No matter how cleverly hidden, the Securities and Exchange Commission can eventually ferret out bad business practices – a costly lesson learned by AlphaBridge Capital Management. The SEC ordered AlphaBridge, a registered hedge-fund adviser, and two of its principals to pay a $5 million penalty for allegedly inflating the prices of illiquid MBS held in hedge-fund portfolios managed by the firm. The SEC charged...
The Royal Bank of Scotland may face having to pay a potential settlement of $13 billion amid claims that it sold faulty MBS to Fannie Mae and Freddie Mac, according to court documents. RBS was part of a string of litigation initiated in 2011 by the Federal Housing Finance Agency against 18 financial institutions. The suits alleged violations of federal securities laws and state laws in the sale of the non-agency MBS between 2005 and 2007. “MBS volumes linked...
Issuance of jumbo mortgage-backed securities leveled off in the second quarter of 2015 after posting strong gains in the previous three quarters, according to a new ranking and analysis by Inside Nonconforming Markets. Some $3.11 billion in jumbo MBS was issued in the second quarter, down 32.5 percent from the first three months of the year. After unexpected fluctuations in interest rates in mid-2013, jumbo MBS issuance averaged ... [Includes one data chart]
Two rating services in the past month have completed reviews of jumbo mortgage-backed securities issued in 2010 and later. The reviews led to numerous rating confirmations, some upgrades and no downgrades, prompting questions about whether criteria for rating jumbo MBS are too stringent. “I’d guess the rating services internally said ‘never again’ for downgrades,” said one participant in the jumbo MBS market. Officials at Fitch Ratings and DBRS ...
For the non-agency market, the impact of anticipated action by the Federal Reserve on short-term interest rates depends on whether interest rates on mortgages also increase, according to industry analysts. Industry participants continue to wait for the Fed to increase the federal funds rate and ponder the impact higher rates will have on originations and performance. “The effect of an interest rate increase on new residential mortgage-backed security transactions will ...
Servicers involved in national settlements are largely in compliance and making progress toward completing their loss-mitigation requirements, according to reports released in the past two weeks. Joseph Smith, the monitor of a settlement involving non-agency mortgage-backed securities that requires JPMorgan Chase to complete $4.0 billion in credited loss mitigation, said that as of the end of 2014, Chase was credited with $3.32 billion in relief ...
Ginnie Mae issuance of government-insured mortgage-backed securities rose a whopping 47.3 percent in the second quarter of 2015 from the previous quarter, powered by a robust FHA refinancing volume, according to an Inside FHA/VA Lending analysis of agency data. Government-backed Ginnie MBS production in the second quarter totaled $117.5 billion, up from $79.8 billion in the prior quarter. Volume year-to-date also increased by 57.7 percent from the first six months of last year. From May to June, government-backed securitization increased a modest 2.9 percent. FHA loans comprised 62.6 percent of Ginnie MBS issuance in the second quarter while VA accounted for 33.7 percent. Securitized loans with a Rural Housing Service guaranty represented 3.6 percent of total Ginnie MBS issuance during the period. FHA loan securitization was robust in the second quarter, as volume ... [ Charts ]
Thanks to the recent uptick in interest rates, sellers of mortgage servicing rights are seeing strong bids on new production, but the market is being described by advisors as “sustainable,” compared to some of the frothy peaks of last year. June was actually a slow month for servicing sales, dealmakers told Inside Mortgage Finance, but that was to be expected, given all the contracts inked in April and May that needed time to close. With the second quarter having just ended, several large flow and bulk MSR transactions are...
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