Much like the GSEs, banks have the ability to share credit risk on a pool of assets. However, bank CRT issuance has been limited thus far as industry participants wait for an endorsement from banking regulators.
MBS trading bounced back in September to highs not seen since the spring. As for meaning, that’s a hard one. At the very least, newer higher yielding securities might be in short supply.
Declining home prices have MBS investors worried about potential losses and downgrades. Officials from rating services said their assessments include significant stresses.
The saga of non-QM lender Sprout Mortgage continues. The now-defunct shop is the target of a new lawsuit filed by a warehouse lender. Meanwhile, Sprout is trying to place unsold whole loans.
Stress testing suggests that broadly syndicated loan CLOs are resilient to collateral depreciation, according to Fitch. Though DBRS expects some reduction in credit quality increased defaults.
Credit Suisse settles legacy non-agency MBS lawsuit; Fannie and Freddie to publish aligned social disclosures for single-family MBS; bank trade groups seek change in FHFA’s capital treatment relating to access of FHLBs; Ginnie portal to re-open Oct. 25; aviation ABS investors in holding pattern on collateral in Russia.
Production of non-agency MBS suffered a third-straight sharp decline in quarterly issuance. The biggest hit was in the prime RMBS sector, where jumbo securitization dropped and GSE-eligible activity nearly disappeared.
A trial that started in September after years of delays ended with a settlement. Bank of America agreed to pay $1.84 billion to settle claims tied to non-agency MBS issued by Countrywide Financial prior to the 2008 financial crisis.
AGNC Investment and Annaly Capital Management provided preliminary third-quarter results this week. Book value declined and leverage increased on a sequential basis.
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