As leaders of the Senate Banking, Housing and Urban Affairs Committee double down on their efforts to craft a bipartisan mortgage finance reform bill, experts told lawmakers during a hearing this week that any reform effort must preserve the “smooth functioning” of the to-be-announced market. Given that it is reliant on MBS guaranteed by the government, the TBA market is “extremely sensitive” to any changes to the role that the government will have in the future housing finance system, according to Richard Johns, executive director of the Structured Finance Industry Group. “SFIG believes...
Home Loan Servicing Solutions is preparing to issue a $350 million servicer advance receivable ABS, according to a presale report issued late last week by Standard & Poor’s. With the deal, $5.3 billion in mortgage servicer advance ABS will have been issued this year, according to the rating service. S&P has been the dominant rating agency in servicer advance ABS. Erkan Erturk, senior director of global structured finance research at the rating service, said issuance of servicer advance ABS is on track to reach the $7.0 billion in issuance S&P predicted at the beginning of the year. HLSS Servicer Advance Receivables Trust Series 2013-T6 received...
Freddie Mac’s multifamily K-Deals are “a model for the future of mortgage securitization,” according to David Brickman, a senior vice president overseeing multifamily activities at the government-sponsored enterprise. However, the risk-sharing deals face regulatory hurdles and differ in a number of ways from practices in the residential mortgage securitization market. While Brickman pushed K-Deals as a model, it wasn’t the design used in the Structured Agency Credit Risk risk-sharing transaction Freddie issued in July. K-Deals include subordinate bonds that are not guaranteed by the GSE, while the STACR transaction was unsecured corporate debt based on a reference pool of mortgages with Freddie taking a small first-loss position followed by two non-guaranteed tranches. When Freddie issued the STACR transaction, the GSE stressed...
As Fannie Mae prepares to emulate the risk-sharing bond recently issued by Freddie Mac, concerns are arising that the government-sponsored enterprises are giving away a bit too much yield. Former GSE officials who have looked at Freddie Mac’s recent $500 million Structured Agency Credit Risk bond say the debt offering is a good investment for investors who are taking little risk while garnering a nice yield. According to Freddie Mac’s July offering circular on its STACR deal, the notes are divided...
Commercial banks and savings institutions held a total of $1.528 trillion in residential MBS in portfolio as of the end of the second quarter, down 2.1 percent from the end of March, according to a new analysis and ranking by Inside MBS & ABS. Combined bank/thrift investment in MBS has been under steady pressure since the Federal Reserve resumed buying massive amounts of new agency MBS. The second-quarter decline brought the industry’s total MBS portfolio to its lowest point in two years. The one area where banks and thrifts have beefed up...[Includes two data charts]
Stonegate Mortgage plans to raise up to $100 million in an initial public offering, according to documents filed with the Securities and Exchange Commission late last week. Meanwhile, stock prices for other mortgage-related companies that priced IPOs this year have declined. Stonegate is unique among mortgage company IPOs this year in that it’s not a real estate investment trust. Three of the four mortgage-related IPOs that have priced in 2013 have been for REITs and the other was a nonbank affiliated with a REIT. Stonegate was founded...
Two years ago, no megabank in its right mind would dare originate a jumbo mortgage without asking for at least a 20 percent downpayment – unless the borrower was a special client of the company’s wealth management division. Today, it’s a different story. As refi volumes begin to dwindle, a handful of large banks are loosening their jumbo underwriting standards, allowing for lower downpayment requirements and higher debt-to-income ratios. Wells Fargo has been offering...
The secondary market for mortgage servicing rights is starting to look a bit frothy, so much so that many bulk offerings today garner upwards of 12 bidders per auction. A year ago just a handful of investors showed up. But that isn’t deterring Michael Lau, CEO of Pingora Asset Management, who earlier this year raised $500 million to buy MSRs. Lau said Pingora is plowing ahead with its acquisition plans, careful not to overpay while concentrating on “flow” deals on new originations. “We’re actively doing...
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