The stock market hasn’t been treating real estate investment trusts that buy MBS very well of late, but there could be better news on the horizon: prepayment rates on the securities they own are coming down. As Barclays noted in a recent report: “Prepays fell for most cohorts, led by recent vintage 3.5s and 4s.” The investment banking firm added: “Next month, we expect speeds to remain mostly stable as seasonal factors and a 12 basis point rally in driving rates (3.83 percent vs 3.95 percent) helps offset another one-day drop in day count (20 days vs 21 days).” Several mREITs tracked...

Delinquencies on commercial MBS hit a post-recession low in January before inching up 10 basis points to 4.72 percent the next month, according to figures compiled by Fitch Ratings Service. Then again, Fitch appears to be mostly bullish on the sector, noting that the uptick in late payments was caused by a change in its methodology and that under the old rules delinquencies would have fallen to 4.55 percent. The ratings change excluded deals backed by wireless towers, outdoor advertising and what it calls “certain other non-traditional transactions.” Hotel collateral has...

Despite the Federal Housing Finance Agency’s misgivings about Property Assessed Clean Energy programs, ABS issuers are finding investors for deals backed by these loans. Since March 2014, three rated residential ABS transactions and one private unrated commercial deal backed by PACE assessments have been issued for a combined total of $503.65 million. All three residential ABS deals were rated “AA,” with average assessments totaling $59,628. The PACE program was launched in 2008 by the city of Berkeley, CA, as a pilot to promote energy efficiency in residential, commercial, agricultural and industrial properties...

One advisor reminded us that in the world mortgage M&A many potential deals go south...

PennyMac Financial Services also originated $8.9 billion of home mortgages in 1Q, an 11.3 percent increase compared to the previous quarter.

Two Harbors is developing a network of lenders that will sell MSR assets to the company on a flow basis.

Like Freddie Mac, Fannie cautioned that future earnings will be lower because of the company’s mandate to shrink.

The overall size of the single-family mortgage servicing market isn’t changing much, but the dynamics of the business continued to shift in early 2015, according to a new Inside Mortgage Finance analysis and ranking. The Federal Reserve won’t provide an official reading on single-family mortgage debt outstanding as of the end of the first quarter for another month or so, but the data point to little or no growth in the market during early 2015. Mortgage originations were...[Includes two data charts]

Thanks to the recent uptick in interest rates, the value of mortgage servicing rights is on the rise again, which should pave the way for a busy spring and early summer for investment bankers who play in the space. “Prices are holding up pretty well,” said Mark Garland, president of MountainView Servicing Group, Denver. “Prepayment speeds increased in March, but April speeds have come down a bit.” According to Garland, buyers of receivables are paying...

Freddie Mac will send $746 million to the U.S. Treasury under the conservatorship plan that siphons off nearly all the government-sponsored enterprise’s net profit every quarter, but that’s not all the cash being milked from the GSE. During the first quarter of 2015, Freddie sent $219 million to Treasury under the 2011 law that squeezed the GSEs to pay for a continuation of a payroll tax cut for U.S. workers. The levy is 10 basis points of guaranty fee charged by Freddie and Fannie Mae, and it’s a steadily rising amount as a greater share of GSE business is subject to the charge. In the first quarter of last year, Freddie paid...