Home prices are improving at a rapid pace throughout the nation, sparking bidding wars in certain markets, according to several different indices. But this rise in “home equity” is also spurring talk that the two largest players in residential finance – Fannie Mae and Freddie Mac – could be sitting on large unrealized gains in both their MBS and whole loan portfolios. One veteran MBS investor told Inside MBS & ABS that home values have improved so much over the past 120 days that the government-sponsored enterprises may be looking at “monster” increases in the value of their holdings. “Keep in mind that these two are sitting on loans where a year ago the loan-to-value ratio was 115 percent,” said this investor. “But most of this stuff isn’t underwater anymore. If [the GSEs] re-calculate their reserves, they will see some huge gains.” In its 10-Q filing for the first quarter, Fannie reported...
Bank and thrift holdings of non-mortgage ABS declined slightly in the first quarter of 2013, but remained well above a year ago, according to a new Inside MBS & ABS ranking and analysis. Banks and thrifts held $163.7 billion of ABS in portfolio as of the end of March, off 0.5 percent from the previous quarter. But early 2013 holdings were up 9.0 percent from the first quarter of last year, including increases in most ABS categories. The call-report ABS data include...[Includes one data chart]
The auction market for nonperforming mortgages is picking up a full head of steam this year and could be bolstered by securitizations, according to investors and advisors who play in that space. Gordon Albrecht, executive vice president of FCI Lender Services, said he has a hedge fund client that is presently working on a $40 million securitization of nonperforming residential loans. Albrecht said he could not identify the client, though he noted that Wells Fargo is involved in the transaction along with a foreign bank. He added...
JPMorgan Chase is set to issue a unique jumbo MBS, its second of the year, that will include originations from 20 different lenders that far outweigh the company’s contributions to the deal. Another bank, EverBank, this week took steps to issue its second jumbo deal of 2013 as well. Since 2008, big banks have largely held their non-agency jumbo originations in portfolio, seeing better execution than non-agency MBS issuance. However, strong demand from non-agency MBS investors and a desire to shrink mortgage exposure has prompted Chase to resume issuing jumbo MBS. Chase declined...
Non-agency MBS execution for certain high-quality mortgages is competitive with agency MBS execution, according to industry analysts. A slight increase in the guaranty fees charged by the government-sponsored enterprises would make non-agency securitization even more attractive, though the incentive for banks to hold non-agency originations in portfolio remains strong. Non-agency MBS execution is currently competitive with agency MBS execution for purchase mortgages with loan-to-value ratios below 70 percent and credit scores above 740, according to analysts at Barclays Capital. “For the cleanest collateral, non-agency execution could be...
Since 2008, big banks have largely held their non-agency jumbo originations in portfolio, seeing better execution than non-agency MBS issuance, but all that could be changing.
Non-agency MBS execution is competitive with agency MBS execution for purchase mortgages with loan-to-value ratios below 70 percent and credit scores above 740.
The long-awaited boom in nonperforming loan sales may finally be here, as megabanks such as Wells Fargo, Citigroup and HSBC have begun testing investor appetites by offering large packages in the open market. According to investors and advisors who play in the space, Wells recently auctioned off an $800 million NPL package and HSBC sold a $750 million portfolio. Recently, Popular Bank said that it entered...
Through the first quarter of 2013, 1.1 million borrowers have received permanent HAMP modifications, well below the 3 million to 4 million the Obama administration projected when launching the program in 2009.
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