The pricing disclosures mandated by the Financial Industry Regulatory Authority for ABS have had a mixed impact on the market, according to industry participants, with many claiming that the transparency has reduced liquidity. In June, FINRA started reporting post-trade price information for ABS via the Trade Reporting and Compliance Engine, better known as TRACE. The disclosures include the CUSIP, price and volume, all disclosed within 45 minutes after a trade is made. Actual volume is disclosed for trades below $10 million while trades above that amount are noted as “$10+ million.” The disclosures apply to publically-registered ABS along with deals in the private-placement 144A market. At the ABS East conference held by Information Management Network last week in Miami, Rishi Kapur, a managing director at Babson Capital, said...

The average daily trading volume for agency MBS fell slightly to $187.6 billion in August from the prior month, the second lowest reading of the year, according to figures compiled by the Securities Industry and Financial Markets Association. Lower trading volume indicates that liquidity has been reduced somewhat, but there could be brighter days ahead: the eight-month daily trading average is a bit higher at $200.9 billion and if that figure holds for the rest of the year, it will surpass last’s year’s daily average of $177.9 billion. Then again, $200.9 billion wouldn’t be...

Marketplace lending – otherwise known as peer-to-peer lending – is becoming more of a “thing” for institutional investors, hedge funds, venture capital firms, and even banks these days, but there are plenty of risks lurking in the bushes as well as other operational challenges, according to ratings service analysts. “While marketplace lending has enjoyed increasing growth and acceptance, Standard & Poor’s Ratings Services believes a measured and cautious approach is warranted to properly evaluate this segment, which exhibits unique and heightened risks,” S&P credit analysts Ildiko Szilank and Timothy Bartl wrote in a new report. Among the risks they identified is...

Ginnie Mae President Ted Tozer is urging the FHA to find some flexibility in its loan-level certification proposal that would balance the need to protect the FHA from losses with lenders’ ability to lend without fear of consequences. Tozer said the controversial FHA proposal is trying to find a middle road between protecting the Mutual Mortgage Insurance Fund and making lenders feel confident that they are accountable only for the most egregious problems and not for small oversights or technical errors. “It is...

The FHA will consider stakeholders’ concern about its proposal to terminate a lender’s mortgage insurance contract for missing a yet-to-be-finalized deadline for filing claims, an agency official said. For now, however, the agency remains adamant about letting the provision stand despite stakeholder complaints about its severity, said Ivery Himes, director of the Office of Single Family Asset Management at FHA, during a panel discussion this week at the Ginnie Mae annual conference in Arlington, VA. She said missed deadlines are costly and are putting a strain on the agency’s resources. Himes blamed...

Both of the government-sponsored enterprises are on track to meet the 2015 risk-sharing goals established by the Federal Housing Finance Agency with a quarter of the year to spare. Officials at Fannie Mae, Freddie Mac and the FHFA said the GSEs will continue to work to expand the risk-sharing efforts, which are popular among many investors in the secondary market. At the ABS East conference produced by Information Management Network last week in Miami, Scott Smith, an associate director of capital policy at the FHFA, said he would like to see continued efforts to broaden the investor base for risk-sharing transactions. More than 160 investors have bought...

Freddie Mac reported that its first-time homebuyer business is growing and is on target to match its best year in the space since the beginning of the housing crisis. During the first half of 2015, lenders have delivered an average of 17,000 first-time homebuyer mortgages per month to the government-sponsored enterprise. That’s roughly the pace for last year but 25 percent higher than in 2013. Overall, the National Association of Realtors said...[Includes one data table]

The supply of home mortgage debt outstanding started growing again during the second quarter of 2015, thanks to relatively strong growth in retained portfolios, according to an Inside Mortgage Finance analysis of new data from the Federal Reserve and other sources. The Fed reported late last week that $9.901 trillion of single-family mortgage debt was outstanding as of the end of June. That was up 0.4 percent from March and represented the biggest supply of mortgage servicing since the third quarter of 2013. The servicing market had been shrinking...[Includes two data tables]

The nation’s subservicing specialists increased their contracts by a modest 4.4 percent on a sequential basis in the second quarter of 2015, a sign that many originators would rather outsource the nitty-gritty chore of loan processing to others instead of doing it in house. Compared to the same period a year earlier, subservicing grew a more impressive 20.5 percent to $1.410 trillion, according to exclusive survey figures compiled by Inside Mortgage Finance. The increasing complexity and compliance cost of servicing make...[Includes one data table]

“It’s amazing that we’re talking about this seven years after the financial crisis,” said Bob Behal, a principal and co-head of ABS/commercial MBS Investments at Vanguard Group, during this week’s ABS East conference in Miami. He was referring to the practice of rating shopping, which is a current practice, particularly in the commercial MBS market, according to a number of industry participants. A panel regarding reforms for the rating services and due diligence providers attracted a standing-room audience at the conference produced by Information Management Network. The conference was...