An industry advisory group formed to provide input on the development of the common securitization platform and single security for Fannie Mae and Freddie Mac to-be-announced MBS held its second meeting in December and addressed a wide range of industry concerns. A letter sent to the group by the Housing Policy Council raised questions about the timing of issuance of the single security, policy alignment between the two government-sponsored enterprises and the opportunities for public input and participation. The advisory group noted...
Exams by the Securities and Exchange Commission in 2015 uncovered a number of problems at rating services large and small, according to a report released by the SEC at the end of December. However, the firms weren’t identified by name because the exams aren’t public. The report is a laundry list of findings involving the 10 nationally recognized statistical rating organizations, six of which are involved in the MBS and ABS markets. The findings came from exams that focused on activities in 2014. Offending rating services generally were referred to solely based on their size, with Fitch Ratings, Moody’s Investors Service and Standard & Poor’s referred to as “larger” rating services and the other companies referred to as “smaller” rating services. The SEC said...
Four nonprime MBS backed by newly-originated residential loans came to market during the last four months of 2015, but none of deals were rated, a situation that could change in the new year. In a recent interview with Inside MBS & ABS, John Hsu, head of capital markets for Angel Oak Capital, said his company hopes to get a rated deal done in 2016, believing such a milestone would help move the nascent market forward. “We need...
The Department of Justice announced in December that a structured finance supervisor at RBS Securities pleaded guilty to participating in a multi-million dollar securities fraud scheme and is cooperating with the government’s ongoing investigation. Adam Siegel was co-head of U.S. ABS, MBS and commercial MBS trading at RBS between 2008 and 2014. The U.S. Attorney’s Office in the District of Connecticut said Siegel admitted that he and others conspired to increase RBS’s profits on trades of residential MBS and collateralized loan obligations at the expense of customers. “His crime included...
In the end, 2015 produced a solid, if unspectacular, supply of new agency single-family MBS and non-mortgage ABS after peaking in the second quarter of the year. A total of $1.498 trillion of single-family MBS and non-mortgage ABS were issued in 2015, a 28.1 percent increase from the year before, according to a new Inside MBS & ABS analysis. But 2014 ranked as the weakest year since the financial meltdown, and the 2015 output was the fourth lowest in the 21st century during a period of historically low interest rates and steady economic growth. Most components of the market slowed...[Includes three data tables]
Residential lenders issued a record $435.8 billion of Ginnie Mae securities in 2015, according to Inside MBS & ABS, a handsome 47 percent increase from the prior year.
In addition to misrepresenting prices sought by buyers and sellers of MBS, the DOJ said Siegel and co-conspirators misrepresented that bonds held in RBS’s inventory were being offered for sale by a fictitious third-party seller…
Radian Guaranty became the first among seven private mortgage insurers to declare compliance with the regulatory capital standards under the Private Mortgage Insurer Eligibility Requirements (PMIERs), while other MIs expressed confidence they will meet those same requirements. Radian met its PMIERs goals after receiving $325 million in cash and marketable securities from its parent Radian Group in exchange for a surplus note. In addition, the parent firm contributed $50 million to an exclusive affiliated reinsurer of Radian Guaranty. Radian Group expects...
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