Over the past several weeks, the Treasury Department has been meeting with several industry trade groups about the future of Fannie Mae and Freddie Mac, discussing – among other things – what to do about the impending “zero capital” problem as well as the topic of multiple guarantors. Treasury’s goal, these officials said, is to come up with a workable blueprint on the future of the government-sponsored enterprises and the nation’s housing finance system – changes that might touch Ginnie Mae as well. Late this week there was...
The seasonal surge in primary market mortgage originations stood in stark contrast to a slump in new residential MBS issuance during the second quarter of 2017. Mortgage lenders originated an estimated $455.0 billion of new first-lien loans during the April-June cycle, an 18.2 percent increase from the first three months of the year, according to estimates by Inside Mortgage Finance. But the secondary market generated just $294.7 billion in MBS backed by purchase and refinance loans – a 5.3 percent decline. The result was...[Includes one data table]
An affiliate of Interval Leisure Group priced a timeshare securitization last week as the market for such deals keeps humming along. Timeshare securities are backed by vacation ownership interest loans that tend to perform relatively well and carry attractive yields. Some $2.0 billion of timeshare ABS have priced this year, according to S&P Global Ratings. In all of 2016, $2.6 billion of timeshare ABS was issued, according to the Securities Industry and Financial Markets Association. VSE 2017-A VOI Mortgage from ILG is...
Credit-risk transfers can be used to calculate guarantee fees because they’re indicative of what the private market would charge for the risk taken on by a government-sponsored enterprise, according to Freddie Mac. But the mortgage giant explained that g-fees are likely more stable than a system that relies exclusively on credit-risk transfers. Kevin Palmer, Freddie’s senior vice president of single-family credit risk transfers, said in a white paper the significant amount of credit risk being transferred to the private capital markets provides a way to calculate a market-implied g-fee. Since 2013, the GSE has transferred much of the credit risk on $760 billion of MBS it guarantees. Based on the pricing of Freddie’s Structured Agency Credit Risk transactions over the past year, the market-implied g-fee has been...
A dispute involving the liquidation of a vintage collateralized-debt obligation has the potential to upend standard practices and confidence in the securitization industry, according to the Structured Finance Industry Group. Senior investors in Taberna Preferred Funding IV – a $673.3 million CDO issued in 2005 – are seeking to force a liquidation of the deal via bankruptcy. The bankruptcy is being pursued by a group of investors identified as Opportunities II Ltd., HH HoldCo Co-Investment Fund, L.P., and Real Estate Opps Ltd. The investors appear to have purchased senior tranches of the CDO only in recent years. SFIG filed...
Most rated residential MBS in regions affected by Hurricanes Harvey and Irma have limited exposure that will mitigate the losses resulting from the devastation, according to rating services. Residential MBS rated by Moody’s Investors Service, including securities backed by single-family rental properties, have minimal exposure to the storm-affected counties of Texas and Louisiana thereby easing the losses due to reduced property values, rising delinquencies and longer foreclosure and liquidation timelines, the rating agency said. The analysis is...
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