With bond prices expected to fall further and interest rates headed north, analysts who cover mortgage-investing real estate investment trusts are sharpening their knives on the sector. The general consensus is that share prices are going nowhere fast and returns are no longer attractive. A new report on mortgage REITs from Keefe, Bruyette & Woods doesn’t mince words: “Sentiment on the mREIT sector remains pretty poor, and we don’t anticipate 2Q15 results to do much to improve that. We’re not expecting a horrible quarter, but we anticipate slight disappointment along more or less all relevant dimensions.” Although many mortgage REITs have yet to report second-quarter earnings, the early expectations are...
Angel Oak Home Loans is still contemplating issuing a security backed by non-agency, non-prime mortgages, but the company’s original self-imposed deadline of July is not going to happen, according to officials familiar with the Atlanta-based originator. As reported by Inside MBS & ABS last month, Angel Oak had been shopping around a roughly $100 million package of nonprime whole loans to several investors. It’s unclear whether any of the portfolio traded. The fact that the lender had been trying...
Market factors are more favorably disposed toward non-agency MBS in the second half of the year than for agency bonds, according to a mid-year review and outlook from Deutsche Bank. “For the second half of 2015, we are cautiously optimistic for the non-agency MBS market, given the favorable fundamentals and technicals,” said Deutsche Bank analysts, who expect home price appreciation and servicer practices to continue to be the two biggest drivers of the MBS credit. On the technical front, the most important factor that affected legacy RMBS is...
JPMorgan Chase last week ended six years of litigation by agreeing to a $388 million settlement to resolve allegations that the bank misled investors about the quality of pre-crisis MBS they had purchased. Still requiring court approval, the settlement would conclude one of the last remaining MBS purchaser class actions arising out of the financial crisis, according to plaintiff attorneys. The suit was filed...
Some industry officials, including Marc Savitt, president of the National Association of Independent Housing Professionals, are worried about the methodology of the project...
Banks with significant portfolio capacity continue to stock up on mortgages because they offer strong returns and can help efforts to cross-sell other products. While most of the mortgages being added to portfolios are jumbos, in some instances banks are retaining conventional mortgages. JPMorgan Chase reported that it added mortgages with a balance of $19.0 billion to its portfolio holdings during the second quarter of 2015. Marianne Lake, chief financial officer at the bank ...
Freddie Mac priced a risk-sharing transaction this week that’s structured much like a non-agency jumbo mortgage-backed security that has the advantage of the government-sponsored enterprise’s guaranty and oversight of servicing practices. Freddie Mac Whole Loan Securities Trust, Series 2015 SC01, will include $278 million in senior certificates guaranteed by Freddie and approximately $23 million in unguaranteed subordinate certificates. The deal is backed by ...
Two nonbanks, led by New Penn Financial, were able to outpace First Republic Bank in contributing to jumbo mortgage-backed securities issued in the second quarter of 2015, according to a ranking and analysis by Inside Nonconforming Markets. New Penn was identified as contributing $145.80 million to the $3.11 billion in jumbo MBS issued during the second quarter. Quicken Loans followed with $139.43 million in contributions. First Republic Bank ... [Includes two data charts]
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