Calvin Wong of Morningstar noted that rating shopping is most obvious in the commercial MBS market

The agency single-family MBS market posted its best quarter in a year as total issuance climbed to $267.33 billion during the third quarter of 2014, according to a new Inside MBS & ABS analysis and ranking. The combined MBS issuance of Fannie Mae, Freddie Mac and Ginnie Mae rose 6.6 percent from the second quarter of 2014, hitting its strongest level since the third quarter of last year. On a year-to-date basis, agency MBS remained 48.7 percent below the pace set in the first nine months of 2013. Even the long-suffering non-agency MBS market showed...[Includes two data charts]

“Rating shopping is alive and well,” Calvin Wong, chief credit officer at Morningstar Credit Ratings, said last week at the ABS East conference in Miami Beach. The Securities and Exchange Commission recently released a rule setting new requirements for the rating services, but Wong warned that the SEC hasn’t done enough to address the issue. He said...

The market for non-agency MBS backed by nonperforming and re-performing home loans has grown exponentially in recent years. However, the sector remains relatively small and regulatory concerns persist regarding servicing practices. At the ABS East conference produced by Information Management Network last week in Miami Beach, Susan Valenti, a director at Wells Fargo Securities, said $1.0 billion of non-agency MBS backed by nonperforming loans and re-performing loans was issued in 2011, followed by $2.0 billion of such issuance in 2012, $5.7 billion in issuance in 2013 and $5.2 billion in issuance thus far in 2014. Most of the deals aren’t...

A recent audit conducted by the Inspector General of the Department of Housing and Urban Development found that servicers earned roughly $428 million over a 19-month period by securitizing modified FHA loans in Ginnie Mae MBS. The way the IG sees it, those profits should go to the FHA’s Mutual Mortgage Insurance Fund, which has been below statutorily required levels for several years. At the very least, the IG wants FHA to reduce the $750 per loan incentive payment the agency provides servicers for loan modifications. “FHA does not have...[Includes one data chart]

Industry experts vary on the question of whether Fannie Mae and Freddie Mac should change their MBS guaranty pricing, but most agree that the Federal Housing Finance Agency should proceed cautiously and deliberately. At the same time, most industry comment letters on the subject agree that more needs to be done to revive the non-agency market. The Securities Industry and Financial Markets Association warned...

Skyline Lending is ready to roll out a new non-agency product and plans to place the loans in what the company calls a “structured holding cell.”

Ginnie Mae this week updated investors on recent changes to loan-level disclosures for existing, active single-family MBS as well as future enhancements. Agency officials said investors will be getting additional loan-level and pool-level disclosures over the next couple of months. For example, Ginnie will soon start a record of pool transfer activity, which would include immediate transfers as well as regular transfers of MBS pools. The new pool transfer record will be...

According to one deal-maker, after a merger, anywhere between 30 percent to 40 percent of a company’s LOs might choose to leave.

Between now and yearend, it should be a seller’s market for mortgage servicing rights, as long as the seller isn’t trying to unload legacy or “high-touch” product. Legacy deals – at least large ones – continue to be a non-entity in the market as buyers are focusing on smaller MSR packages tied to relatively new originations. One recent legacy deal that was scuttled entailed the sale of roughly $800 million in Ginnie Mae MSRs by Ocwen Financial. Industry advisors familiar with the situation aren’t sure why ...