Credit quality for the loans backing unique warehouse-funding securitizations from Jefferies Funding remains strong, according to Moody’s Investors Service. One of the risks was that weaker collateral could be included in the transactions as time passed. The $225.0 million Station Place Securitization Trust 2016-1 received Aaa ratings from Moody’s last February and a $210.0 million 2016-3 transaction issued in May garnered an with Aaa rating. The rating service evaluated the deals recently as the 2016-1 securitization is set to pay down next month. “To date, there has been...
After a two-year rollercoaster ride through the court system that ended in 2015, a former Wall Street trader finds himself facing another trial in an MBS fraud case. Jess Litvak, a former bond trader with the Jeffries Group, will go on trial again after a jury found him guilty in 2014 of violating securities laws. He was accused of fraud and misleading investors about the price he had paid for residential MBS. According to attorneys with the law firm of Shepherd Smith Edwards & Kantas in Houston, the U.S. Attorney’s Office in Connecticut originally brought...
As one former GSE stock analyst told us: “There’s no way they can be privatized. To maintain an AAA rating they would need 25 percent (I’m guessing) capital to assets. Even at 5 percent there is not enough spread to earn a market return on capital.”
The jumbo mortgage-backed security Redwood Trust is set to issue on Jan. 20 received improved pricing compared with the company’s previous deal issued in October. The new MBS is fairly similar to the prior bond, indicating stronger demand from investors. The $343.28 million Sequoia Mortgage Trust 2017-1 priced last week. The super-senior tranche priced 1-20 back of Fannie 3.5s, which was four ticks tighter than Redwood’s previous offering, according to an analysis by Wells Fargo Securities ...
Large swaths of investors will continue to avoid buying non-agency mortgage-backed securities unless Congress passes investor-friendly reforms, according to Chris Katopis, executive director of the Association of Mortgage Investors. “Private capital has virtually left the U.S. mortgage market,” he said. “The future is likely to reflect a similar situation unless Congress helps establish the necessary systems, structures and standards for private capital to return.” In a recent study published by ...
The types of home loans included in prime non-agency mortgage-backed securities issued during the fourth quarter of 2016 varied somewhat compared with issuance from recent quarters, according to an analysis by Inside Nonconforming Markets. Some $907.8 million in prime non-agency MBS was issued during the fourth quarter. Collateral in the deals shifted more toward adjustable-rate mortgages, interest-only mortgages and refinances. ARMs ... [Includes one data chart]
A significant number of borrowers with subprime mortgages originated in 2002 and beyond are prime targets for refinances, according to analysts at Black Knight Financial Services. More than 600,000 subprime mortgages are currently performing, according to Wesley Winter, a senior modeler at Black Knight. He said that while all of the borrowers aren’t necessarily attractive targets for refinances, there’s $10.0 billion to $25.0 billion in potential refi opportunities involving ...
NewLeaf Wholesale recently added four products to its “specialty” mortgage offerings with relatively lenient underwriting standards. The loans are aimed at borrowers who don’t qualify for conforming mortgages. The lender is now offering a jumbo mortgage that allows loan-to-value ratios up to 90.0 percent without private mortgage insurance, a residual-income product, an asset-depletion product and a product for foreign investors. The loans join NewLeaf’s other specialty products ...
With President-elect Donald Trump set to take office and Republicans in control of Congress, trade groups representing banks reiterated calls for revisions to standards for qualified mortgages. Banks are pushing for QM status to be applied to any mortgage held in portfolio, even if the loans have characteristics that would otherwise make them non-QMs subject to greater liability. In a letter this month to leaders of Congress, Rob Nichols, president and CEO of the American Bankers Association ...
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