The banking industry continued to show tepid interest in the non-mortgage ABS market as 2017 came to a close, according to a new Inside MBS & ABS ranking and analysis.
Ginnie Mae’s recent action to curb loan churning and faster prepayments will not be the last as the agency strives to protect veteran borrowers and investors against predatory refinancing practices, according to analysts.
The House last week passed a bill that industry participants insist will add stability to the secondary market. It would effectively overturn a 2015 court ruling that has introduced uncertainty for MBS and ABS, according to the Structured Finance Industry Group.
The average daily trading volume in agency MBS totaled $236.1 billion in January, the highest reading of the past year, and a sign that liquidity is strong. Compared to the month prior, trading activity increased by 12.8 percent, according to the Securities Industry and Financial Markets Association.
Even though the chances of housing-finance reform passing this year are growing dim, it hasn’t stopped the mortgage industry from promoting a model where a “guarantor-based” system eventually emerges.
The credit-risk transfer market created in recent years by Fannie Mae and Freddie Mac is better poised to warn of systemic risk than the MBS market was prior to the financial crisis, according to new research by Susan Wachter of the University of Pennsylvania’s Wharton School.
The Securities and Exchange Commission completed an enforcement action last week against Deutsche Bank Securities and a former head trader at the firm regarding sales of commercial MBS between 2011 and 2015.
Prices for jumbo mortgages softened near the end of 2017 and then markedly improved in the first two months of this year, according to officials at Redwood Trust. “As they often do, market conditions rebounded in January and we took full advantage,” Dashiell Robinson, an executive vice president at Redwood, said this week during the real estate investment trust’s earnings call. The company priced five non-agency mortgage-backed securities in January and February at much better execution ...
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