Citigroup will not provide representations and warranties for fraud on the MBS and half of the mortgages were originated with stated- or no-documentation.
With the Federal Reserve acquiring a significant portion of new agency MBS issuance, the aggregate MBS holdings of banks and thrifts continued to decline in late 2013, according to a new ranking and analysis by Inside MBS & ABS. Commercial banks and savings institutions held a total of $1.507 trillion of residential MBS in portfolio as of the end of last year, newly-released call-report data reveal. That was down 0.4 percent from the end of the third quarter and marked the industry’s fifth consecutive quarterly decline. Bank and thrift MBS holdings fell...[Includes two data charts]
Banks and thrifts earned a hefty $5.292 billion on their mortgage-banking activities during the fourth quarter of 2013, boosting the year to one of the industry’s best in recent memory. Mortgage banking income reported by banks and thrifts rose 12.7 percent from the third to the fourth quarter of last year, according to a new analysis of call-report data by Inside Mortgage Trends. The fourth-quarter surge brought annual earnings from mortgage banking to $25.857 billion in 2013 ... [Includes one data chart]
Researchers at the Federal Reserve determined that, contrary to the prevailing view in economics literature, quantitative easing initiatives by the Fed over the past few years had an impact on the pricing and yields for agency MBS. In a new study, Fed analysts Diana Hancock and Wayne Passmore found that the central banks purchases of Treasury securities and agency MBS since 2008 lowered MBS yields and mortgage interest rates by more than what would have been suggested by changes in market expectations alone. Hancock and Passmore said...
Bank and thrift MBS holdings fell by 4.6 percent during 2013, and by the end of the year, they were down 7.8 percent from the all-time high of $1.634 trillion reached at the end of March 2012.
The capital markets risk-sharing transactions completed by Fannie Mae and Freddie Mac in the past year are seen by some as a model for reform of the government-sponsored enterprises. However, the GSEs are taking on significantly more risk in the transactions than the non-agency first-loss requirements contemplated in legislation pending in Congress. Analysts at Barclays Capital project that after Congress approves mortgage-finance reform legislation, it would take at least 10 years to transition smoothly to a new system. Bills in Congress contemplate a five-year transition timeline, but raising enough private capital to fund the new system in that timeframe could be difficult. Industry analysts predict...
Mortgage-industry veteran John Robbins has launched a new mortgage cooperative that plans to bundle mortgages for sale into the secondary market and eventually form a conduit through which it hopes to securitize non-QM loans. Were going after best execution, Robbins told Inside MBS & ABS. Of course, the venture aptly titled The Mortgage Collaborative is...
The private student-loan sector continues to slowly improve, but defaults and delinquencies are still at elevated levels compared to the period before the financial crisis, according to a new report by analysts at DBRS, based on data from deals that closed between 2002 and 2007. Quarterly gross defaults, as measured as a percentage of loans in repayment, slipped from 1.07 percent in the third quarter of 2013 to 1.00 percent in the fourth quarter. Similarly, the percentage of gross defaults as a percentage of the original pool balance declined from 0.55 percent to 0.50 percent. Defaults have remained...
The GSE chief credited Fannies strong performance to a wide array of factors, including improving home prices and lower delinquencies, but also tighter underwriting standards which have created a pristine book of business for the company.