyes Another as It Ponders Move Into Residential MBS

The Blackstone Group, an investment banking powerhouse, has purchased Gateway Funding Services, Horsham, PA, and plans to use the nonbank as its platform to ramp up originations, servicing investments and MBS issuance, according to industry officials familiar with the situation. As Inside MBS & ABS went to press this week, the Blackstone Group had not responded to a media inquiry on the matter. Gateway also could not be reached, but according to ...


April 17, 2015 - Inside MBS & ABS

Jumbo MBS Issuance Reached Post-Crisis High In Early 2015, Overall Non-Agency Market Firm

Overall non-agency MBS issuance dipped slightly in the first quarter of 2015, but the jumbo mortgage sector hit its biggest production volume since the financial crisis in late 2008, according to a new Inside MBS & ABS analysis and ranking. A total of $21.94 billion of non-agency MBS were issued during the first three months of this year, down 0.2 percent from the fourth quarter. The lion’s share of these deals were backed by seasoned loans, either ... [Includes two data charts]


April 10, 2015 - Inside Mortgage Trends

Mortgage Brokers, Refinance Lending Spur Surge in 1Q15 GSE Production

Mortgage brokers played an increasingly important role in the conventional conforming market during the first quarter of 2015, according to a new Inside Mortgage Trends analysis of mortgage-backed securities issued by Fannie Mae and Freddie Mac. Mortgage brokers were responsible for $23.8 billion of single-family mortgages securitized by the two government-sponsored enterprises during the first three months of this year. That was up 16.0 percent ... [Includes two data charts]


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