Issuance of non-mortgage ABS fell 31.7 percent from the second quarter of 2015 to the third quarter, with significant declines in most major sectors, according to a new Inside MBS & ABS ranking and analysis. A total of $37.00 billion of ABS were issued in the third quarter, well off the pace set in the first half of the year. On a year-to-date basis, new ABS production was down 4.5 percent from the first nine months of 2014. That puts in jeopardy the string of four consecutive annual increases in ABS issuance since 2010 as the market enters the final lap of the year. Vehicle finance deals remained...[Includes two data tables]

While federal regulators issued a final rule setting risk-retention requirements for a variety of MBS and ABS in December 2014, uncertainty regarding implementation persists. Industry participants are seeking guidance from regulators on a variety of issues, including the application of risk retention to asset classes that weren’t prevalent when the Dodd-Frank Act was drafted. “It’s absolutely astonishing how much becomes unclear when you actually sit down to build a risk-retention solution,” Rick Jones, chair of finance and real estate groups at the Dechert law firm, said in a recent commentary. He noted...

A number of factors are making new MBS in the to-be-announced market less attractive to investors than MBS issued a few years ago, according to a report from Deutsche Bank Securities. “Aggressive servicers keep picking up market share, credit quality keeps softening and loan balances edge up,” the analysts said. “It adds up to declining quality for TBA MBS.” While those trends certainly aren’t new, Deutsche Bank said...

The Federal Housing Finance Agency is toying with the idea of “grandfathering” the membership of captive insurance affiliates in the Federal Home Loan Bank system, while blocking out others, according to industry observers tracking the matter. Such a final rule would benefit MBS-investing real estate investment trusts that gained entry through a captive. A few years back, several REITs found a loophole in the FHLBank membership rules and exploited it before the FHFA put a moratorium on new captives joining the system. The moratorium expired...

Over the next few weeks, publicly traded real estate investment trusts that specialize in residential mortgages will begin reporting third quarter earnings and the outlook is hardly rosy. “Another difficult quarter for mREITs is behind us,” wrote Keefe, Bruyette & Woods analyst Michael Widner and his team of researchers. “Rate uncertainty has been and remains the sector’s biggest challenge.” In other words, the slow march downward in rates has been...

The trade group for private mortgage insurers this week said Fannie Mae and Freddie Mac programs that would allow sellers to obtain deeper MI coverage, up to 50 percent of the home’s value, could help lower guaranty fees charged by the two government-sponsored enterprises. U.S. Mortgage Insurers said greater front-end risk sharing almost doubles the amount of loss protection to the GSEs and allows them to reduce their committed capital for this risk by about 75 percent. As a result, the group noted...

Government-sponsored enterprises Fannie Mae and Freddie Mac will likely exceed their regulator-mandated cap on multifamily support in the aggregate, with Fannie already topping its cap and Freddie lagging a bit in comparison. Fannie already has exceeded its scorecard cap for 2015, with three months of the year yet to go. For the first three months of 2015, Fannie issued $32.2 billion in multifamily MBS, according to figures compiled by Inside MBS & ABS. In the third quarter, Fannie issued...

Although some lenders love having a desk in a high-volume Realtor’s office, others loathe the practice. “I lost so much business to those places over the years,” he said. “I refused to pay $5,000 for a desk…”

Fannie Mae said that next year lenders would be able to verify a borrower’s income electronically and find ways to lend to customers with nontraditional credit histories. Fannie announced during the Mortgage Bankers Association convention this week changes to extend credit access to potential borrowers who typically have trouble finding a mortgage. Among those changes announced this week and set to take place in 2016, the GSE will require lenders to use trended credit data when underwriting single-family borrowers through its Desktop Underwriter program. The data, provided by Equifax and Transunion, will allow a more detailed analysis of the borrower’s credit history, according to Fannie. Currently, reports only indicate the outstanding balances and if a borrower has been...