Fitch has downgraded 37% of the airline ABS it rates. Kroll and S&P also recently conducted sweeping downgrades. The rating services said air travel isn’t expected to recover until 2023 at the earliest.
Sterling Bank has offered to buy back all non-QMs after uncovering various problems with its lending program. Between May and July, the bank repurchased loans from five MBS, taking a loss.
FHFA Director Mark Calabria hopes to finalize the GSE capital rule before yearend. But the proposal is so controversial that many industry watchers said it most likely won’t survive a change in administration.
The delinquency rate for commercial MBS continued to improve in September, but the “special servicing” rate surged to a seven-year high, signaling that economic fallout from the pandemic is still festering.
Compared to the last three pre-COVID Freddie transactions, the percentage of credit risk transferred via Agency Credit Insurance Structure deals has doubled for low-loan-to-value deals.
Nonbanks in the process of making their public debuts note that the refi boom (probably) won’t last forever, and they could eventually face financial difficulties making servicing-advance payments for loans in forbearance.
Issuance in the MBS and ABS markets seems to be humming along with tighter spreads. But industry participants warn investors should beware of over-optimism.
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