In a report released last week, the Financial Stability Oversight Council recommended that its members, federal regulators, should finish risk-retention requirements as part of an effort to facilitate “increased private mortgage market activity.” The rulemaking was mandated by the Dodd-Frank Act, which set an April 2011 deadline for issuance of a final risk-retention rule that would cover non-agency MBS, commercial MBS and non-mortgage ABS. The rule will require securitizers to retain a 5 percent interest, although this would be waived for transactions backed by “qualified” assets, including qualified residential mortgages. The Department of Housing and Urban Development, Federal Deposit Insurance Corp., Federal Housing Finance Agency, Federal Reserve, Office of the Comptroller of the Currency and Securities and Exchange Commission issued...
In a few months, mortgage insurance giant Radian Group will close on its $305 million cash purchase of Clayton Holdings, ending the “independent” status of one of the nation’s largest MBS due-diligence firms. Almost all the larger due-diligence companies have been gobbled up by larger players over the past 18 months. Most of the acquirers have other interests in the residential finance industry and are betting on the eventual return of the non-agency MBS market. That could be...
“FHFA hasn’t dropped the ball on the issue,” said one MI consultant who has met with the agency over the topic. “They now know that the [GSE reform bill] is dead and they want to make sure they get it right.”
Blackstone Group, the largest owner of single-family rental properties, is reportedly planning to bring $1 billion of securities backed by rental cash flows to market – the latest in a string of large rental securitization transactions seen in the last couple of months. There are few details about the deal because the transaction is said to be private, Bloomberg reported. Blackstone, however, is said to be working with Deutsche Bank to market the home-rental bonds, which may be offered to investors next month. Blackstone’s latest securitization follows...
Standard & Poor’s ranked as the top rating service in the non-mortgage ABS market and also claimed the top spot in the sputtering non-agency MBS sphere, according to a new Inside MBS & ABS ranking of first-quarter activity. S&P rated seven of the 11 non-agency MBS issued in the first three months of 2014, or 78.0 percent based on dollar volume. Once the perennial leader in non-agency MBS ratings, S&P’s market share has been around 40.0 percent in recent years. DBRS ranked...[Includes two data charts]
Standard & Poor’s is seeking comments on a proposal for assessing operational risk posed by key transaction parties such as servicers in structured finance transactions. The request for comments follows a similar request from S&P in 2011. “We made a number of changes to the previous request for comment in view of the responses we received and our desire to enhance the risk considerations under the proposed operational risk framework,” said Joseph Sheridan, S&P’s criteria officer. “We also expanded the proposal’s scope. Where we believe operational risk could lead to credit instability and a ratings impact, the proposal would call for rating caps that limit the securitization’s maximum potential rating.” The rating service is proposing...
Legislation introduced earlier this month by Sen. Elizabeth Warren, D-MA, to facilitate refinance options for struggling student loan borrowers could negatively affect existing student loan ABS trusts while benefitting certain kinds of bonds at the expense of others, according to Wall Street analysts that closely follow the space. Overall, it’s considered a negative. The good news is, the legislation isn’t expected to be enacted this year. The bad news is, other similar measures are expected to emerge after the November elections. Introduced May 6, 2014, S. 2292, the “Bank on Students Emergency Loan Refinancing Act,” would permit...
Sources contend that three other top executives also have left Nationstar Mortgage. At press time, Nationstar’s media department had not returned telephone calls and emails on the matter.
An ambitious, bipartisan mortgage reform bill that would wind down Fannie Mae and Freddie Mac while repurposing the Federal Housing Finance Agency limped out of the Senate Banking, Housing and Urban Affairs Committee. The measure is expected to die waiting for a floor vote that will never occur. The committee voted 13 to 9 to report out a revised version of S. 1217, the Housing Finance Reform and Taxpayer Protection Act.
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