Tricon American Homes is set to issue the first rated single-family rental securitization to include a voluntary property-substitution provision for the life of the transaction. The provision provides the issuer with flexibility to manage its overall portfolio, but rating services cautioned that the feature could have negative implications for investors. The planned Tricon American Homes 2017-SFR1 is collateralized by a $498.60 million fixed-rate loan secured by mortgages on 3,480 single-family rentals. The deal received preliminary AAA ratings from Kroll Bond Rating Agency, Moody’s Investors Service and Morningstar Credit Ratings. KBRA noted...
In the first half of 2017, the dollar volume of credit card ABS issued was nearly three times the issuance seen in the first half of last year. However, analysts at Fitch Ratings suggest that issuers of consumer finance ABS aren’t relying too heavily on the structured finance market for their funding. The rating service said increased issuance of ABS could affect some issuers’ credit profiles if it leads to a sustained increase in secured wholesale funding sources. “However, we believe that this trend does not yet represent a structural shift, with many consumer finance-oriented financial institutions raising consumer ABS issuance opportunistically to take advantage of attractive pricing and to enhance the liquidity of their ABS programs,” the rating service said. Some $24.38 billion of credit card ABS were issued...
The proposed $4.3 billion merger of single-family rental operators Invitation Homes and Starwood Waypoint Homes will create a corporate landlord with 82,000 homes – and a behemoth of a potential client for Fannie Mae and possibly Freddie Mac. Earlier this year, Fannie agreed to provide Invitation Homes with $1 billion in financing. The deal broke new ground for the government-sponsored enterprise, but it also raised questions about whether a government-owned entity that received billions in taxpayer assistance should be lending money to a company (Invitation Homes) grubstaked by Wall Street. Since the Invitation-Fannie arrangement was unveiled, no other significant SFR financing vehicles involving a GSE has...
August is turning out to be an unfortunate month for WMC Mortgage and Deutsche Bank in terms of continuing legacy MBS litigation, but an auspicious one for Bank of New York Mellon, which won a favorable verdict in a residential MBS case. On Aug. 8, Judge Charles Haight of the U.S. District Court for the District of Connecticut denied defendant WMC Mortgage’s motion for partial summary judgment in Law Debenture Trust Co. of New York v. WMC Mortgage. The case involves a pool of 5,162 residential loans originated by WMC which were securitized in 2006 and sold to the trust for $1 billion, according to the law firm Orrick. The lender was...
Attorneys for Fairholme Funds filed another motion this week requesting to view about 1,500 government documents in a lawsuit challenging the government’s net-worth sweep of profits at Fannie Mae and Freddie Mac. And late last week, the government produced three more documents that were originally classified as “privileged.” In the new motion, the Fairholme attorneys asked the Federal Claims Court to use the “quick peek” procedure for more than 1,000 documents dating back to May 2012. These are among the many documents the plaintiffs say the government is still withholding under the deliberative process and bank examination privileges. It’s...
The Federal Reserve this week released the minutes of the July meeting of its Open Market Committee, providing more detail and color regarding the central bank’s deliberations on shrinking its enormous holdings of agency MBS and the future path and timing of interest rate adjustments. FOMC members started their portfolio deliberations by discussing the appropriate time to start reducing the Fed’s securities holdings, a plan that had been formally announced in June. “Participants generally agreed that, in light of their current assessment of economic conditions and the outlook, it was appropriate to signal that implementation of the program likely would begin relatively soon, absent significant adverse developments in the economy or in financial markets,” according to the minutes. Many members of the committee noted...
According to our calculation, Fannie common now trades at $2.80, a 20.17 percent improvement since the close of 2Q17, while Freddie’s value rose 21.08 percent to $2.70.
Officials at Starwood Property Trust announced last week that the company will acquire non-qualified mortgages with funding provided by new membership in the Federal Home Loan Bank system. Starwood is a real estate investment trust that has traditionally focused on commercial mortgages. Starwood said it gained membership in the FHLBank of Chicago shortly after the end of the second quarter of 2017. Jeffrey DiModica, president of Starwood, said the REIT will ...
JPMorgan Chase and Redwood Trust are set to continue their regular issuance of non-agency mortgage-backed securities, with deals scheduled to close on Aug. 30. The planned JPMorgan Mortgage Trust 2017-3 is a $1.02 billion deal, while Sequoia Mortgage Trust 2017-6 is sized at $355.4 million. Both of the MBS are predominantly backed by non-agency jumbo mortgages along with some loans eligible for sale to the government-sponsored enterprises. Rating services ...
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