Shellpoint Partners filed a shelf registration statement with the Securities and Exchange Commission last week with plans to issue new non-agency mortgage-backed securities. Officials at the company have stressed that the MBS will be even more investor-friendly than the high-quality jumbo MBS issued by Redwood Trust. “Investors should know that what they are buying is a clean loan,” Eric Kaplan, a managing director at Shellpoint, said this week at the ABS East conference sponsored by Information Management ...

Participants in the non-agency mortgage-backed security market expect the amount of MBS backed by newly originated non-agency mortgages to increase significantly in 2013 and beyond – even without reform of the government-sponsored enterprises. A number of factors have combined to make the market ripe for new non-agency MBS, according to attendees at the ABS East conference sponsored by Information Management Network this week in Miami. “Borrowers want loans, lenders want to lend and investors want yield,” ... [Includes one data chart]

The continued use of certain features of shifting-interest structures in MBS will keep risk of loss high for senior bond holders and even erode senior credit enhancement, although senior bonds in relatively new shifting-interest deals appear better protected from late-stage defaults, according to an analysis by Moody’s Investors Service. Moody’s said senior bonds in shifting-interest transactions it rated since 2010 have better armor against defaults in the late stages of the loan because they all have a hard credit enhancement floor. In a shifting-interest structure, the securitization sponsor may cover...

Supporters of a controversial plan to use eminent domain to seize underwater mortgages from non-agency MBS pools, write down their balances, refinance them into the FHA program and repackage them for sale to other investors are facing fresh challenges. In California, where the eminent domain plan was first introduced, the Joint Powers Authority formed by the County of San Bernardino and two of its cities, Ontario and Fontana, announced that its next meeting, which was scheduled for Thursday, Oct. 25, 2012, had been cancelled. The only business before the JPA is...

Springleaf Financial Services is ramping up to issue its third non-agency MBS this year, a nearly $900 million transaction backed primarily by vintage performing subprime loans. Springleaf Mortgage Loan Trust 2012-3 features a hefty 47.75 percent credit enhancement supporting its one AAA-rated tranche, according to a presale report from Standard & Poor’s. “Total credit enhancement comprises subordination, an interest shortfall reserve fund, excess interest, and overcollateralization,” noted the report. S&P said...

New issuance of non-agency MBS fell to an all-time low of $1.77 billion in the third quarter of 2012 as re-securitization activity nearly fell off the cliff, a new Inside MBS & ABS analysis reveals. The previous record low for non-agency MBS was $1.79 billion, set in the fourth quarter of last year. Issuance dropped 49.0 percent from the second to the third quarter, bringing year-to-date production to just $10.28 billion – off 60.1 percent from the first nine months of 2011. When it’s over, 2012 will likely represent...[Incluldes three data charts]

Rep. David Schweikert, R-AZ, said this week that in the coming months he will introduce bipartisan legislation to establish a regulatory framework for prime non-agency MBS. “I’ve spent the last two years trying to figure out what the box will look like,” he said. Non-agency MBS participants continue to debate whether reform of the government-sponsored enterprises is necessary before the non-agency MBS market can return in a meaningful manner. At the ABS East conference sponsored by Information Management Network this week in Miami, Schweikert said a functioning non-agency MBS market is necessary before members of Congress can be convinced to move forward with GSE reform. “I need to have...

Investors are still a major hurdle for industry efforts to put Fannie Mae and Freddie Mac MBS on a more level playing field, while Ginnie Mae is beginning to weigh its options to address a major shift in the profile of its MBS business. Freddie’s share of new MBS production by the two government-sponsored enterprises has dropped significantly over the past few years. The company typically accounted for 42 percent to 45 percent of GSE issuance up until 2008, when it fell to 39.8 percent. Last year, Freddie captured just 35.4 percent of the GSE market, and in the first nine months of 2012 it’s down to 34.2 percent. Steven Abrahams, a managing director at Deutsche Bank, said...

Attendees at the ABS East conference sponsored by Information Management Network this week in Miami were more optimistic about the MBS and ABS markets than they have been in some time. So optimistic, in fact, that some industry participants are already concerned about bubbles forming in the still recovering securities markets. “If this conference is any indicator, it looks like everybody feels there’s real vitality,” said Lewis Ranieri, chairman and founding partner of Ranieri Partners. “I haven’t seen a conference like this in quite a while.” Close to 3,000 people attended the event. Jay Steiner, a managing director at Deutsche Bank, noted...

Recent efforts by the government-sponsored enterprises and the Federal Housing Finance Agency to offer clarity and consistency about repurchase demands may or may not bear fruit as neither agency officials nor industry observers can speak confidently as to its ultimate effectiveness. According to participants at an Inside Mortgage Finance webinar this week, the GSE representation and warranty framework unveiled by the FHFA last month and the GSEs’ new quality control guidelines announced last week are steps in the right direction but there are a lot of moving parts to take into account. “We tried the best we could to address...