The U.S. non-agency MBS space is looking more inviting these days, even though progress is painfully slow and there remains plenty of room for improvement, analysts at Fitch Ratings have concluded in a report out this week. The Fitch analysts said that the underwriting of residential mortgages has improved dramatically since the financial crisis, with recent vintages demonstrating the best performance on record so far. “New legislation has completely eliminated...
New MBS and ABS issuance last year was down 34.4 percent from 2013, largely due to a huge decline in agency single-family MBS production, according to a new Inside MBS & ABS analysis. A total of $1.145 trillion of residential MBS and non-mortgage ABS were issued during 2014, the lowest annual production volume since 2000. Last year got off to a very slow start, with just $517.0 billion in new issuance through the first six months of 2014, before gaining pace during the second half. Total issuance fell 4.8 percent from the third to the fourth quarter. Agency MBS remained...[Includes three data charts]
The Securities and Exchange Commission uncovered a number of compliance issues at the credit rating services in 2013, according to a report released by the federal regulator at the end of December. However, compliance is improving compared with previous exams conducted by the SEC. In exams covering rating activity in 2013, the SEC found issues ranging from conflicts of interest to adherence to policies for reviewing credit ratings to the use of affiliates or third-party contractors. The SEC didn’t single out any of the rating services other than to note whether an issue occurred at one of the big three rating firms or at one of several smaller rating services. For example, the SEC said...
Since early September, at least 14 mortgage company acquisitions have been announced publicly, according to a database of deals compiled by Inside Mortgage Trends.
Mortgage lenders and real estate agents called for further clarifications of an inter-agency proposed regulation that would mandate escrowing of all premiums and fees for flood insurance for most residential mortgages and mobile homes, with some exceptions, after Jan. 1, 2016. While supportive of the regulation, industry groups urged the Office of the Comptroller of the Currency, Federal Deposit Insurance Corp., Federal Reserve Board, National Credit Union Administration and the Farm Credit Administration to proceed cautiously and ensure flood insurance remains affordable and available to consumers. The proposed rule covers...
SunTrust Banks started off the new year reliving the pain of the last six years since the financial crisis by revealing it plans to take yet another financial hit – this time, a $145 million legal expense in its fourth quarter results tied to legacy mortgage issues. In a Form 8-K filing with the Securities and Exchange Commission early this week, David Wisniewski, deputy general counsel, said the bank was taking the charge “to increase legal reserves and complete the final resolution of one matter. Accordingly, based on current information, the company expects its estimate of reasonably possible losses related to legal matters, in excess of reserves, to decrease by approximately this amount.” Wisniewski did not specify...
Mortgage underwriting standards have loosened in recent years, led by the jumbo market and reduced overlays on agency mortgages, according to the Mortgage Bankers Association. However, underwriting standards aren’t nearly as lenient as they were in the early 2000s, prompting some to call for further loosening. The MBA’s Mortgage Credit Availability Index has trended up since the beginning of 2012. “Most of the action in terms of loosening has been on the jumbo side,” said Michael Fratantoni, MBA chief economist, at a talk hosted this week by the Urban Institute’s Housing Finance Policy Center. Separately, he noted...
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