Competition between Fannie Mae and Freddie Mac on MBS guarantee fees appeared to play a role in Freddie’s surge in market share during the fourth quarter, but the price war seemed to ease up in 2018.
It appears the mortgage real estate investment trust sector – a somewhat stable universe the past few years – might be ready for a major rollup, courtesy of margin compression and tighter margins.
Fitch Ratings last week upgraded 18 non-agency MBS backed by seasoned loans. The deals had been issued in recent years and performed better than the rating service expected.
The Angel Oak Companies has officially entered the small-balance commercial loan market, focusing on credits of $5 million or less for a host of properties, including multifamily, industrial, mixed-use, retail and medical.
A number of issuers are exploring bringing ABS backed by life-contingent structured settlements, according to DBRS. Interest in the sector increased following a $59.9 million deal DRB Capital issued near the end of 2017 backed by annuities and life-contingent structured settlement receivables.
Collateral backing prime non-agency MBS issued after the financial crisis has performed well in part because of limited risk layering, though an increase in cash-out refinance loans is a possible source of risk, said Moody’s Investors Service.
Ginnie Mae has reinstated one of two VA lenders it suspended last month for alleged loan churning practices that triggered rapid prepayments in the agency’s MBS.
Freddie Mac plans to issue its first credit-risk transfer deal as a trust execution this month in preparation for the new Real Estate Mortgage Investment Conduit structure, according to Michael Reynolds, vice president of credit- risk transfers.
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