Despite strong earnings from the MI sector the past year, regulatory scrutiny remains, particularly in efforts by an NAIC working group to develop risk-based capital standards...
David Applegate, CEO of Common Securitization Solutions, revealed this week that the joint venture owned by Fannie Mae and Freddie Mac has finished much of the work for a major milestone in the common securitization platform. Although officials promised more information about the timeline next year, the government-sponsored enterprises’ use of the CSP – let alone the GSE single security – looks to be a ways off. At the ABS East conference produced by Information Management Network this week in Miami, Applegate said CSS has completed about 90 percent of the work required for single-class security issuance by Freddie on the CSP. Officials at CSS, the GSEs and the Federal Housing Finance Agency revealed this week that Freddie would be the first to test the system, and that Fannie would go on board at a later date, when issuance of the interchangeable single security will begin. The officials also noted...
Mortgage securitization rates in 2015 are still low compared to last year, but some of the decline is likely due to the lag between primary market origination and MBS issuance. For the first six months of the year, new MBS issuance represented 73.8 percent of total originations, according to a new Inside MBS & ABS analysis. That’s down from a 75.4 percent securitization rate for all of 2014. Securitization rates are...[Includes one data table]
Documents pertaining to the conservatorship of Fannie Mae and Freddie Mac, and the controversial change that strips the government-sponsored enterprises of net worth, will remain sealed, under a September court order in a lawsuit filed by private GSE shareholders. Judge Margaret Sweeney’s ruling in Fairholme Funds v. The United States went in favor of the Federal Housing Finance Agency to keep the documents under “protected information,” denying a motion by Fairholme to release the documents. Charles Cooper, attorney with Cooper & Kirk, the law firm representing the investors, told...
The Federal Reserve’s Open Market Committee this week fulfilled the expectations of roughly half the Wall Street participants and economists surveyed by financial news organizations and opted to hold the line on interest rates, and to maintain the status quo when it comes to the Fed’s massive balance sheet holdings of agency residential MBS and debt. “We recognize that there has been a great deal of focus on today’s policy decision,” Fed Chair Janet Yellen said in her press conference after the FOMC’s two-day meeting concluded Thursday afternoon. “The recovery from the Great Recession has advanced sufficiently far, and domestic spending appears sufficiently robust, that an argument can be made for a rise in interest rates at this time. We discussed this possibility at our meeting. “However, in light of the heightened uncertainties abroad, and a slightly softer expected path for inflation, the committee judged...
PHH Mortgage – which handles originations for a number of financial firms on a private-label basis – was the largest IO lender in the nation with $7.19 billion funded during the first half.
In an analysis of Fannie Mae and Freddie Mac loan-level loss data, Fitch Ratings concluded that while similar, there are differences between loss severities among loans with similar profiles. Fannie disclosed its loan-level loss data in late July to increase transparency to the market as it plans for an actual-loss credit offering in the fourth quarter. Fannie’s loan-level loss data was comparable to historical loss severities for its liquidated mortgages and the fixed loss-severity schedules used in its Connecticut Avenue Securities risk-transfer deals, said the Fitch report this week. All CAS risk-sharing transactions have passed...
Meanwhile, there’s a school of thought that believes if and when the Fed hikes, mortgage rates will fall because it will show investors that the central bank is acting to curb inflation.
Nearly a year has passed since the Structured Finance Industry Group released documents relating to the RMBS 3.0 project and the leader of the Treasury Department’s non-agency reform efforts left the Treasury in May. However, at the ABS East conference sponsored by Information Management Network this week in Miami, industry participants noted that progress is being made on both initiatives. Panel sessions on reforming the non-agency mortgage-backed securities markets have been a staple at industry conferences since 2008, and some observers question whether much progress has been made. “I think...
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