Upgrades of ratings on structured finance products hit an all-time high in 2015, according to a study released this week by S&P Global Ratings. The study tracked ratings across sectors and the world, while the U.S. residential MBS sector showed mixed performance. S&P said it had 30,359 ratings outstanding on global structured finance securities at the beginning of 2015. During the year, 9.8 percent of the ratings were upgraded. The rating service said upgrades in 2015 were most prevalent on structured credit deals in Europe and the U.S. Some 11.2 percent of S&P’s ratings were downgraded...
The issuance of prime non-agency mortgage-backed securities in 2016 is well below the relatively meager levels seen in recent years, according to a new ranking and analysis by Inside Nonconforming Markets. Some industry participants have blamed the lack of activity on the Truth in Lending Act/Real Estate Settlement Procedures Act disclosure rule that took effect in October. Although there are signs the market has adjusted to TRID, only two ... [Includes one data chart]
The nonprime mortgage-backed security issued last week by Lone Star Funds could spur an increase in MBS backed by non-qualified mortgages, industry analysts say. The $161.71 million COLT 2016-1 Mortgage Loan Trust was the first MBS backed by non-QMs to receive a rating. Some 51.8 percent of the mortgages in the deal were non-QMs. All of the mortgages were originated by Lone Star’s Caliber Home Loans. The A-1 tranche of the MBS priced at spread of ...
New criteria from Fitch Ratings for rating non-agency mortgage-backed securities include provisions regarding due diligence grades and the deal agent position planned by some issuers. The criteria published this week include a “realignment” of items that result in C grades and D grades on mortgages reviewed by third-party due diligence firms. The changes include reviews for compliance with the Truth in Lending Act/Real Estate Settlement Procedures Act ...
The $1.89 billion non-agency mortgage-backed security issued by JPMorgan Chase Bank in April looked promising for boosters of the non-agency MBS market. However, analysts at one of the firms that rated the deal suggest that a number of factors could limit other banks from following Chase’s lead. “Some banks are likely hesitant to securitize loan portfolios because securitizations could reduce return on equity at a time when banks are already struggling to meet ...
Bank and thrift holdings of non-agency mortgage-backed securities continue to decline on aggregate, mirroring the gradual drop in the amount of outstanding non-agency MBS. Banks and thrifts held $78.66 billion of non-agency MBS as of the end of the first quarter of 2016, according to a new ranking from the Inside Mortgage Finance Bank Mortgage Database. The holdings declined by 5.0 percent from the previous quarter and by ... [Includes one data chart]
Ocwen Financial faced mixed results in servicing litigation recently while avoiding further downgrades of its corporate issuer default rating. Last week, Ocwen announced that it had agreed to settle two lawsuits brought by the Department of Justice involving the Home Affordable Modification Program and FHA mortgages. The pending $30 million settlement involves alleged violations of the False Claims Act, among other issues. The lawsuits were brought in 2012 by ...
Ginnie Mae has good reason to be concerned about rapid demographic change in its relatively small issuer community. Nonbank institutions – many of them relatively newly formed and based on nontraditional business models – are taking over the market. Nonbank issuers accounted for a whopping 69.4 percent of Ginnie’s issuance of single-family mortgage-backed securities during the first quarter of 2016. A year ago, their share was 64.6 percent. Two years ago it was 46.7 percent. With those kinds of gains on the production line, it’s not hard to see why nonbanks are claiming a growing share of Ginnie servicing outstanding. At the end of March, nonbanks owned 46.7 percent of Ginnie single-family mortgage servicing rights, up a hefty 11.5 percentage points in one year. That rate of growth can’t be accomplished just by producing new MBS because the servicing market simply doesn’t grow that fast. (Although the Ginnie market has grown significantly faster than any other segment of ... [ 2 charts ]
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