The average bid on the benchmark Fannie Mae 30-year 3.50 percent MBS fell to 102.2 this week compared to 104.5 earlier in the month, leaving some market watchers feeling sick to their stomachs. The general fear is that MBS prices may fall further over the short term as interest rates rise. The question for many boils down to the basics: Where will mortgages settle? As Inside MBS & ABS went to press this week, the yield on the 10-year Treasury reached...
Angel Oak Mortgage Solutions was hoping to make a big splash this year by being the first lender to securitize newly originated nonprime mortgages since the housing bust. It now appears those plans are on hold. According to officials who said they have been briefed on the situation, the Atlanta-based Angel Oak is now shopping around a roughly $100 million package of nonprime loans, many of which were originated over the past year. One investor said...
There is good news for investors in private student-loan ABS these days, according to the latest market intelligence from industry analysts. Student loan performance was healthy in the first quarter, and more growth is expected going forward. Continued strong performance trends were seen in repayment, delinquencies and charge-offs for private student loans through March 31, 2015, according to the semi-annual private student-loan performance report from MeasureOne, which was released earlier this week. Among the key findings, year-over-year delinquencies continued...
Securitization industry participants are concerned about a recent ruling in a federal appeals court that overturned longstanding preemption certain nonbanks have enjoyed from state laws, including standards for debt collection. The ruling in late May by the Second Circuit Court of Appeals in the case of Madden v. Midland Funding could pose “significant implications for the securitization industry,” according to the Structured Finance Industry Group. The case involves...
JPMorgan Chase recently won in a long-running lawsuit with Deutsche Bank, limiting potential liabilities it inherited from purchasing the embattled Washington Mutual in 2008 at the behest of federal banking regulators. U.S. District Court Judge Rosemary Collyer in Washington, DC, ordered that liabilities for representation-and-warranty breaches be split between JPMorgan and WaMu Mortgage Securities Corp. The judge decided that JPMorgan would be liable only to the extent that the liabilities were on WaMu’s books as of Sept. 25, 2008. The remaining liabilities would remain at WaMu. Only a short order was released...
While issuance of jumbo mortgage-backed securities is the strongest it’s been in the aftermath of the financial crisis, industry analysts suggest that it will be years before activity in the non-agency MBS market returns to levels anywhere near what was seen before the financial crisis. “The short-term outlook remains dismal,” said Quincy Tang, a managing director and head of U.S. residential MBS at DBRS. The factors that have limited issuance ...
DBRS and Standard & Poor’s separately issued revised criteria for rating non-agency mortgage-backed securities in recent weeks. DBRS will give slightly more credit to jumbo MBS due to strong performance in recent years, while S&P adjusted modeling relating to home price trends. DBRS noted that from 2010 through the end of April, $32.1 billion in jumbo MBS had been issued, with only one deal taking any losses to date, a 0.04 percent loss. “Positive loan attributes ...
A final rule issued by the Securities and Exchange Commission regarding third-party due diligence providers and rating services takes effect on June 15. The rule is set to prompt a number of changes in the non-agency mortgage-backed security market, largely targeting transparency. For MBS that receive ratings, public disclosure of results from third-party due diligence reviews will be required before a deal is priced. The disclosure requirement even applies to deals issued as private placements, which is the current practice for jumbo MBS ...
Ocwen Financial’s servicing of certain mortgages in non-agency mortgage-backed securities remains at risk due to a downgrade watch issued last week by Standard & Poor’s. Officials at Ocwen said they were surprised by the announcement while noting that Moody’s Investors Service upgraded various ratings relating to the nonbank. S&P said it placed servicer ratings for Ocwen on watch for downgrade last week due to regulatory scrutiny of the company, results from ...
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