Legislation introduced earlier this month by Sen. Elizabeth Warren, D-MA, to facilitate refinance options for struggling student loan borrowers could negatively affect existing student loan ABS trusts while benefitting certain kinds of bonds at the expense of others, according to Wall Street analysts that closely follow the space. Overall, it’s considered a negative. The good news is, the legislation isn’t expected to be enacted this year. The bad news is, other similar measures are expected to emerge after the November elections. Introduced May 6, 2014, S. 2292, the “Bank on Students Emergency Loan Refinancing Act,” would permit...
Standard & Poor’s is seeking comments on a proposal for assessing operational risk posed by key transaction parties such as servicers in structured finance transactions. The request for comments follows a similar request from S&P in 2011. “We made a number of changes to the previous request for comment in view of the responses we received and our desire to enhance the risk considerations under the proposed operational risk framework,” said Joseph Sheridan, S&P’s criteria officer. “We also expanded the proposal’s scope. Where we believe operational risk could lead to credit instability and a ratings impact, the proposal would call for rating caps that limit the securitization’s maximum potential rating.” The rating service is proposing...
“FHFA hasn’t dropped the ball on the issue,” said one MI consultant who has met with the agency over the topic. “They now know that the [GSE reform bill] is dead and they want to make sure they get it right.”
In a few months, mortgage insurance giant Radian Group will close on its $305 million cash purchase of Clayton Holdings, ending the “independent” status of one of the nation’s largest MBS due-diligence firms. Almost all the larger due-diligence companies have been gobbled up by larger players over the past 18 months. Most of the acquirers have other interests in the residential finance industry and are betting on the eventual return of the non-agency MBS market. That could be...
The Senate Banking, Housing and Urban Affairs Committee voted 13-to-9 to report out a revised version of the controversial housing-finance reform legislation, but the bill’s tweaks weren’t enough to win the support of the panel’s liberal Democrat members. Committee Chairman Tim Johnson, D-SD, and Ranking Member Mike Crapo, R-ID, released their initial draft in March, which built upon the bill submitted last year by Sens. Bob Corker, R-TN, and Mark Warner, D-VA. Though the Housing Finance Reform and Taxpayer Protection Act of 2013, S. 1217, cleared committee with one more than the minimum 12 votes required, an affirmative vote of at least 16 of the 22 members of the panel had been seen...
The new survey of more than 2,000 real estate agents found that respondents recommend specific mortgage providers for 59 percent of their homebuyer transactions.
S&P rated seven of the 11 non-agency MBS issued in the first three months of 2014, or 78 percent based on dollar volume, according to Inside MBS & ABS.
Fannie Mae and Freddie Mac will ramp up their risk-sharing transactions significantly in 2014, and may see a somewhat expanded share of MBS issuance, under a new conservatorship plan announced this week by the Federal Housing Finance Agency. The revised “scorecard” also tweaks the project to develop a common securitization platform. The FHFA said it wants each of the two government-sponsored enterprises to structure transactions that transfer some portion of the credit risk on $90 billion of residential MBS this year, three times the level they were directed to reach last year. Both companies appear to be well on the way to meeting this requirement. Freddie late last month announced...
Consumer Financial Protection Bureau Director Richard Cordray has repeatedly told mortgage lenders that there are plenty of good loans to be made outside the confines of the qualified mortgage. Increasingly, it looks like market dynamics are backing him up. During a webinar last week hosted by Inside Mortgage Finance, Larry Platt, a partner with the K&L Gates law firm, noted that some lenders are looking outside the QM box to bolster loan origination volume that has plummeted. “The volume is down, and we’ve moved into a purchase-money market,” he observed. Also, there’s...
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