Entities growing their purchase mortgage and MBS portfolios may be affected by a new accounting model for recognizing credit impairment, the second leg of the Financial Accounting Standards Board’s long-term financial instruments project. The Mortgage Bankers Association expects a release date either towards the end of the first quarter of 2016 or in the second quarter, barring unforeseen changes. “I have not seen transition rules exposed yet, but I suspect that there will be ...

Interest in the single-family rental market has increased since being introduced as a viable asset classes several years ago, but some say further growth may depend on the sector’s ability to significantly improve operating efficiencies. There have been 27 single-family rental securitizations to date. In 2015, issuance of single-family rental deals was $6.72 billion, up from $6.61 billion a year earlier, according to Morningstar Credit Ratings. Although capital expenses were higher than ...

A new statutory exemption for private resales of ABS and MBS imposes certain requirements that issuers may find difficult to meet, according to securities compliance experts. The provision is part of the “Fixing America’s Surface Transportation Act” (FAST Act), which President Obama signed on Dec. 4, 2015. Although aimed primarily at authorizing spending on highway and transit projects, the new law includes several provisions intended, among other things, to facilitate ...

Legacy non-agency MBS issued before the financial market collapse in 2008 continue to spawn millions in lawsuits. In the Southern District of New York, Commerzbank AG, as an RMBS investor, recently sued Deutsche Bank, HSBC, Wells Fargo and the Bank of New York Mellon in their capacities as MBS trustees on deals that inflicted approximately $1.88 billion in losses on the German bank. Commerzbank claimed it suffered $750 million in losses related to BNYM’s alleged failures ...

The non-agency mortgage-backed security market could be revived this year by economic factors rather than efforts by Congress or industry participants, according to analysts. The non-agency share of mortgage originations has been relatively strong in recent years, but the loans were largely held in bank portfolios instead of included in non-agency MBS. Legislative reform of the government-sponsored enterprises and potential incentives for non-agency MBS issuance look ...

The Federal Housing Finance Agency published a final rule this week that will prevent real estate investment trusts from gaining access to financing from the Federal Home Loan Bank system via captive insurance companies. REITs are not allowed direct membership in an FHLBank. However, in recent years a number of REITs have formed captive insurance companies that were granted FHLBank membership because insurance companies were allowed to ...

Officials at the Federal Housing Finance Agency provided some advice to real estate investment trusts along with the announcement this week that REITs will lose their access to funding from Federal Home Loan Banks: ask Congress to make some changes. “Congress has amended the Federal Home Loan Bank Act in the past to allow additional entities to become members of a Federal Home Loan Bank and it can certainly do so again if it wants some of these entities to ...

Issuers of jumbo mortgage-backed securities stuck with plain vanilla mortgages in 2015, according to a new analysis by Inside Nonconforming Markets. Meanwhile, a wide variety of lenders contributed to jumbo MBS last year, with only one bank accounting for an outsized share of contributions. First Republic Bank was the top originator of jumbo mortgages that were securitized in 2015, accounting for nearly 20 percent of all jumbo MBS issuance ... [Includes two data charts]

The performance risks posed by a new breed of alternative-documentation mortgages are likely much lower than the mayhem caused by reduced-documentation mortgages originated before the financial crisis, according to Moody’s Investors Service. While most lenders verify the borrower’s income and assets used to qualify for mortgages, some non-agency lenders are willing to originate loans with less than full documentation. Lenders allowing for alt-doc underwriting typically ...

The most active issuer of jumbo mortgage-backed securities in 2015, based on the number of deals sold, is set to issue the first jumbo MBS of the year. Two Harbors Investment is preparing a $304.75 million deal, according to presale reports. A presale report from Standard & Poor’s on the deal on Jan. 4 ended a span of 31 days without a presale report for a new jumbo MBS. Fitch Ratings published a presale report on the same deal the following day. The deal will mark the first ...