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...
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...
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...
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]
All three agencies posted big increases in multifamily MBS issuance last year, with Freddie (up 65.4 percent) and Fannie (up 36.4 percent) leading the way…
The turmoil in financial markets around the world is fueling a flight to safety on the part of investors into U.S. dollar-denominated assets, helping to keep mortgage rates in the U.S. housing market lower than they otherwise would be. But how long that will continue is anyone’s guess. “The recent volatility in worldwide financial markets caused Treasury rates to decline, so we’ve seen that being picked up in mortgage rates,” Danielle Hale, managing director of housing statistics for the National Association of Realtors, told Inside Mortgage Finance. Mike Fratantoni, chief economist at the Mortgage Bankers Association, said...
A battle on the legislative or even legal front may be brewing that challenges the Federal Housing Finance Agency’s recent decision to exclude certain types of insurance companies from membership in the Federal Home Loan Bank system. The biggest impact of the final rule would be to force a number of real estate investment trusts that have formed captives to gain access to the FHLBanks to give up low-cost FHLBank advances. “The impact on mortgage liquidity and credit access should be...
The mortgage industry’s continued use of marketing services agreements and other affiliated business arrangements hangs in the balance in a long-running dispute between PHH Corp. and the Consumer Financial Protection Bureau, which will be the subject of oral arguments April 12, 2016, before the U.S. Court of Appeals for the District of Columbia. “The PHH appeal is one of the most important Real Estate Settlement Procedures Act opinions to be decided by the courts in decades,” legal expert Phillip Schulman told Inside Mortgage Finance this week. “It will determine whether Section 8(c)(2) of the act merely clarifies the Section 8(a) anti-kickback provisions of the statute, as CFPB Director Richard Cordray claims, or whether it creates a safe harbor that exempts payments from a RESPA violation if those payments are for goods provided or services rendered, as the plain language of the act and several previous circuit courts have held.” Further, “This appeal will have...
Bowing to pressure from investors – in particular, Carl Icahn – American International Group this week rolled out a blueprint to increase shareholder value, including a partial spin-off of its top-ranked mortgage insurance division, United Guaranty Corp. Although both AIG and UGC were not entertaining questions on the details, a spinoff of the MI business could come by mid-year with up to 19.9 percent of the unit being sold to the public. Eventually, AIG said...
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