Due-diligence and document-file reviews will key Fitch’s rating of residential MBS backed by re-performing loans and seasoned mortgage loan collateral, based on revised criteria, according to a recent report from Fitch Ratings. Fitch recently finalized its criteria for analyzing re-performing and seasoned loan RMBS to include closer attention to risk factors. Fitch uses its mortgage loan-loss model as well as representation-and-warranty and due-diligence reviews in analyzing the key risk drivers for RPLs. However, since the methodologies currently used by the rating agency were developed with an eye towards newly originated and seasoned performing collateral, RPL pools and some seasoned performing pools purchased in the secondary market are likely to be influenced...
Mortgage insurers are interested in moving forward with a year-old MBA proposal for a risk-sharing program that would allow deeper MI coverage on loans with high loan-to-value ratios.
Originations of jumbo mortgages increased in the third quarter of 2014 compared with the previous quarter, according to a new ranking and analysis by Inside Mortgage Finance, an affiliated publication. Big banks continue to have a strong appetite for jumbos, prompting some smaller banks to sell jumbos to them and keeping some nonbanks out of the jumbo mortgage-backed security market altogether. An estimated $65.0 billion in jumbos were originated in the third quarter of 2014 ... [Includes one data chart]
Goldman Sachs teamed with EverBank Financial to issue a unique jumbo mortgage-backed security last week, its first jumbo MBS since the financial crisis. The $282.80 million GS Mortgage-Backed Securities Trust 2014-EB1 received AAA ratings with credit enhancement of 8.35 percent on the senior tranche. All of the loans in the deal are hybrid adjustable-rate mortgages originated by EverBank. Some 7.9 percent of the ARMs have a 10-year interest-only period. The deal marked a shift ...
One of the chief concerns among some top institutional investors in the non-agency residential mortgage-backed securities market is coming up with a way to price the risks of poorly underwritten or serviced mortgages more effectively. The objective is to price deals so the costs associated with an origination or servicing failure will be more appropriately assigned to those responsible for the defect. During a recent industry conference, a managing director at ...
Chimera Investment emerged from years of accounting issues with an ability to return to the new-issue jumbo mortgage-backed security market. However, the real estate investment trust has focused its new investment strategy on agency MBS as well as multifamily activity and a unique restructuring of vintage non-agency MBS. Matthew Lambiase, president and CEO of the real estate investment trust, said the returns offered by new jumbo MBS aren’t currently attractive. “The economics are ...
Proponents of the non-agency market are concerned that the final rule recently issued by federal regulators setting risk-retention requirements for certain securitized mortgages includes an exemption for Fannie Mae and Freddie Mac. Beginning in late 2015, risk-retention requirements for residential mortgages will apply to newly issued non-agency mortgage-backed securities collateralized by loans that don’t meet standards for qualified mortgages. Issuers or lenders contributing to ...
Jumbo mortgage-backed securities issued in recent years continue to perform exceptionally well, according to Moody’s Investors Service. The rating service pointed to 10 jumbo MBS issued in 2012 and 2013 by Redwood Trust as having built up credit enhancement on the senior bonds due to a low level of delinquencies. “An analysis of 10 transactions suggests that the low delinquency rate will continue as a result of the improving housing market, even as prepayment rates have remained low ...
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