Rating services appear to be taking differing approaches to rating nonprime MBS backed by new originations. The first nonprime MBS from an affiliate of Invictus Capital Partners received preliminary AAA ratings from Kroll Bond Rating Agency, Morningstar Credit Ratings and S&P Global Ratings. Those three firms did not rate...
Wall Street giant The Blackstone Group this week revealed its investment in “fix and flip” lenders B2R Finance, Charlotte, and Jordan Capital Finance, Chicago, spurring talk that eventually the firm may enter the fledgling nonprime residential market. One nonprime executive, requesting anonymity, told Inside MBS & ABS that he has had several discussions with Blackstone-related companies about partnering with his shop. Issuing MBS is one of the company’s goals, he said, adding: “They want in.” Over the past three years, Blackstone has made...
Freddie Mac reported a net income of $4.85 billion in the fourth quarter, more than double its earnings from the previous quarter and lifting its full-year income to $7.82 billion. The government-sponsored enterprise released its earnings this week, posting one of its best profits ever in the fourth quarter. Net income for the quarter was fueled in part by gains on derivatives which amounted to $6.38 billion. “Interest rates went up an unusually large amount in the fourth quarter, therefore you saw an unusually large gain in the accounting,” Freddie CEO Donald Layton told Inside MBS & ABS. Freddie also reported...
Now that investment banker Steven Mnuchin has been installed as the Treasury secretary, work can begin on finding a solution to Fannie Mae and Freddie Mac, the giant government guarantors that serve as the linchpin to housing and mortgage markets. For the most part, senior mortgage officials who have been in the business for a decade or more applauded President Trump’s choice of Mnuchin, pointing to his days as the head of MBS trading at Goldman Sachs & Co. “At the very least, this is...
Weighing in on President Trump’s recent executive order related to the Dodd-Frank Act, analysts at Moody’s Investors Service said ditching the major mortgage regulations promulgated under the law would be negative for residential MBS unless it’s done carefully. “Any significant repeal of the Dodd-Frank Act’s mortgage-related provisions without effective alternatives would weaken residential RMBS credit quality because these provisions have strengthened the credit quality of mortgage originations, improved servicing practices and bolstered the credit integrity of RMBS structures,” the analysts said in a new report issued earlier this week. Their report then detailed...
The chatter about the Federal Reserve shrinking its massive $4.5 trillion balance sheet and its huge $1.7 trillion portfolio of agency MBS has continued in recent days, with one Fed official talking up the idea and another describing how the U.S. central bank plans to do it. Federal Reserve Bank of St. Louis President James Bullard said in a speech last week that the Fed could begin normalizing its balance sheet. “The Fed’s balance sheet has been an important monetary policy tool during the period of near-zero policy rates,” Bullard said. Thus far, the Fed’s Open Market Committee has not set...
JPMorgan Chase is preparing to issue another large non-agency mortgage-backed security, but the deal includes some significant differences compared with the two large portfolio risk-transfer MBS the bank issued last year. The biggest change is that Chase appears to be planning to sell most of the MBS to investors. On the two large portfolio risk-transfer MBS that Chase issued in 2016, the bank retained about 90.0 percent of the issuance. At the time, Chase officials cited ...
The first nonprime mortgage-backed security from an affiliate of Invictus Capital Partners will be stocked with loans that have some unique features. Kroll Bond Rating Agency, Morningstar Credit Ratings and S&P Global Ratings placed preliminary AAA ratings on the deal last week. The planned $145.02 million Verus Securitization Trust 2017-1 differs in a number of ways from the $225.75 million COLT 2016-3 Mortgage Loan Trust, the nonprime MBS from an affiliate of Lone Star Funds ...
An affiliate of Galton Funding is preparing to issue a non-agency mortgage-backed security that will include non-qualified mortgages, according to documents filed with the Securities and Exchange Commission. Galton Funding acquires mortgages on a correspondent basis. The firm is part of Galton Capital Group, which is the residential mortgage investment group within Mariner Investment Group. Mariner is a New York-based investment advisor that manages about ...
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