Since the end of December, at least $7.4 billion in seasoned mortgages have been securitized through Fannie Mae and Freddie Mac, a trend that appears to be gaining steam, especially among small- to medium-sized lenders. In early April, Inside MBS & ABS reported that Bank of America contributed $5.4 billion of seasoned loans (three months or older) to Freddie Mac MBS, which helped make the bank Freddie’s largest seller in the first quarter. A follow-up inquiry to BofA yielded...
A total of $49.55 billion of commercial mortgages were securitized during the first quarter of 2015, virtually unchanged from the fourth quarter of last year, according to a new Inside MBS & ABS analysis. But the private CMBS market recorded a significant increase in new issuance. Non-agency CMBS production climbed 31.3 percent from the fourth quarter to hit $30.91 billion, the second-highest three-month output since the financial crisis shut down new issuance in the second quarter of 2008. Compared to the first quarter of 2014, new issuance was up 74.3 percent. The jump in private CMBS issuance helped offset...[Includes one data chart]
To attract large investors, the Treasury Department suggests that non-agency MBS include a deal agent with a fiduciary duty. “Under corporate law, directors must discharge two primary fiduciary duties: duty of care and duty of loyalty,” said Michael Stegman, counselor to the Treasury on housing finance policy, in a speech late last week. “In the context of private-label securitizations, these duties seemed sensible and logical to us.” He used...
New capital requirements for private mortgage insurers are a positive for the industry and should not cause a big change in MI premiums, high loan-to-value prepayments or net issuance of conventional MBS, according to a new analysis from Barclays Research. The reason for analysts’ optimism is that the effective rate for conventional conforming mortgages with private MI has been more attractive than on an FHA loan for borrowers with FICO scores above 700 and original LTVs of 80-95 percent. The opposite has been true for borrowers with low FICO scores. Consequently, issuance of conventional loans over the past year has largely favored...
New lenders that specialize in loans that don’t meet the government’s qualified-mortgage standards continue to draw up blueprints and raise capital – or at least try to – but very few of them are banking on securitization as a take-out strategy. However, all that may change with the launch of LendSure Financial Services, a San Diego startup headed by a handful of veterans from the subprime industry of yesteryear, including Jim Konrath, Stu Marvin and Joe Lydon. According to one non-agency investor briefed on LendSure’s plans, securitization is...
A foreclosure case involving a mortgage pooled in a 2007 non-agency MBS has prompted competing amicus briefs from the Structured Finance Industry Group and California’s attorney general, among others. Yvanova v. New Century Mortgage is under consideration by California’s Supreme Court. The case hinges on whether a borrower can challenge a foreclosure based on a pooling and servicing agreement. The lower court previously ruled in favor of the lender, New Century Mortgage. “SFIG is...
While jumbo MBS issued in recent years have performed exceptionally well, some senior-support bonds on new jumbo MBS have credit risks similar to what was experienced during the financial crisis, according to analysts at Andrew Davidson & Co. In a recent analysis, Richard Ellson and Allison Ying raised concerns about the super-senior structures that have become common on jumbo MBS in recent years. They noted that when Redwood Trust started working to revive jumbo MBS issuance in 2010, the issuer used a much simpler structure. However, in the past few years, Redwood and many other issuers have increasingly used...
The timing of any hike in interest rates from the U.S. central bank has grown more uncertain in recent weeks, amid signs of significantly slower economic growth – a reality that was reflected in the Federal Reserve Open Market Committee reaffirming the status quo after its two-day meeting in Washington, DC, concluded mid-week. Hours before the FOMC’s statement was released, the Commerce Department announced that first-quarter gross domestic product slowed to a crawl of just 0.2 percent, compared with a 2.2 percent increase in the fourth quarter. “Information received since the FOMC met in March suggests...
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