Agency single-family MBS issuance rose 2.8 percent in February on the back of a huge increase in securitization of seasoned home loans at Freddie Mac, according to a new Inside MBS & ABS ranking and analysis of loan-level MBS data. Fannie Mae MBS issuance fell 3.2 percent from January to February, and Ginnie Mae production was down 12.8 percent. But Freddie Mac issuance jumped by $7.05 billion from January’s level, a gain of 30.8 percent in a month. Freddie securitized...[Includes two data charts]
With the ink still wet on a $2.6 billion settlement agreement reached in principle with the Department of Justice late last month, Morgan Stanley is apparently in discussion with New York Attorney General Eric Schneiderman to avert another potential MBS lawsuit. In a recent regulatory filing, the investment bank disclosed that the New York AG Office, also a member of the presidential RMBS Working Group that brought the previous MBS lawsuit against the firm, indicated its intention to file a similar lawsuit. The lawsuit is related to approximately 30 subprime securitizations sponsored by Morgan, the AG wrote in a Jan. 13 notice to the bank. The suit would allege...
Nationstar Mortgage has filed a $1 billion shelf registration with the Securities and Exchange Commission, signaling its intention to sell debt securities and other instruments to the general public. But whether the lender/servicer actually uses the shelf is another matter entirely. “The mixed shelf is the company’s first amendment or filing of a new registration statement since May 2013,” noted analyst Kevin Barker of Compass Point Research & Trading. A mixed shelf means Nationstar could issue debt, preferred and common stock, as well as depository shares and warrants. Interestingly, the filing came...
Mortgage real estate investment trusts increased their holdings of residential MBS by 2.9 percent during the fourth quarter of 2014, according to data compiled by Inside MBS & ABS. Sixteen publicly-traded mortgage REITs reported a fair market value of $282.62 billion for their aggregate MBS holdings as of the end of 2014. That was up 6.7 percent from a year earlier. After diversifying into mortgage-servicing rights, risk-share transactions with the government-sponsored enterprises and other strategies, mortgage REITs are looking...[Includes one data chart]
One popular strategy among investors trying to profit from the woes of Ocwen Financial is to purchase subprime MBS tranches being serviced by the company and then declare a “material breach” in its servicing covenants. Speculators have been doing this while selling short Ocwen’s stock. According to analysts and investors familiar with the strategy – which is being employed by a fund called BlueMountain (and others) – subprime tranches can be bought at deep discounts. A material breach can occur when a rating agency downgrades the servicer, in this case Ocwen. For several weeks in January and February when Ocwen’s shares were plunging to new lows, it appeared...
Fannie Mae and Freddie Mac should move more quickly and expand key initiatives that are laying the groundwork for mortgage-finance reform, according to a Treasury Department official. In remarks prepared for an industry conference this week, Michael Stegman suggested the government-sponsored enterprises should expand their risk-transfer activities and open up the development of the common securitization platform to non-agency participants. “The near-term CSP initiative would not succeed...
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