New issuance of commercial mortgage securities increased substantially during the third quarter, with both the private and agency sectors posting solid gains, according to a new Inside MBS & ABS analysis. A total of $53.14 billion of income properties were securitized during the third quarter, a 33.4 percent increase from the previous period and the strongest three-month output since the second quarter of last year. That brought year-to-date issuance to $137.74 billion, off 12.4 percent from the pace set in the first nine months of 2015, and it would take a huge fourth-quarter surge for the market to reach last year’s total. Non-agency commercial MBS production rose...[Includes one data table]

Allegations in an impending government MBS fraud case against Moody’s Corp. will likely mirror allegations of fraud and misrepresentation in a 2013 civil suit against Standard & Poor’s, according to industry observers. Moody’s disclosed the expected case in a recent filing of third-quarter earnings results with the Securities and Exchange Commission. According to the credit rating agency, lawsuits are likely pending from both the Department of Justice and state attorneys general over ratings of MBS in the years leading up to the financial crisis. In a letter dated Sept. 29, 2016, the DOJ informed...

Single-family rental securitization is increasing as spreads have recovered after sell-offs seen earlier this year, according to analysts. While issuance volume will likely be down this year compared with recent years, various factors point to relatively strong issuance of SFR securities going forward. Through September, $2.70 billion in SFR securities had been issued in 2016, according to commercial MBS data tracked by Inside MBS & ABS. That compares to $7.17 billion for all of last year. While issuance has lagged this year, Ying Shen, a research analyst at Deutsche Bank Securities, said...

Bayview Financial is set to issue the first re-securitization backed by subordinate tranches from risk-sharing deals issued by Fannie Mae and Freddie Mac. Fitch Ratings placed an A-minus rating on the planned $159.60 million Bayview Opportunity Master Fund IVb Trust 2016-CRT1. The transaction is backed by 12 securities from Fannie’s Connecticut Avenue Securities transactions and Freddie’s Structured Agency Credit Risk transactions issued in 2014 and 2015. The securities in the re-securitization are CAS M2 and STACR M3 tranches. All but one of the underlying securities rely...

Late this week or early next, Ginnie Mae is expected to release a new and improved acknowledgement agreement, a move intended to allow nonbanks to borrow more easily against the asset value of their mortgage servicing rights. But the big question remains: Will the agency’s tweaks have much of an impact on liquidity? There is...

Ginnie Mae has announced a policy change to ease investor concern over recent streamlined refinancing trends involving a small number of mortgage loans in Ginnie pools. The policy change addresses the issue of premature streamline refinancing of certain loans in Ginnie Mae I single-issuer pools that threatens to deflate investors’ expectation of a full 100-percent return on their MBS investments. “Investor participation … depends...

Freddie Mac has begun pilot testing its new Dealer Direct system for swapping legacy participation certificates for new single securities with a select group of dealers, the government-sponsored enterprise said in an update issued this week. In transitioning to the single security, Freddie will give all investors in its existing MBS that have a 45-day payment cycle the option to exchange them for the new 55-day securities. That process will be transacted through the Dealer Direct electronic platform. Holders of legacy MBS will work...

Mortgage industry representatives are calling upon the Consumer Financial Protection Bureau to do more to facilitate the correction of errors made under the enhanced disclosure regime of the agency’s integrated disclosure rule, to reduce or eliminate disruptions in the secondary market as well as boost access to credit. The pleas were made in conjunction with the industry’s broader response to the CFPB’s proposed clarifying rulemaking related to its so-called TRID rule, issued under the authority of the Truth in Lending Act and the Real Estate Settlement Procedures Act. In a comment letter sent this week to the bureau, the Consumer Mortgage Coalition urged...

The average daily trading volume of agency MBS hit $223.2 billion in September, the strongest reading of the year and a sign that liquidity in the market has improved. According to figures compiled by the Securities Industry and Financial Markets Association, daily trading volume increased by 17.7 percent compared to the same month a year ago. But the year-to-date averages are much closer: $206.6 billion for 2016 compared to $199.9 billion last year. In the agency space there is...

The jumbo market is dominated by retail lenders to a greater extent than either conventional-conforming production or government-insured lending, according to a new analysis by Inside Nonconforming Markets. A group of 19 top jumbo lenders reported $92.45 billion in jumbo originations through their retail operations during the first half of 2016. That represented 76.8 percent of the $120.37 billion in total jumbo production for the group. The 19 lenders accounted...[Includes one data table]