Fannie Mae, Freddie Mac and Ginnie Mae pumped out a respectable $152.3 billion in new single-family MBS in April, according to a new Inside MBS & ABS market analysis and ranking. Aprils issuance level was up 2.6 percent from March and reversed, at least temporarily, a two-month downturn in new production. The cyclical peak for the agency MBS market came back in November 2012, when a whopping $199.4 billion in new securities were issued. Although the market couldnt sustain...[Includes one data chart]
Fannie Mae is discouraging some of its newly minted seller/servicers from issuing MBS through swap transactions and is instead pushing them toward its cash window, according to lenders and advisors familiar with the issue. Fannie has increased its due diligence on lenders to ensure they are meeting, or are able to meet, the terms and conditions of an MBS issuance, said Tim Rood, managing partner in The Collingwood Group, a Washington-based advisory firm. Rood, a former Fannie executive, told...
So far a broad cross-section of industry participants and other stakeholders support the steps the Federal Housing Finance Agency has taken to establish a new securitization platform for residential MBS, the agency said in a progress report issued this week. In light of the importance of this initiative to the housing finance system, and reinforced by the comments received from the public, FHFA has directed the enterprises to move forward on the development of the [common securitization platform], the agency noted. In early March, FHFA Acting Director Edward DeMarco said...
Standard & Poors, along with Moodys Investors Service, last week settled a lawsuit involving their pre-financial crisis securities ratings before it got to a jury trial, but S&P suffered a setback with another ratings challenge lawsuit brought by Connecticut state officials. Experts predict a pickup in MBS litigation ahead of pending filing deadlines for legal challenges. S&P and Moodys reached the confidential settlement with a group of 14 plantiffs led by Abu Dhabi Commercial Bank and King County, WA. Abu Dhabi and the over investors filed suit in 2008 and 2009 in Manhattan federal court claiming that the defendants misled them by allegedly inflating ratings on two structured investment vehicles they purchased. By settling the investors lawsuit, which claimed $638 million in losses, S&P and Moodys were able...
Issuance of securities backed by servicer advance receivables has increased significantly recently and is expected to continue to grow, fueled by nonbank servicers and demand from investors. However, analysts at Standard & Poors warn that servicers are increasing their use of unconventional features and product types, which could increase risks for investors. S&P rated $7.8 billion in servicer advance securities from the second quarter of 2012 through the end of the first quarter of 2013, up from $7.7 billion from the two-year period ending in the first quarter of 2012. S&P said issuance is expected to increase as more and more servicing assets trade hands and servicers use securitization to fund their collateral acquisitions. Recent issuance has been driven...
There were no real surprises this week from the Federal Open Market Committee, which announced it plans to continue purchasing additional agency MBS at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month. But observers continue to contemplate the Feds eventual exit strategy and how it will affect the markets. The committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency MBS in agency MBS and of rolling over maturing Treasury securities at auction, the FOMC said in what is becoming standard, boilerplate language. Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative. Also, the committee plans...