ABA stands to be an “influencer” in the debate not just because of the size of its bank membership base, but because depositories rank a close second to the Federal Reserve among the largest investors in agency securities.
TD Bank is by far the biggest bank investor in card ABS, and in ABS overall, but its $12.71 billion portfolio of card ABS was down some $702.6 million from December.
Commercial banks and thrifts continued to have modest interest in holding non-mortgage ABS during the first quarter of 2017, according to a new Inside MBS & ABS ranking and analysis. The banking industry held $123.43 billion of ABS in its held-to-maturity and available-for-sale investment portfolios at the end of March. That was down 0.3 percent from December. The overall supply of ABS outstanding, excluding collateralized debt obligations, fell...[Includes two data tables]
Credit Suisse this week issued a $91.2 million non-agency MBS backed by seasoned FHA mortgages. CSMC 2017-FHA1 marked the first non-agency securitization of re-performing FHA mortgages since 2010. The deal received an A rating from DBRS and an A1 rating from Moody’s Investors Service with subordination of 16.50 percent on the senior tranche. Moody’s cited a number of credit “challenges,” including uncertainty about FHA insurance payouts for liquidated mortgages, insufficient information on loan modifications and weak representations and warranties. The mortgages in the deal have...
While the industry continues to debate the merits of allowing Fannie Mae and Freddie Mac to build a capital cushion for “zero day” in 2018, investors in MBS have a different agenda: making sure that whatever the future holds for the government-sponsored enterprises, it had better include a federal guarantee on conventional mortgage securities. Without it, the MBS market would suffer greatly – as would residential lending and the sale of new and existing homes. So far, no one knows...
There are signs of trouble ahead for the subprime auto ABS sector that warrant closer attention to the financial health of that class of borrowers, but it looks like the rising risk is contained, according to some research reports published this week by a pair of Wall Street analysts. In one of the reports, Wells Fargo Securities analysts John McElravey and Ryan Brinkoetter warned of the implications for the fiscal soundness of the borrowers involved. They reviewed the total and voluntary prepayment rates of the major subprime auto ABS issuers, and calculated the average prepayment curves by deal age for issuer and vintage over the 2013-2016 time period. “Much of the analytical focus in auto ABS has been...
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