Some $800 million in servicer-advance ABS was issued by New Residential last week, helping to restart activity in the sector. New servicer-advance ABS issuance had stalled due to issues with ratings from Standard & Poor’s, the predominant rating service in the market. The two deals concurrently issued by New Residential followed a $225 million issuance by Ocwen Financial at the end of June. The firms helped end a year-plus long break in the issuance of rated servicer-advance ABS. In April 2014, S&P placed...
Bond and MBS prices held steady this week, but market watchers expect that volatility, in general, will persist on pricing until the Federal Open Market Committee meets later in the month to discuss the fate of short-term interest rates. Deutsche Bank, among others, predicts that the FOMC will call for a rate hike then, but it isn’t entirely certain given China’s financial problems. If China continues to crater, the Fed could hold off. Others are predicting...
Activity in the Home Affordable Refinance Program in the second quarter of 2015 was down 0.3 percent from the first three months of the year, according to new loan-count figures released by the Federal Housing Finance Agency. Fannie Mae had a slight increase in HARP activity and accounted for 59.3 percent of the total for the two government-sponsored enterprises. Freddie Mac volume was down 1.5 percent from the first quarter. HARP volume represented...[Includes one data table]
Legacy-era non-agency MBS litigation continues to be a ripe field of opportunity for U.S. regulators and industry attorneys alike, years after the financial crisis and Great Recession ended, thanks to some key recent judicial rulings. Late last month, Judge Alvin Thompson of the U.S. District Court for the District of Connecticut gave the green light to the Federal Housing Finance Agency to continue to pursue its claims against the Royal Bank of Scotland. The regulator for Fannie Mae and Freddie Mac alleged that RBS provided misleading statements related to $32.1 billion in RMBS the bank sold to the two government-sponsored enterprises between 2005 and 2008. The thrust of the FHFA’s complaint is...
Federal regulators have implemented a number of rules in recent years aimed at moving banks away from a reliance on credit ratings when making investing decisions. Officials at the Federal Deposit Insurance Corp. stress that if a bank’s management doesn’t have comprehensive understanding regarding a security, the bank shouldn’t invest in the MBS or ABS. “The gist of these new requirements is simple: banks should understand the risks associated with the securities they buy and should have reasonable assurance of receiving scheduled payments of principal and interest,” said Robert Hendricks, capital markets policy analyst at the FDIC. In an FDIC report, Hendricks provided...
Of course, there is a way to avoid the zero capital cushion dilemma. Congress can pass legislation to allow the GSEs to build capital or FHFA can act...
Information regarding the $72.11 million non-agency mortgage-backed security from Lone Star Funds’ Colt Funding has been limited, although a document obtained by Inside Nonconforming Markets provides some more details on the deal. COLT 2015-A was the first non-agency MBS to be backed predominantly by non-qualified mortgages. Credit Suisse was the lead manager, and U.S. Bank is the trustee. The MBS was backed by mortgages originated by Caliber Home Loans ...
Unfavorable economics and new regulations appear to have slowed the issuance of jumbo mortgage-backed securities in recent months. New deals from Credit Suisse and Two Harbors Investment suggest that the market could be regaining its legs in September. Mid-way through the third quarter of 2015, only four jumbo MBS had been priced, according to the Inside Mortgage Finance MBS Database. An average of about 11 deals per quarter have been issued in the past year ...
Securitized FHA,VA and rural housing loans in Ginnie Mae mortgage-backed securities totaled $188.5 billion in the first six months of 2015, fueled by significant purchase and refinance activity, according to an Inside FHA/VA Lending analysis of Ginnie Mae data. An estimated $113.4 billion in FHA-insured mortgages were securitized during the first half of the year. Of that total, $60.6 billion were purchase mortgages and $44.2 billion were refinance loans. FHA purchase-loan production increased 58.8 percent in the second quarter from the prior quarter while refi lending jumped 160.8 percent over the same period as FHA’s reduced annual mortgage insurance premium began to take hold. The FHA loans that went into Ginnie MBS showed an average loan-to-value ratio of 92.8 percent and an average debt-to-income ratio of 39.7 percent. Borrowers’ average FICO score was 675.9, which was indicative of ... [ 2 charts ]
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