Wells Fargo Bank last week agreed to a $43 million settlement with a group of institutional investors to resolve two class-action lawsuits related to certain legacy residential MBS that resulted in huge investor losses.
An involuntary bankruptcy of a $630.2 million collateralized debt obligation was dismissed late last week, prompting praise from the Structured Finance Industry Group. Investors in senior tranches of the CDO had sought the bankruptcy, which SFIG warned would have yielded negative consequences for the securitization industry.
The average daily trading volume in agency MBS increased to $222.7 billion in October, the best reading since June, according to figures compiled by the Securities Industry and Financial Markets Association.
The Structured Finance Industry Group has welcomed a recent court ruling that allows ABS investors to intervene in a case brought by the Consumer Financial Protection Bureau that aimed to hold securitization trusts liable for violations committed by servicers.
Tax cuts signed into law at the end of 2017 prompted Ellington Financial to make plans to convert from a partnership to a real estate investment trust. The maneuver will require the company to sell some holdings that don’t meet REIT asset requirements, including collateralized loan obligations and investments in foreign MBS.
Increasingly worried about withering loan production and declining profitability of the mortgage industry at large, Ginnie Mae recently sent a letter to its 14 largest nonbank counterparties, asking them to develop strategies to right-size their operations.
Real estate investment trusts boosted their holdings of residential MBS during the third quarter, a period when two firms were acquired by larger players. [Includes one data chart.]
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