The Federal Reserve’s Open Market Committee, as expected, held the line on interest rates this week at its first meeting of 2017, but still presumably stayed on track for multiple increases later in the year. What’s new is a recent resurgence of talk about how the central bank will shrink its massive balance sheet and its huge portfolio of agency MBS and debt, perhaps as early as next year. “In view of realized and expected labor market conditions and inflation, the committee decided to maintain the target range for the federal funds rate at 1/2 to 3/4 percent,” the FOMC said. It added that committee members expect that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate. The Fed will...
Societe Generale has agreed to pay $50 million to the Department of Justice to settle civil charges alleging it misled investors by promoting and selling securities backed by badly underwritten mortgage loans. According to the DOJ, the French bank made false representations regarding SG Mortgage Securities Trust 2006-OPT2, a $780 million debt issue it organized more than 10 years ago. As part of the settlement, SocGen admitted that many of the loans in the deal were improperly underwritten and should not have been securitized. For example, the bank admitted...
An affiliate of New Residential Investment is preparing to issue a $400.0 million ABS backed by servicer-advance receivables, according to S&P Global Ratings. The ABS relates to mortgages serviced by Ocwen Financial. NRZ Advance Receivables Trust 2015-ON1 Series 2017-T1 received preliminary AAA ratings from S&P. In addition to citing strengths in the structure of the ABS to support a AAA rating, S&P noted that it upgraded its servicer ratings for Ocwen from “below average” to “average” in September. Series 2017-T1 is...
Tom Hutchens of nonprime originator Angel Oak Mortgage Solutions said his shop presently employs 44 wholesale account executives and plans to hire 60 more over the next 18 months.
In 2016, retail sales conducted over the Internet boomed while traffic at America’s shopping malls remained tepid, raising new concerns about CMBS deals where the collateral includes a troubled “anchor” tenant. According to figures compiled by Morningstar, roughly $49 billion of CMBS transactions are backed by regional malls. When the anchor closes, it raises all sorts of concerns about whether the entire mall will be able to survive. (Earlier this year, Sears and Macy’s separately announced they will close a total of 218 stores.) “As online shopping, the diminishing importance of department stores, and store closures all contribute...
Jumbo production increased significantly for some lenders during the fourth quarter and declined for others, according to a preliminary analysis of jumbo originations. Among four banks that publicly disclose their jumbo volume, First Republic Bank and Flagstar Bancorp posted increases compared with both the third quarter of 2016 and the fourth quarter of 2015. BofI Holding and EverBank Financial reported declines in jumbo production. First Republic originated $3.06 billion of single-family ...
Invictus Capital Partners, an investment management firm, is preparing to issue a nonprime mortgage-backed security backed by newly-originated home loans from four different lenders, according to documents filed with the Securities and Exchange Commission this week. Covius, a due diligence provider, said it reviewed mortgages with an unpaid principal balance of $118.96 million for the planned Verus Securitization Trust 2017-1. The bulk of the contributions for the MBS were ...
There will likely be a notable increase in the issuance of mortgage-backed securities backed by newly originated nonprime mortgages, according to Fitch Ratings. As many as eight firms are looking to join Lone Star Funds in issuing rated deals, though issuance isn’t expected to get anywhere near the levels seen in the run up to the financial crisis. Some $999.5 million in nonprime MBS was issued in 2016, according to the rating service. “Fitch estimates those figures could double in 2017, and ...
Redwood Trust is moving relatively quickly to issue its second jumbo mortgage-backed security of 2017. The firm is planning a $347.85 million transaction, according to a presale report from Kroll Bond Rating Agency. Sequoia Mortgage Trust 2017-2 is scheduled to close Feb. 17, about a month after Redwood closed a $342.93 million issuance. The burst of activity suggests that Redwood is seeing relatively strong pricing for jumbo MBS. Officials at Redwood couldn’t comment on ...
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