New York’s six-year statute of limitation for breach of rep-and-warranty claims in RMBS does not raise investor risk significantly if the deal comes with full, upfront third-party due diligence.
November was a so-so month for MBS trading as investors dumped bonds and bought stocks. Still, lending is strong, which should bode well for the creation of new agency securities.
Significant increases in securitization rates were recorded in the conventional-conforming, government-insured and nonprime markets. Relatively few jumbo loans are pooled in non-agency MBS. (Includes data chart.)
The Structured Finance Association issued new guidelines for testing loans in non-agency MBS for compliance with TRID. Requirements were reduced, with industry participants growing more comfortable with TRID liability.
Fitch warned this week that other rating services are "overstating" the benefits of the structures on whole-business securitizations. The warning comes on the heels of a report from Moody's which carried a positive outlook for the sector.
The key factor for TBA investors is prepayment speeds. A quick scan of the FHFA data show that the conditional prepayment rates for UMBS issued by Fannie and those issued by Freddie have remained comparable since the launch of the single security in June.
Private-label commercial MBS issuance likely will climb to $120 billion in 2020 thanks to low interest rates and benign commercial real estate conditions. But there's a never-ending storm cloud: retail.
With the Dow Jones Industrial Average headed higher, more REITs are selling additional shares of common, striking while the iron is hot. Meanwhile, Invitation Homes is pulling out of Memphis.
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