The Federal Home Loan Bank of Seattle lost another round recently when the U.S. Court of Appeals in Washington ruled to dismiss its mortgage-backed securities claim against RBS Securities, even in light of newly discovered information in the case. In the suit, the FHLBank of Seattle alleged that it relied on RBS’ prospectus supplement to purchase $200 million in MBS back in 2006. The plaintiff said that the information provided about the MBS was not sufficient, and in fact, it included “untrue or misleading” statements. This was in relation to the loan-to-value ratio of the loans as well as the origination and underwriting...
The Federal Housing Finance Agency plans to propose a new risk-based capital rule for the GSEs based on current operations to replace the old Office of Federal Housing Enterprise Oversight capital regulation.But just like the OFHEO rules, the proposed ones will be suspended as long as Fannie Mae and Freddie Mac are in conservatorship. Having a capital framework is useful when it comes to evaluating business decisions, according to FHFA Director Mel Watt. But he was quick to emphasize that the proposal is not based on some grand scheme to promote recapitalizing the GSEs. In fact, it’s largely an exercise that Watt said is...
Brookings Encourages Fannie to Expand CRT Market. The Brookings Institute applauds Fannie Mae’s credit-risk transfer program in a paper published this week, but said the GSE should increase the amount of credit it transfers to investors. The think tank also noted that guaranty fees that Fannie mortgage originators chose should be based on the implied g-fee paid to investors. Moreover, Brookings said that Fannie should continue to examine how much risk they should transfer using the Connecticut Avenue Structure program and look at past losses during times of stress. Freddie Prices Largest STACR SPI Deal to Date. Freddie Mac had its second Structured Agency Credit Risk - Securitized Participation Interests (STACR SPI) deal of the year. The $263.5 million STACR 2018 and SPI2 securities are backed by participation...
The agency single-family MBS market did what it was expected to do in May, generating a modest gain in production spurred on by vigor in the purchase-mortgage sector. [Includes two data charts.]
A key Treasury Department official last month said the Federal Housing Finance Agency will remain committed to the single-security initiative no matter who the Trump administration names to take over the regulator of the two government-sponsored enterprises.
Ginnie Mae has restricted three issuers from putting VA mortgages in standard multi-issuer MBS pools as it continues to police the ranks for alleged churning activities.
Industry participants are preparing for a transition away from the London Inter-bank Offered Rate in MBS and ABS but more needs to be done, according to an analysis by Fitch Ratings.
Some of the nation’s largest MBS-investing real estate investment trusts are seeing their share values wither a bit as the summer approaches, but for the most part their fortunes look fairly intact.
Kroll Bond Rating Agency and Morningstar Credit Ratings recently expanded the types of products they will assess with new criteria for Property Assessed Clean Energy ABS and single-asset/single-borrower commercial MBS, respectively.
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