MBS prices have been hovering around their highs for the year and could stay that way through the fall with minor corrections occurring along the way. “Prices have risen even on the good economic news,” said Joe Farr, director of sales and marketing for MBSQuoteline. “But they fell by about 1 percent over the past week.” Recently, when the Consumer Price Index rose, there was...
The credit quality of the collateral backing the most active types of structured finance securities is slipping, but remains above pre-credit crisis levels, according to Moody’s Investors Service. In a report issued last week, Moody’s cited several trends that signal the potential for higher credit risk, but the rating service said that many sponsors are building in subordination levels and other structural features that result in higher credit quality. “The degree of weaker underwriting and collateral quality in structured transactions varies...
The issue of eminent domain is rearing its head again, compelling mortgage and securitization industry groups to once more mobilize their resources to deep-six the latest initiatives. The most recent manifestation of a resurgent interest in eminent domain is in California, where John Avalos, a member of the San Francisco Board of Supervisors, has sponsored a resolution seeking to enter the city into a joint powers authority agreement with Richmond, CA, a vehicle by which both cities could seize underwater but performing mortgages using eminent domain. Avalos’ resolution targets...
Issuance of real estate mortgage investment conduits securities backed by agency MBS declined by 14.4 percent from the first quarter to the second, according to a new Inside MBS & ABS analysis. Fannie Mae, Freddie Mac and Ginnie Mae issued a total of $51.5 billion of REMICs during the second quarter. That left year-to-date production at $111.8 billion midway through 2014, down 25.8 percent from the same point last year. Ginnie remained...
Freddie Mac announced this week it has obtained insurance to cover some $285 million of losses on a pool of home loans as part of a risk-sharing effort encouraged by the government-sponsored enterprises’ regulator. The performance of these deals has been “stellar,” according to one analyst. The policies, tied to loans the GSE bought or guaranteed in the second quarter of 2013, were obtained under Freddie’s Agency Credit Insurance Structure. First rolled out in November 2013, this week’s most recent ACIS deal – the largest to date – demonstrates...
Securitization, particularly non-agency securitization of subprime and Alt A mortgages, has been widely blamed for the recent financial crisis, although less-studied home-equity loans also may have contributed, according to a government working paper. Results suggested that securitized home-equity loans have higher default risk and produce greater loss severity than similar loans held in portfolio by lenders, according to authors Michael LaCour-Little, a professor of finance at California State University at Fullerton, and Yanan Zhang, a financial economist at the Office of the Comptroller of the Currency. The authors sampled...
Fannie Mae and Freddie Mac issued $141.83 billion of single-family MBS during the second quarter, an encouraging 9.4 percent increase from the dreary levels recorded in the first three months of 2014.
One MI CEO, who we called, said this: “Thanks for reaching out. We, along with the other MIs are currently in confidential discussions with FHFA and the GSEs regarding the new standards. Unfortunately, we cannot comment until they are public.”
The sale of mortgages by banks took it on the chin in the first quarter. Lower originations is one explanation but are banks keeping more of their own production?
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