A number of real estate investment trusts are increasing their presence in the jumbo mortgage-backed security market with conduit programs as well as purchases of subordinate tranches from new MBS. Two Harbors Investment said its jumbo conduit had a pipeline with an unpaid principal balance of $650 million at the end of the second quarter of 2014, more than four times the REIT’s pipeline at March 31. Two Harbors recently issued a $267.67 million jumbo MBS, the first from the REIT this year ...
The Securities and Exchange Commission this week unanimously approved a final rule covering registration and disclosures for asset-backed securities, including new non-agency mortgage-backed securities. The so-called “Reg AB2” measure requires significant changes for new non-agency MBS, including loan-level disclosures and a three-day waiting period before issuing new deals. “The SEC must protect investors in asset-backed securities just as it does investors in any other security ...
Bank of America last week agreed to a record settlement with the Department of Justice and others, largely involving non-agency mortgage-backed securities issued from 2003 through 2008. Officials at the DOJ said the settlement focused on disclosures provided by BofA and its affiliates, including Countrywide Financial, First Franklin and Merrill Lynch, to investors in the bonds. “It’s kind of like going to your neighborhood grocery store to buy milk advertised as fresh, only to discover that ...
The Securities and Exchange Commission this week approved a final rule with new requirements for rating services and due diligence providers. The rule was approved on a 3-2 vote, with the SEC’s two Republican-appointed commissioners chafing at standards required by the Dodd-Frank Act. Among other provisions, the SEC is requiring nationally recognized statistical rating organizations to strengthen their internal controls, establish new procedures designed to protect the integrity of rating methods ...
Goldman Sachs agreed to a settlement with the Federal Housing Finance Agency last week to resolve claims about non-agency mortgage-backed securities purchased by Fannie Mae and Freddie Mac before the financial crisis. The FHFA said the settlement will cost Goldman $1.20 billion and the firm will buyback non-agency MBS from the government-sponsored enterprises. The original balance of the securities owned by Fannie and Freddie that Goldman will buyback is ... [Includes five briefs]
Roughly $1 billion in damages will flow through to the FHA and Ginnie Mae from Bank of America’s record $16.65 billion global mortgage-backed securities settlement with the Department of Justice. Although most of the DOJ’s case centered around faulty private-label MBS that BofA and its forbears (namely Countrywide and Merrill Lynch) underwrote during the housing boom, a small piece of the settlement is tied to servicing chores that the bank did for Ginnie Mae. And apparently, BofA didn’t do a very good job of servicing the underlying product. The bank took over as the subservicer on roughly $26.2 billion in mortgage servicing rights that once belonged to Taylor, Bean & Whitaker, a large nonbank based in Ocala, FL. When TBW went bust in the second half of 2009, BofA was given the subservicing contract. “BofA serviced the loans for us,” said Ginnie Mae president Ted Tozer. “And they did a ...
An estimated $65.5 billion of FHA-insured mortgages, excluding reverse and modified loans, were included in Ginnie Mae mortgage-backed securities issued during the first six months of 2014, according to an Inside FHA Lending analysis of agency securitization data. Ginnie Mae FHA MBS issued during the first half of the year nearly matches the total number of new FHA loans originated over the same period (see related chart, p. 4-5). FHA purchase home mortgages served as collateral on 76.3 percent of Ginnie Mae MBS issued over the six-month period, while loans to first-time homebuyers accounted for 63.0 percent of Ginnie MBS issued during the period. The FHA loans in Ginnie pools over the last two quarters showed an average FICO score of 681, a loan-to-value ratio of 92.5 percent and an average loan amount of $169,093. Except for fifth-ranked Freedom Mortgage, the rest of the top five ... [1 chart]
The Financial Accounting Standards Board has updated its guidance on troubled debt restructurings (TDRs) to provide lenders some uniformity in accounting for government-backed mortgages upon foreclosure. The changes to FASB’s rule, “Receivables – Troubled Debt Restructurings by Creditors,” affect FHA and VA lenders and would take effect for public entities with reporting periods after Dec. 15, 2014. All other entities will have to comply after Dec. 15, 2015. “In addition to accounting consistency, the updated rule provides greater certainty as to the amount that can be expected to recover through the government guarantees,” the board said. The changes became necessary because the accounting varied among lenders, resulting in diverse practices, according to the Emerging Issues Task Force, which promulgates implementation guidance within the ...
Due diligence providers that work on MBS and ABS also will have to provide certifications to the rating services which will be disclosed on each rating issued.
RSS