A lot of ABS issuers that sat out the final three months of 2016 came back to the market early this year, according to a new Inside MBS & ABS analysis and ranking. Some $53.38 billion of non-mortgage ABS were issued during the first quarter, a huge 55.9 percent jump from the previous three-month period. The market didn’t quite match the high point of last year, but issuance in the first three months of 2017 was up 23.1 percent from the same period in 2016. First-time issuers and those that didn’t issue in the fourth quarter accounted...[Includes two data tables]
S&P Global Ratings proposed changes this week to its criteria for rating non-agency MBS. The changes would provide higher ratings to certain tranches of non-agency MBS backed by new prime mortgages while prompting lower ratings for new issuance backed by seasoned mortgages. The rating service is considering a number of adjustments to foreclosure assumptions, loss severity projections and changes relating to the evaluation of qualitative factors. “The proposed revisions to our methodologies and assumptions are...
Recent signs of life in the nonprime securitization market have lifted the hopes of participants from coast to coast, but a potential snafu could be in the works in the form of strong investor demand for whole loans. According to some participants, recent whole-loan bids have been as high as 104. “That’s for newly originated non-qualified mortgages,” said one manager who spoke under the condition his name not be used. The implication is...
Secondary market participants would see a host of changes across the regulatory landscape under a detailed discussion draft of an overhaul to the Dodd-Frank Act that began circulating late last week from the office of House Financial Services Committee Chairman Jeb Hensarling, R-TX. The Financial CHOICE Act, resurrected from the 114th Congress and revised in a number of key areas, would eliminate the Dodd-Frank risk-retention requirements for ABS other than residential mortgages. Elsewhere, wording in the bill has been included...
As Congress considers changes to the Dodd-Frank Act and other regulatory reforms, the Structured Finance Industry Group weighed in with a white paper detailing various regulatory reforms sought by participants in the MBS and ABS markets. One of the top priorities for the trade group is the so-called Regulation AB2, which sets loan-level disclosure requirements for securities. The Securities and Exchange Commission set...
Ocwen Financial’s travails continued to worsen this week after rating agencies announced adverse ratings actions amid the servicer’s mounting regulatory and legal problems. On April 24, Moody’s Investors Service placed Ocwen’s servicer assessment on review for a possible downgrade. On April 25, Fitch Ratings revised its previous rosy affirmation of the company’s primary servicer rating and stable outlook to negative. Both firms said the ratings actions were due to the increased regulatory scrutiny on Ocwen’s servicing operations, which could lead to hefty penalties that could pose a threat to the company’s financial stability. On April 20, a consortium of state mortgage regulators filed...
With Fannie Mae and Freddie Mac set to lose their capital buffers in eight short months, industry trade groups, think tanks and policy wonks are churning out reform blueprints at warp speed these days even though Congress likely won’t act until sometime next year, if then. Last week, the Mortgage Bankers Association floated its plan to reconstitute the two government-sponsored enterprises – followed by several critiques, not all of them kind – and this week the Independent Community Bankers of America published its proposal. Both plans throw...
An affiliate of Lone Star Funds is set to issue the largest nonprime mortgage-backed security backed by post-crisis originations. The deal will be nearly twice the size of the previous record holder, which was also issued by Lone Star. Most of the mortgages in COLT 2017-1 Mortgage Loan Trust were originated by Lone Star’s Caliber Home Loans, along with a 22.0 percent share for loans originated by Sterling Bank and Trust. The deal received preliminary AAA ratings from DBRS, Fitch Ratings ...
Holdings of non-agency mortgage-backed securities by most banks and thrifts are declining, according to a ranking and analysis by Inside Nonconforming Markets. Banks and thrifts held $63.00 billion of non-agency MBS as of the end of 2016, down 23.9 percent from the end of 2015. The holdings are concentrated among five banks, which accounted for 64.9 percent of all non-agency MBS held by the industry as of the end of 2016. JPMorgan Chase held ... [Includes one data chart]
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