Nearly all banks and thrifts gradually increased the fair market value they calculated for their mortgage servicing rights during the fourth quarter of 2012, according to a new Inside Mortgage Trends analysis of call report data. At the end of the year, banks and thrifts serviced a total of $5.323 trillion in home mortgages for other investors and they valued these MSRs at $41.43 billion. The ratio of fair market value of the MSRs to unpaid principal balance of loans serviced for others was ... [Includes one data chart]
Improving loan quality is sparking a major shake-out in the due diligence sector. Can jumbo production and MBS save the day? Meanwhile, the supply of MBS expanded slightly in the fourth quarter.
Although it expects to report “significant net income” for both the final three months and the full year 2012, Fannie Mae announced late this week that it will delay its earnings release while the GSE’s accountants continue to crunch numbers to determine if the company should take a lucrative but complex tax deduction. In a form 12b-25 filing with the Securities and Exchange Commission, Fannie requested a filing extension beyond its March 18 deadline because it needs more time to analyze its deferred tax assets, which are unused credits and deductions that can be used to cover future tax bills.“The release of the valuation allowance would have a material impact on the company’s 2012 financial statements and result in a significant dividend payment to the U.S. Treasury,” noted Fannie in its SEC filing.
An Alt A MBS investor won a court order temporarily restraining Nationstar Mortgage from auctioning off nonperforming loans from its MBS pools, a development that could result in a legal precedent being established on the practice, if it’s not already too late to matter. Back in February, Nationstar began auctioning NPLs on auction.com, according to a civil complaint filed by the investor, KIRP LLC, in the Supreme Court of New York. There are currently two additional auctions totaling some $750 million of NPLs listed on the internet auction site, both believed to be related to Nationstar. The company is...
Prepayment rates on non-agency jumbo MBS issued beginning in 2010 have been high as interest rates have declined significantly since then. However, industry analysts suggest that refinance activity is likely to be much lower for recently issued non-agency jumbo MBS as interest rates have stabilized at low levels, if not started to increase. “Stable mortgage rates are making refinancing less attractive to the newest mortgage borrowers, which should keep prepayment rates on loans originated over the last several months slower than those originated between 2010 and 2012,” said Grant Bailey, a managing director at Fitch Ratings. Only 12.6 percent of the original balance on the $237.84 million non-agency jumbo MBS issued...
A number of significant former members of the American Securitization Forum are working to form a new trade group, with a formal announcement possible as soon as this week. Meanwhile, Tom Deutsch, executive director of the ASF, said his group continues to work with more than 300 members. As many as 30 firms could be a part of a new securitization trade group, with the name “Structured Finance Industry Group” being considered. Wells Fargo has confirmed that it will be a member of the new group. Other firms that recently quit the ASF’s board or otherwise ended their membership with the ASF include...
Fannie Mae and Freddie Mac could suffer losses of nearly $2 billion on the fair value of their assets if interest rates fluctuate upward by just a single percentage percent, according to the Federal Housing Finance Agency’s official watchdog. A white paper issued this week by the FHFA’s Office of Inspector General found that despite moves by the Finance Agency and the Treasury to require the two government-sponsored enterprises to substantially downsize their mortgage asset portfolios, interest rate risk remains a “significant concern.” “The increasingly illiquid nature of the GSEs’ mortgage asset portfolios presents...
Redwood Trust recently came to market with a $287.5 million convertible debt offering which was snatched up by investors – a sign that not only is the real estate investment trust doing well with its jumbo securitization business, but other mortgage issuers might meet similar results if they need to borrow money in the capital markets. Mike McMahon, a managing director at the company, told Inside MBS & ABS that the jumbo issuer decided to tap the debt market as “a way to support our investment activity for 2013. If we securitize $7 billion and retain the subs, we will need capital.” Redwood hopes...
RSS