A bill that would create a legislative framework for a covered bond market in the U.S., as well as a potential competitor for the Federal Home Loan Bank system, cleared committee this week following some fine-tuning by its sponsors and is headed to the full House for consideration.The House Financial Services Committee voted 44-7 in favor of H.R. 940, the U.S. Covered Bond Act of 2011.
Expect the $11 trillion residential mortgage market to continue struggling to find its footing as market watchers anxiously await for an improved economy and employment picture to revive the sector from recession-induced stupor, according to the Aite Group. Although the residential mortgage market will eventually come back as the economy improves, the ease and speed with which the mortgage-backed securities market recovers is highly dependent on the structural and regulatory forces governing MBS securitization, particularly as it relates to ...
Four more executives have been handed down jail terms for their role in a $2.9 billion fraud scheme that defrauded Freddie Mac, among others, and contributed to the failures of Colonial Bank and Taylor, Bean & Whitaker.
There is a huge disconnect between some members of Congress and the reality of the private market, that broad investor appetite for non-agency mortgage-backed securities is unlikely to rebound anytime soon, according to panelists at the American Securitization Forum annual conference. Once you figure out how to get the government sector out of the market, [the belief is that] the private sector will step in and pick up all of that slack, and therefore they will do...
The proposed rule on risk retention for MBS and ABS needs to be re-drafted and published again for another round of public comment because many definitions are unclear and, as it stands now, the proposal is a viable threat to the securitization market, according to industry groups. Although federal regulators recently extended the comment period on the proposal, both the Se-curities Industry and Financial Markets Association and the American Securitization Forum submitted detailed critiques of the plan late last week. SIFMA has described...
With most of the attention focused on loan originators, securitizers and mortgage servicers in the recent foreclosure mess, trustees have managed to escape regulatory scrutiny. But not for long. The relative safety enjoyed so far by trustees ended this week as reports surfaced of a joint in-quiry by the New York and Delaware attorneys general into whether documents in mortgage securitiza-tion transactions for which the Bank of New York Mellon and Deutsche Bank were named trustees are proper and valid. The offices of NY Attorney General Eric Schneiderman and DE Attorney General Joseph Biden III...
New federal restrictions on mortgage broker compensation will likely add momentum to the shift away from wholesale mortgage production programs and ultimately dampen MBS prepayment speeds, according to an analysis by Barclays Capital. Most major primary market lenders have been moving away from the broker market since the housing sector began to crumble in 2007. According to Inside Mortgage Finance, an affiliated newslet-ter, the broker share of new mortgage originations peaked in 2005 at 31.3 percent of primary market lending. Between 2005 and 2007, brokers accounted...
The Federal Reserve Bank of New York last week sold only $1.9 billion of the initial $3.8 billion of non-agency MBS up for auction out of its Maiden Lane II portfolio. On March 30, 2011, the NY Fed announced that through its investment manager, BlackRock Solutions, it would begin the process of selling assets in the MLII portfolio both individually and in segments over time as market conditions warrant through a competitive sales process. Maiden Lane was created to bail out American International Group during the financial crisis and acquired...
The supply of single-family MBS outstanding in the market declined again in the first quarter of 2011, hitting its lowest level since the third quarter of 2007, according to an Inside MBS & ABS analysis of new agency data. Single-family MBS totaled $6.564 trillion as of the end of March, down 0.4 percent from the end of 2010. The single-family MBS market peaked in the third quarter of 2009 at $6.981 trillion and has been in steady decline since then. Thats largely because the supply of home loan debt has been declining since early 2008 as house values have eroded, cash-out refinance activity has...[includes one data chart]
Much of the confusion in the foreclosure mess and the resulting litigation stems from a blurring of two distinct issues, the validity of the original transfer of ownership of the mortgage and the promis-sory note, and defects in the foreclosure process, according to a top industry legal expert. Theres been a co-mingling of two distinct issues, and I think what we find is that the issues...