The surging multifamily housing market in the U.S. was a major factor in the huge increase in commercial MBS issuance last year, according to a new Inside MBS & ABS analysis. A total of $206.66 billion of income-property mortgages were securitized during 2015, a 22.6 percent increase from the previous year. It was the strongest annual output of commercial MBS since 2007, the year before the wheels fell off the non-agency CMBS market. New issuance rebounded...[Includes one data table]
Clean-up calls were recently completed on three jumbo MBS issued by Redwood Trust in 2010 and 2011, marking the first such actions on post-crisis jumbo MBS. While MBS investors can take some losses when clean-up calls are completed, analysts suggest that’s not currently much of a concern for post-crisis jumbo MBS. Holders of clean-up call rights, typically servicers, have an option to purchase the remaining loans in an MBS when the outstanding balance of the deal falls below a certain threshold. Redwood completed...
For full-year 2015, the average daily trading volume for agency MBS improved by 9.2 percent from the year prior to $194.4 billion, according to figures compiled by the Securities Industry and Financial Markets Association. Although that might seem like something to crow about, there’s some bad news in the numbers: December marked the worst reading of the year with an average daily trading volume of just $149.2 billion. No other month comes close, not even November at $180.2 billion. Over the past 10 years, 2015 will go down...
Redwood Trust, which pioneered the revival of the jumbo MBS market a few years back, this month officially exited the Fannie Mae/Freddie Mac correspondent-purchase business, dismantling the effort and trimming the size of its Denver office. The real estate investment trust had entered the government-sponsored enterprise market two years ago, after obtaining agency approvals at the end of 2013. It quickly built a network of several dozen lenders that sold whole loans to Redwood, which pooled them in GSE MBS. But sources familiar with the effort told...
Investors in Fannie Mae and Freddie Mac stock haven’t had a lot of success challenging the federal government’s quarterly earnings sweep at the two government-sponsored enterprises, but they’re looking for better results in the two states where the GSEs are chartered. The plaintiffs, David Jacobs and Gary Hindes on behalf of themselves and other shareholders, said state law prohibits the preferred stock of a corporation from getting a cumulative dividend right equal to all the net worth of the corporation. Their lawsuit is pending in the state supreme courts of Delaware, where Fannie is chartered, and Virginia, Freddie’s corporate domicile. The filing pointed...
Fitch Ratings will allow for differences in third-party due diligence practices when rating various types of residential MBS, granting concessions to risk-sharing transactions from the government-sponsored enterprises. The firm released revised master-rating criteria late last week. Among the changes compared with criteria that were released in October was an allowance for differences among non-agency MBS backed by recent originations, transactions related to the GSEs and non-agency MBS backed by seasoned loans. While most jumbo MBS issued in recent years have included third-party due diligence reviews of 100 percent of the loans in a deal, the GSEs’ much larger risk-sharing transactions have been...
Fannie Mae and Freddie Mac plan to ramp up their bulk sales of nonperforming loans in 2016 with the two government-sponsored enterprises ushering in the year by going to market with nearly $3 billion in NPL offerings in January. Freddie’s first NPL auction of the year was its largest so far, totaling $1.6 billion in unpaid principal balance and marketed in seven pools. The NPLs are serviced...
The plaintiffs argue that state law prohibits the preferred stock of a corporation from getting a cumulative dividend right equal to all of a company's net worth...
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