Over the past two weeks, MBS prices have been on a downward trajectory, leading some market watchers to ponder whether the long-awaited correction in values is finally upon the industry. But no one is quite ready to wave the white flag. Moreover, there’s a school of thought that says any rise in the yield on the 10-year Treasury bond could be short lived and, at some time over the next six to 12 months, rates might head south again, igniting yet another small refi rally. Some also believe the chance of a recession is in the cards. Barry Habib, who runs MBS Highway, a rate-locking advisory service, thinks...
Activity in the Home Affordable Refinance Program continued to dwindle in the first quarter of 2016 as the post-housing crisis initiative winds down before expiring at the end of the year. HARP refinances fell to just 19,989 in the first quarter, down 5.2 percent from the previous period and off 36.8 percent from a year ago, according to a new Federal Housing Finance Agency report. While both government-sponsored enterprises saw a decline in volume, Freddie Mac volume was...[Includes one data table]
Portfolio lending remains a more viable option than securitization for lenders in the non-agency mortgage market in part because of the depth and variety of funding sources that allow them to offer a wide range of products. Depository institutions rely heavily on low-cost retail deposits to fund their retained mortgage portfolios, according to panelists speaking at the Mortgage Bankers Association secondary market conference in New York this week. A typical customer of ...
One of the biggest factors limiting the issuance of jumbo mortgage-backed securities is the strong appetite banks have to hold jumbos in portfolio. Redwood Trust, which aims to issue jumbo MBS, had adapted by competing with banks and working with them. Redwood had a gross margin of 140 basis points on its jumbo business in the first quarter of 2016, much higher than the 59 basis points in gross margins on jumbos Redwood had in the full year of 2015 ...
The proposed standards drafted by the Structured Finance Industry Group regarding mortgage disclosure rules will help address issues in the non-agency market, according to investors and rating services. Moody’s Investors Service hosted a meeting last week with a group of investors, issuers and others involved in non-agency MBS. Among other issues, the group discussed the Consumer Financial Protection Bureau’s combined Truth in Lending Act and the ...
Clayton Holdings was rated as a deal agent for non-agency mortgage-backed securities last week. The rating by Morningstar Credit Ratings was the first formal assessment of a deal agent, a role aimed at improving protections for investors in new non-agency MBS. Morningstar also assessed Clayton as a representation-and-warranty reviewer, assigning ratings of MOR RV2 for both functions. The firm’s rating scale ranges from RV1 to RV4 and Morningstar said it is the only ...
For the issuance of mortgage-backed securities with non-qualified mortgages to take off, industry analysts suggest that banks need to play a larger role. To this point, nonbanks have been the only issuers of non-QM MBS. Ron D’Vari and Timothy Bernstein, analysts at New Oak, authored an overview of non-QM MBS issued in the latest issue of The Journal of Structured Finance, which was published this month. The analysts said real estate investment trusts and hedge funds ...
A group of investors pushed back against suggestions that so-called private capital won’t return to the market for new non-agency mortgage-backed securities. The Association of Mortgage Investors took exception to recent comments by Timothy Mayopoulos, president and CEO of Fannie Mae. He predicted that the non-agency MBS market won’t come back due to significant losses suffered during the financial crisis. However, the AMI said the government-sponsored enterprises are ...
After declining for 10 consecutive quarters, the serious delinquency rate on subprime mortgages increased in the first quarter of 2016, according to the Mortgage Bankers Association. The non-seasonally-adjusted serious delinquency rate on subprime mortgages was 12.41 percent at the end of the first quarter of 2016, up from 12.39 percent the previous quarter and down from 15.17 percent in the first quarter of 2015. The serious delinquency rate ... [Includes six briefs]
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