Ginnie Mae this week revised its requirements for participating MBS issuers seeking approval of changes in their business status as a result of mergers, change of ownership or control, transfer of assets or a negative turn in their dealings with regulatory agencies. The agency decided to update the guidance because of the increasing number of requests from issuers, according to Ginnie Mae President Ted Tozer. The requests are getting more complex as well, he said. The agency’s Mortgage-Backed Securities Guide has been updated...
The heavyweight Wall Street group that sets the to-be-announced MBS standard is pushing federal regulators to take aggressive steps to keep Fannie Mae and Freddie Mac programs aligned as much as possible as the government-sponsored enterprises develop a new single security. In a sternly written letter to the GSE regulator, the Securities Industry and Financial Markets Association warned that the TBA market could be disrupted if Fannie and Freddie policies diverge too much under the new system in which the GSEs would issue fully-fungible securities. “If performance and credit risk are not aligned, then the securities will not be fungible and the market will not trade them as if they are,” the group said. SIFMA argues...
With MBS issuance volume falling sharply in August, the mortgage industry may have another profit-related concern on its hands: gain-on-sale margins are coming under pressure. For now, no one is panicking, but until the recent rate drop – courtesy of China devaluing its currency – loan volumes were beginning to slow, especially for refinancings, although there’s plenty of hope that the purchase business will stay robust through the remainder of the fall. As one jumbo securitization official told Inside MBS & ABS: “Gain-on-sale margins have been...
The Securities and Exchange Commission has charged three MBS traders with fraud for inflating the prices of MBS they bought from and sold to investors. Former traders Ross Shapiro, Michael Gramins and Tyler Peters allegedly defrauded customers to illegally generate millions of dollars in revenue for their ex-employer, Nomura Holdings International. As senior traders with Nomura’s residential MBS desk since 2009, the brokers arranged trades between customers, meaning that each would buy MBS from one customer and resell them for profit to another customer. As head trader, Shapiro arranged MBS and manufactured housing ABS trades. According to the SEC, the traders’ illicit pricing took place...
Servicing federal student loans would likely become more costly and cumbersome under a set of best practices recently issued by a White House-sponsored interagency panel. Back in March, the Obama administration assembled a group of officials from the Treasury Department, the Department of Education, the Office of Management and Budget, and the Domestic Policy Council to monitor trends in the government’s student loan portfolio, budget costs and borrower assistance efforts. As part of that effort, the task force was directed...
Freddie Mac’s Structured Agency Credit Risk deals and Fannie Mae’s Connecticut Avenue Security transactions have accounted for about 90 percent of risk transfers by the two government-sponsored enterprises. But the Federal Housing Finance Agency is pushing the GSEs to test new structures. FHFA said in a recent report that its longer term goal for the STACR and CAS products is for the GSEs to transition from debt issuance to credit-linked notes. That structure would be similar to enterprise debt issuances, but a trust would issue the note instead of the GSE. Principal and interest payments on the STACR and CAS debt issuances are...
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