A subsidiary of Nomura Holdings is preparing to issue a non-agency jumbo MBS, the Wall Street firm’s first deal backed by new production since 2007. Rising interest rates and concerns about investor demand don’t seem to have put a damper on non-agency MBS issuance, as Redwood Trust cranked out another jumbo deal last week and Springleaf Finance issued a security backed by vintage subprime mortgages this week. The $440.08 million non-agency jumbo MBS from Nomura Corporate Funding Americas is set to receive a AAA rating with credit enhancement of 7.60 percent on the top-rated tranche, according to a presale report released this week by Kroll Bond Rating Agency. The credit enhancement was increased due to geographic concentration risk because 74.0 percent of the mortgages to be included in NRP Mortgage Trust 2013-1 were originated in California. Fitch Ratings warned...
It looks like Fannie Mae is taking advantage of an opening in the marketplace to unload some of its legacy non-agency residential MBS. Fannie is moving to divest itself of $1.1 billion in a transaction that was listed this week and expected to trade by week’s end, according to multiple market sources. After the Federal Housing Finance Agency told the government-sponsored enterprises in March to begin selling off at least 5 percent of their illiquid assets, the first round of liquidations took place in mid-May, as Freddie got rid of about $1.0 billion in seasoned non-agency RMBS, with Fannie subsequently selling approximately $2 billion of its multi-family commercial MBS. Round two began...
The Securities Industry and Financial Market Association cautioned drafters of a proposed model law on mortgage foreclosures against adopting a provision that would eliminate or repeal the holder-in-due-course rule in the case of home loan foreclosures. Commenting on the Uniform Law Commission’s discussion draft on the “Residential Real Estate Mortgage Foreclosure Process and Protections,” SIFMA urged the commission not to repeal or limit the holder rule. The trade group warned that the rescission of the rule in the context of home loan foreclosures could convert a secured loan into an unsecured loan. “This is...
Over the past two years, Ginnie Mae has made a concerted effort to improve the speed at which it approves lenders to issue MBS, but certain factions of the industry continue to complain that the process is terribly slow. “Let’s face it. It takes a long time to get approved by Ginnie Mae,” said one advisor who works with the agency. Just how long? The answer depends on the shop and how good an applicant/lender is at filling out paperwork and answering follow-up questions from the agency. In general, it can take...
A recent decision by the Second Circuit Court of Appeals on a key aspect of the timing of securities lawsuits – squarely at odds with the ruling of another federal appeals court – has called into the question the legal viability of a 40-year-old Supreme Court precedent, prompting expectations that the high court will eventually clarify the conflict. The Second Circuit on June 27 ruled in Police & Fire System of City of Detroit v. IndyMac MBS Inc. to uphold a lower court ruling that blocked retirement systems from intervening in a putative class action that accused several major banks – including IndyMac, Morgan Stanley and Goldman Sachs – of misrepresenting certain MBS. The groups had attempted...
A subsidiary of Nomura Holdings is working on issuing a non-agency jumbo mortgage-backed security comprised solely of originations by First Republic Bank. The pending deal is set to receive a AAA rating from Kroll Bond Rating Agency, while Fitch Ratings warned that the proposed credit enhancement levels on the deal are too low for a AAA rating. The $440.08 million NRP Mortgage Trust 2013-1 is structured to include credit enhancement of 7.60 percent on the tranche with a AAA rating from KBRA. Fitch said ...
Beginning Jan. 1, capital requirements for bank holdings of certain non-agency mortgage-backed securities will begin to increase. The changes were included in the Basel III reforms approved by federal banking regulators last week. The Basel III final rule includes the simplified supervisory formula approach in lieu of the use of credit ratings to determine capital requirements for holdings of non-agency MBS. The SSFA relies on the 90+ delinquency rate, risk weights of the underlying exposures ...
After long delays, Freddie Mac is close to selling a mortgage-backed security that will include non-agency risk-sharing features. The sale will be part of efforts by the two government-sponsored enterprises to test risk-sharing arrangements on at least $30 billion of business this year, as required by the Federal Housing Finance Agency. A Freddie spokesman said it is “premature” to comment on any deals, but those with knowledge of the pending issuance said the GSE hired Credit Suisse to help market the security ...
RSS