Federal regulators late last month rejected industry requests that swap agreements entered into by securitization vehicles be exempt from new capital and margin requirements. The three federal banking regulators, along with the Federal Housing Finance Agency, finalized a rule that requires covered swap entities to collect and post initial margin to counterparties that are swap entities or financial end users with material swaps exposure of $8 billion or more. The Structured Finance Industry Group had argued...
The interim guidelines modify three key areas where lender-complaints have been common, including a revision to the calculation of the owner-occupancy ratio.
The Structured Finance Industry Group released its latest “RMBS 3.0 Green Paper” this week as part of an effort to revive the non-agency mortgage-backed security market. The nearly 300-page paper focuses on model representations and warranties for non-agency MBS backed by new originations. SFIG detailed 39 model reps and warrants, adding to eight other model reps and warrants that were previously released by the trade group. About half of the latest model reps and warrants ...
It would take a significant increase in interest rates to diminish bank demand for holding originations of jumbo mortgages in portfolio, according to industry analysts. Analysts at Bank of America Merrill Lynch said higher interest rates could eventually shift the economics in favor of banks securitizing their jumbo production and buying back the AAA tranches of the mortgage-backed securities rather than owning the whole loans on their balance sheet. “While it is tough to ...
The third quarter of 2015 marked one of the few periods in recent years when Redwood Trust didn’t sell a jumbo mortgage-backed security. Instead, the real estate investment trust focused its jumbo sales efforts on the whole-loan channel, a trend expected to continue into 2016, according to officials at Redwood. “A strong portfolio bid for home loans from banks currently results in a more favorable loan-sale execution for us versus securitization,” Brett Nicholas, Redwood’s president ...
Issuance of jumbo mortgage-backed securities started to pick up speed in November after a slow start to the fourth quarter of 2015. Redwood Trust plans to issue a $337.08 million jumbo MBS with a number of unique characteristics, according to presale reports. Sequoia Mortgage Trust 2015-4 will be backed by 15-year fixed-rate mortgages, 75.5 percent of which were originated by UBS Bank. Kroll Bond Rating Agency noted that this will be the first post-crisis deal to include ...
The Federal Housing Finance Agency probably won’t increase the baseline conforming loan limit in 2016, according to industry analysts. The baseline conforming loan limit of $417,000 hasn’t increased since 2006 as home prices declined significantly shortly thereafter. The FHFA will use its seasonally-adjusted “expanded data” house-price index to set loan limits for the government-sponsored enterprises in 2016. The loan limits are expected to be published ...
Originations of nonprime loans that don’t meet standards for qualified mortgages are beginning to ramp up while still accounting for a small share of total origination volume. Impac Mortgage Holdings, one of the most prominent originators of non-QMs, has posted sharp growth since starting to offer the loans in the third quarter of 2014. Impac originated $48.0 million in non-QMs in the third quarter of 2015, more than double the $22.3 million in non-QM originations the lender had ...
Ocwen Financial continues to work toward satisfying regulatory requirements that would allow the nonbank to resume acquisitions of mortgage servicing rights. However, officials stress that MSR acquisitions aren’t the main focus for the company. “Right now, I don’t see in the marketplace a lot of opportunities for the kind of servicing transfers that would interest Ocwen and that’s why we’re focusing more of our efforts on generating new assets ... [Includes one data chart]
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