Performance of the subprime auto ABS market is expected to decline, which likely will prompt higher credit-enhancement requirements from rating services.
Freedom Mortgage plans to buy RoundPoint Mortgage. But how will the corporate debt ratings of Freedom be affected? Fitch Ratings, for one, isn’t worried but the purchase price has not yet been publicly disclosed.
Investors and issuers are divided on the usefulness of disclosure requirements for MBS and ABS. While investors said disclosures encourage them to buy securities, issuers cited them as a burden.
Fitch Ratings called out other rating services for allowing credit enhancement levels that it views as inadequate on ABS from marketplace lenders. Other rating services are seen as getting more comfortable with the sector.
The trading volume was decent during April but paled in comparison to most other months this year. Meanwhile, investors are worried about the usual: declining interest rates and prepayment rates. And a new wild card has emerged: A possible rate cut by the Fed.
Liquidity does not appear to be a cause of concern for the secondary market agency’s top nonbank issuers despite differences in how liquidity issues are addressed from firm to firm.
FHFA Director Mark Calabria has vowed not to monkey with the 30-year FRM or lower loan limits in high-cost states like California. Still, certain stakeholders worry he may try to adjust other areas of businesses.
The firm this week postponed a $1 billion IPO for a new REIT that will purchase MBS and related assets. Down the road, the REIT likely will dip its toe in the non-QM pond as well.
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