New issuance of agency MBS jumped dramatically in November, hitting its highest monthly production volume in over three years, according to a new Inside MBS & ABS ranking and analysis. Fannie Mae, Freddie Mac and Ginnie Mae combined for a whopping $199.34 billion in new single-family MBS during November, a 46.4 percent jump from the previous month. It was the highest monthly agency MBS output since June 2009, when $232.13 billion of MBS were issued. The November surge may reflect...[Includes one data chart]
A new non-agency jumbo MBS from a subsidiary of Credit Suisse Group includes some key differences compared with Redwood Trust deals, while pumping life into the non-agency market. DLJ Mortgage Capital issued a $329.89 million non-agency jumbo MBS late last week via a private placement; it was the companys third of 2012. CSMC Trust 2012-CIM3 received a AAA rating from Standard & Poors with credit enhancement of 5.85 percent on the top-rated tranche. The new Credit Suisse deal included...
A close comparative look at the stimulus activity of the Federal Reserve suggests its support of the MBS market delivers more bang for the buck to the overall U.S. economy than its purchase of Treasury securities, according to a top Fed official. [B]uying MBS has a different effect on the constellation of credit-market rates than buying Treasury securities, Fed Governor Jeremy Stein said in a speech. Taking a look at what happened in the credit markets in the wake of the Fed Open Market Committees Sept. 13 announcement of a new program to purchase an additional $40 billion a month of agency MBS, Stein found...
The Securities and Exchange Commission has quietly dropped an investigation of Wells Fargo in relation to certain MBS transactions that occurred during the recent financial crisis. In a recent SEC filing, Wells Fargo disclosed notification by the SEC staff on Nov. 20 that an investigation into possible investor fraud has been completed and that there would be no recommendation for any enforcement action. In February this year, the SEC served...
A federal appeals court has agreed to hear Credit Suisses appeal of a lower court ruling which gave the go-ahead for a group of investors in an IndyMac Bank MBS to proceed as a class in its suit against the lender. The U.S. Court of Appeals for the Second Circuit said last week it would hear Credit Suisses appeal of a Manhattan federal judges ruling in June which granted a December 2010 request for class certification to investors as they allege Credit Suisse misled them about the quality of toxic loans underlying a $642 million MBS offering in 2006. The plaintiffs claim...
To effect the types of changes required in order to bring private capital back to the housing finance market, a collaborative effort among market participants, regulators and policymakers will be necessary, noted the head of the Federal Housing Finance Agency. FHFA Acting Director Edward DeMarco told attendees of a Securities Industry and Financial Markets Association conference in New York City late this week that the existing secondary market infrastructure is broken and it will take agreement among market participants to decide the changes necessary in order to mend it better than ever. As we think about building a new infrastructure for the secondary mortgage market, we know...
Participants in the non-agency mortgage-backed security market are largely opposed to the Federal Housing Finance Agencys proposal to create a platform to issue standardized non-agency MBS. While the FHFA suggested that the platform could revive the non-agency market, industry participants suggest that many issues besides a platform are hindering non-agency MBS issuance. Key elements of the platform that are advantages for government-sponsored enterprise securitizations, such as standardization ...
A federal court in California recently dismissed claims by the Federal Deposit Insurance Corp. related to non-agency mortgage-backed securities purchased by a bank in 2007 and 2008. According to the ruling, the FDIC should have filed the lawsuit long ago and tolling did not render the claims as timely. FDIC v Countrywide Financial relates to $62.6 million in AAA-rated Countrywide MBS purchased by Strategic Capital Bank in 2007 and 2008. The FDIC was appointed as receiver of the bank on May 22, 2009 ...
Institutional investors are creating a rental market out of real estate owned properties without a mortgage-backed security structure in place, though industry participants anticipate that a REO rental securitization market will eventually develop. Some $8.0 billion has been raised by institutional investors to purchase REOs and rent them, according to Oliver Chang, founder and managing director of Sylvan Road Capital, which itself expects to invest $1.0 billion in the market in the next two years ...
Wells Fargo announced that the Securities and Exchange Commission recently completed an investigation of the companys disclosures from mortgage-backed security offering documents and no enforcement action will be taken. Arcus Lending, a mortgage broker and a direct lender in California, recently started offering an 80/10/10 mortgage in an effort to allow borrowers to avoid private mortgage insurance. There is a huge need for such a program and very few lenders ... [Includes two briefs]