A few months back, Citadel Servicing Corp., Irvine, CA, was eyeing the May/June period as the target date for its first nonprime mortgage-backed security. Now that July is almost over, it’s eyeing the fall – if that. According to company founder and CEO Dan Perl, prices being paid in the whole loan market for its high-yielding loans are just too good to turn down. Perl indicated that for his company, at least, the economics of a whole loan transaction are just too favorable right now. Although he could not be too specific on pricing, the industry veteran indicated...
Issuance of single-family rental securitizations has been lagging this year, but a new offering from Progress Residential suggests that demand for deals could be headed northward. In a somewhat uncommon move last week, Progress increased a planned issuance after presale reports on the deal were already published. “The transaction sponsor elected...
Last week, the Consumer Financial Protection Bureau issued its long-awaited rule banning mandatory arbitration in consumer financial contracts. The industry concern is that, if left intact, the rule could lead to a rash of litigation impairing liquidity in the secondary markets and limiting consumer access to credit as companies seek to pull back on their risk exposure. The final rule prohibits “covered providers of certain consumer financial products and services from using an agreement with a consumer that provides for arbitration of any future dispute between the parties to bar the consumer from filing or participating in a class action concerning the covered consumer financial product or service.” It further requires...
Although reform of the government-sponsored enterprises is highly unlikely this year, community lenders went to Capitol Hill this week, testifying that equal opportunity in the secondary market and preserving the cash window are sacred tenets that cannot be compromised. At a GSE reform hearing late this week, Sen. Mike Crapo, R-ID, chairman of the Senate Banking Committee, called small lenders “fixtures in their communities” with local knowledge and expertise. “As we prepare to reform the system we must understand how small lenders access the market,” he said. Many community lenders access...
Since the introduction of the single-security effort, pricing differences between Fannie Mae and Freddie Mac MBS have just about been eliminated, thanks in part to prepayment speeds converging. A paper recently published by the Urban Institute found that back in 2012 and 2013, Freddie’s 3.0, 3.5, and 4.0 percent coupons traded at more than a $0.30 discount to Fannie Mae’s. But, by 2014 and 2015 that number narrowed to about $0.15, and by early 2017 the pricing differences had largely come together. The authors called...
The jumbo mortgage-backed security market is set for a significant boost as Flagstar Bank will issue MBS. Since 2015, only one bank has issued jumbo MBS: JPMorgan Chase. Other issuers have all been nonbanks as banks have largely opted to retain jumbos in portfolio instead of issue non-agency MBS.Some details about the planned Flagstar Mortgage Trust 2017-1 were revealed this week in documents filed with the Securities and Exchange Commission ...
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