The securitization of income-property mortgages nosedived in the first quarter of 2017, with most of the downturn in the volatile non-agency sector, according to an Inside MBS & ABS analysis. A total of $48.29 billion of MBS backed by commercial properties was issued in the first quarter, down 27.7 percent from the previous period. Although production was down 6.1 percent from the same period in 2016, it was close to the average quarterly volume of $49.35 billion that the market has produced since the beginning of 2014. The average for the 2011-2013 period was just $32.00 billion. Average volume is...[Includes one data table]

The Securities and Exchange Commission has opened an investigation into certain single-family rental securitizations and is requesting information from market participants, including Green River Capital, a subsidiary of a private mortgage insurance company. The investigation first came to light when Radian Group disclosed in a recent 10-Q filing that Green River received a letter from the SEC requesting information regarding broker price opinions that GRC provided on properties included in SFR transactions. Green River, which falls under Radian’s Clayton Holdings affiliate, is...

Fannie Mae and Freddie Mac are soliciting industry feedback on a proposal designed to make their mainstay credit-risk transfer deals more accessible for real estate investment trusts and, to a lesser extent, overseas investors. REITs have nibbled at the CRT debt notes issued by the two government-sponsored enterprises over the past few years, but restrictions on their holdings of so-called non-REIT assets have limited their involvement. The GSEs, with the backing of the Federal Housing Finance Agency, have come up...

Federal Housing Finance Agency Director Mel Watt is prepared to allow Fannie Mae and Freddie Mac to build some type of capital buffer to avoid a Treasury draw that could weaken investor confidence. But some lawmakers vehemently disagreed with his views during a hearing in the Senate Banking, Housing and Urban Affairs Committee this week. Watt reiterated his concern about the declining capital buffer, which is scheduled to reach zero by 2018 under the preferred stock purchase agreements that set the terms of the conservatorships of the two government-sponsored enterprises. With no capital buffer, Fannie and Freddie would be forced...

Industry attorneys are warning about a “third wave” of Lehman Brothers Holdings (LBHI) MBS trust claims against mortgage lenders and brokers based on the firm’s latest bankruptcy filing. Attorneys with the firm American Mortgage Law Group said Lehman Brothers for several years has been threatening to file residential MBS trust claims against the mortgage industry to counter trustee claims filed against LBHI in bankruptcy in 2009. The wait is...

An affiliate of NMI Holdings, Emeryville, CA, has issued a $211.3 million, 10-year credit-linked bond aimed at laying off risk at its mortgage insurance affiliate National MI. The notes were issued by NMI affiliate Oaktown Re Ltd. in three tranches: $98.61 million that filled the M-1 class, $98.61 million (M-2), and $14.1 million (B-1). The yields, respectively, are LIBOR plus 225 basis points, LIBOR plus 400 basis points, and LIBOR plus 575 bps. According to Robert Smith, National MI senior vice president of pricing and portfolio analytics, investors that bought the credit-linked notes were...

Fannie Mae and Freddie Mac continued to shrink their retained investment portfolios in the first quarter of this year by focusing on paring their MBS holdings. The two government-sponsored enterprises held a combined $560.04 billion in their retained mortgage portfolios at the end of March. That was down 1.9 percent from the previous period and 16.7 percent below year-ago levels. At their current pace, Fannie and Freddie are...[Includes one data table]

The Lone Star MBS received AAA ratings with credit enhancement of 34.10 percent on the senior tranche.

The Republican effort to reform many aspects of the Dodd-Frank Act was approved by the House Financial Services Committee last week on a party-line vote. The Financial CHOICE Act will likely be approved by the full House at some point, but DFA reform doesn’t appear to be a priority in the Senate. The House panel approved H.R. 10, the Financial Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs Act, on a 34-26 vote after a three-day markup ...

Nonbank lenders far out-produced depository institutions in originating FHA mortgages during the first quarter of 2017. A new Inside FHA/VA Lending analysis reveals that nonbank lenders produced over 83 percent of FHA forward loans endorsed during the first quarter. With over 8,000 entities listed as originators and sponsors in FHA loan-level data, the overwhelming majority of them were independent mortgage banks, mortgage brokers and other nonbank lenders. The 14 largest FHA originators were all nonbanks, led by Quicken Loans, Freedom Mortgage and loanDepot. One sign of the overwhelming fragmentation in the FHA primary market is the fact that these three lenders accounted for just 11.3 percent of first-quarter endorsements. The largest depository originator of FHA loans was PrimeLending, an affiliate of PlainsCapital Bank. It ranked 15th in production with a ... [charts ]