A new statutory exemption for private resales of ABS and MBS imposes certain requirements that issuers may find difficult to meet, according to securities compliance experts. The provision is part of the “Fixing America’s Surface Transportation Act” (FAST Act), which President Obama signed on Dec. 4, 2015. Although aimed primarily at authorizing spending on highway and transit projects, the new law includes several provisions intended, among other things, to facilitate ...

Angela Klein, an attorney with the law firm Morrison & Foerster, said her firm has been talking to mortgage lenders that use big data about the risk and how little guidance there is about it.

Legacy non-agency MBS issued before the financial market collapse in 2008 continue to spawn millions in lawsuits. In the Southern District of New York, Commerzbank AG, as an RMBS investor, recently sued Deutsche Bank, HSBC, Wells Fargo and the Bank of New York Mellon in their capacities as MBS trustees on deals that inflicted approximately $1.88 billion in losses on the German bank. Commerzbank claimed it suffered $750 million in losses related to BNYM’s alleged failures ...

When’s the last time a regional or megabank bought a nonbank mortgage company? Wells Fargo? JPMorgan? BofA? Citigroup? Nope, none of them, that we can recall...

Compliance violations with a disclosure rule that the Consumer Financial Protection Bureau implemented in October continue to cause problems for non-agency mortgages in the secondary market. The CFPB and Fitch Ratings separately provided guidance recently regarding the so-called TRID integrated disclosure rule that could help industry participants get more comfortable with TRID. There have been reports that some buyers of non-agency mortgages have balked at ...

The non-agency mortgage-backed security market could be revived this year by economic factors rather than efforts by Congress or industry participants, according to analysts. The non-agency share of mortgage originations has been relatively strong in recent years, but the loans were largely held in bank portfolios instead of included in non-agency MBS. Legislative reform of the government-sponsored enterprises and potential incentives for non-agency MBS issuance look ...

The Federal Housing Finance Agency published a final rule this week that will prevent real estate investment trusts from gaining access to financing from the Federal Home Loan Bank system via captive insurance companies. REITs are not allowed direct membership in an FHLBank. However, in recent years a number of REITs have formed captive insurance companies that were granted FHLBank membership because insurance companies were allowed to ...

Officials at the Federal Housing Finance Agency provided some advice to real estate investment trusts along with the announcement this week that REITs will lose their access to funding from Federal Home Loan Banks: ask Congress to make some changes. “Congress has amended the Federal Home Loan Bank Act in the past to allow additional entities to become members of a Federal Home Loan Bank and it can certainly do so again if it wants some of these entities to ...

Issuers of jumbo mortgage-backed securities stuck with plain vanilla mortgages in 2015, according to a new analysis by Inside Nonconforming Markets. Meanwhile, a wide variety of lenders contributed to jumbo MBS last year, with only one bank accounting for an outsized share of contributions. First Republic Bank was the top originator of jumbo mortgages that were securitized in 2015, accounting for nearly 20 percent of all jumbo MBS issuance ... [Includes two data charts]

The performance risks posed by a new breed of alternative-documentation mortgages are likely much lower than the mayhem caused by reduced-documentation mortgages originated before the financial crisis, according to Moody’s Investors Service. While most lenders verify the borrower’s income and assets used to qualify for mortgages, some non-agency lenders are willing to originate loans with less than full documentation. Lenders allowing for alt-doc underwriting typically ...