Ford Credit priced a $1.08 billion deal earlier this month backed by prime auto-loan receivables that included a noteworthy twist, according to John McElravey, director of consumer ABS research at Wells Fargo Securities. The deal will revolve for five years before paying principal with a soft-bullet maturity. “In our opinion, this deal adds an interesting new dimension to prime auto-loan ABS,” McElravey said in a recent report. “We would not be surprised if other prime lenders eventually adopted similar structures based on market pricing and the pace of investor acceptance. Upon reflection, it is somewhat surprising that more prime auto-loan ABS have not been structured in this way.” Moody’s Investors Service explained...
Even though the jumbo securitization market continues to struggle, there are signs of life in other non-agency niches, including non-owner-occupied mortgages and non-prime home loans. Five Oaks Investment Corp. recently launched a new product menu, saying it will purchase on a correspondent basis non-owner-occupied mortgages with loan amounts of up to $1.5 million. Company managing director Dave Akre told Inside MBS & ABS that the goal is to securitize. “We are...
The advance policies of nonbank servicers have led to disruptions in payments to investors in non-agency MBS following servicing transfers from banks, according to Fitch Ratings. The differences are particularly pronounced on jumbo and Alt A deals, with advance disruptions recently concentrated on MBS previously serviced by Bank of America. “Bank and nonbank servicers for residential MBS transactions typically follow the same general advancing guidelines,” Fitch noted. “However, nonbank servicers generally make the determination to stop advancing earlier than bank servicers.” On average, for jumbo MBS and Alt A MBS, nonbanks advance missed...
The Federal Housing Finance Agency is soon expected to launch an intense debate on the pricing of Fannie Mae and Freddie Mac MBS guaranties that could broaden the credit box and shape how much business the government-sponsored enterprises do. Bob Ryan, a special advisor to the FHFA, said that the agency hopes to come out with its “request for information” on guaranty fees in the near future. During a panel session at the Mortgage Bankers Association Secondary Market Conference in New York City, he said the FHFA has been working closely with the two GSEs on the factors that go into their g-fee calculations. “Folks need...
“Due to the new Dodd-Frank guidelines, fewer buyers will be qualified to purchase homes, which will ultimately affect my livelihood as well,” one Realtor said.
Although the long-term prospects for the agency MBS market are highly uncertain, the near-term future is wherever Fannie Mae, Freddie Mac and Ginnie Mae take it – and the highly anticipated shift in investor demand as the Federal Reserve eases out of the market. The development of a common securitization platform for Fannie and Freddie will take several years, even after the Federal Housing Finance Agency narrowed the project, said Bob Ryan, a special advisor to the FHFA, during a panel session at this week’s Secondary Market Conference sponsored by the Mortgage Bankers Association. The 2014 plan for the government-sponsored enterprises includes clarifying the scope of the CSP project, which has been in the works for over a year. “We’re not talking...
Although the Federal Housing Finance Agency has backed away from radically reducing the government sponsored enterprises’ role in the mortgage market, some non-agency lenders believe more of the conventional market might be up for grabs if the FHFA overhauls GSE guaranty fees and loan-level pricing adjustments. There isn’t likely to be much market opened up based on loan amount; FHFA Director Mel Watt has ruled out any change in Fannie Mae and Freddie Mac loan limits. But the FHFA is actively engaging the industry and will be seeking formal comment on guaranty fees and LLPAs. Under current LLPAs, if a borrower has a low FICO score, low downpayment or other “risk factors,” they pay...
The 3 percent points-and-fees cap for qualified mortgages will likely accelerate an emerging practice of lenders rolling a variety of fees into the rate sheet price as the market continues to evolve toward a no-points mortgage, according to a leading industry consultant. “There has been a shift in the market over the last five years toward zero point loans as lenders build the traditional one percent origination fee into the rate-sheet price,” said Nicole Yung, a managing director with the Stratmor Group, a mortgage banking consulting firm. “This change has been driven by a consumer preference for low up-front costs and the historically low interest rates.” However, there seems...
Mortgage delinquency rates on most single-family residential properties dropped in the first quarter of 2014 indicating better loan quality and improved market conditions. According to the latest Inside Mortgage Finance Large Servicer Delinquency Index, the overall delinquency rate was 6.60 percent as of the end of March, the lowest it has been since the readings started trending generally downward in the fourth quarter of 2012. The improvement in the first quarter was due...[Includes one data chart]
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