Redwood Trust late last week reported net income of $40.0 million for the third quarter of 2012, including $3.0 million in net gains on the $372.0 million of non-agency MBS issuance and whole loan sales the real estate investment trust completed during the period. Redwood officials said the company is well-positioned for growth in non-agency MBS issuance, commercial MBS issuance and soon agency origination activity. In a quarterly review, company officials noted that some have called the REIT crazy for resuming issuance of non-agency MBS after the financial crisis of 2007. Redwood has issued eight non-agency MBS since April 2010 totaling $2.6 billion. The REIT said...
A task force of state insurance regulators has agreed to require insurers to set aside additional capital to cover risks tied to residential and commercial MBS in an effort to buffer the industry from losses in the event of a severe downturn. The National Association of Insurance Commissioners Valuation of Securities Task Force voted 11-2 to support a proposed increase in the NAICs capital requirements for U.S. life insurers. The change in capital requirements is driven by year-end NAIC modeling assumptions related to RMBS and CMBS. The change raises...
The ACLU is calling for changes to federal anti-discrimination statutes to deter secondary mortgage market participants from engaging in business practices that might have a discriminatory impact on certain protected classes of borrowers. In a recent analysis of mortgage foreclosures, the ACLU said the origination and securitization of subprime and other high-risk mortgage products have hurt minority families and caused the loss of 3.5 million homes to foreclosure. The ACLU believes...
The return of non-agency MBS for prime loans is a lot further along than market observers might think, officials at Redwood Trust said last week. The company said its goal is to issue $900 million or more in non-agency MBS each quarter within the next 12-to-18 months and eventually finance mortgages for prime borrowers who do not fit into todays tight credit box. Through 10 months in 2012, Redwood averaged $498.31 million in quarterly non-agency MBS issuance, according to the Inside Mortgage Finance ...
The Securities and Exchange Commission has been quietly meeting with investors in non-agency mortgage-backed securities looking for leads to bring regulatory actions. Reaction from investors to the SECs outreach has been decidedly mixed, though Reid Muoio, a deputy for the SECs structured and new products unit, said the SEC is working to improve regulation on behalf of investors. Speaking at the recent ABS East conference sponsored by Information Management Network in Miami, Muoio detailed an SEC outreach program that was apparently previously undisclosed. He said that a ...
Investors interested in buying new non-agency mortgage-backed securities suggest that the wide variety seen in the pooling and servicing agreements and reporting of vintage non-agency MBS is insufficient. Many investors at the recent ABS East conference in Miami sponsored by Information Management Network called for standardization. Investors clearly welcome standardization, said Dapeng Hu, a managing director at BlackRock, which manages more than $150.0 billion in MBS investments ...
Underwriting standards for subprime mortgages and borrower demand for such loans remained unchanged in the third quarter of 2012 compared with the previous quarter, according to the Federal Reserves senior loan-officer opinion survey on bank lending practices. While 64 banks surveyed reported offering prime mortgages, only four reported offering subprime mortgages and 23 reported offering nontraditional mortgages. Underwriting and demand for nontraditional mortgages ... [Includes two briefs]
The volume of loans guaranteed by the Department of Veterans Affairs rose 4.0 percent in the third quarter of 2012, reflecting an upward trend that the agency attributes to strong underwriting. A production increased to $33.3 billion from $32.0 billion in the second quarter and $28.3 billion in the first quarter. The agency reported $93.6 billion in total originations over the nine-month period, with refinancing accounting for 51.8 percent of guaranteed loans. VA has had the best performing loans in the industry for quite some time, with the ... [1 chart]
Fannie Mae and Freddie Mac this week reported a combined $4.74 billion in net income during the third quarter, as the two government-sponsored enterprises avoided taking further draws from the Treasury Department by staying in positive earnings territory. The GSEs combined third-quarter income was down 41.7 percent from the previous three-month period, mostly because Fannies net income fell 64.6 percent from second-quarter earnings that were pumped up by a $3.04 billion recorded benefit on credit losses. Fannies $1.81 billion in third-quarter net income was much more in line with the $2.72 billion it earned in the first three months of the year, as well as Freddies recent performance. Freddie reported...
The three-month surge in agency MBS issuance appeared to run out of steam in October, as total agency securitization of single-family mortgages dropped 11.4 percent from the previous month, according to a new market analysis and ranking by Inside MBS & ABS. The sharpest decline was in Fannie Mae issuance. The government-sponsored enterprise cranked out $58.92 billion in single-family MBS last month, down 28.4 percent from Septembers volume. It marked the lowest monthly production for Fannie since April, when the GSE issued just $46.12 billion in volume. Securitization activity at Freddie Mac was...