DBRS was the most active rating service in the non-agency MBS market during the first six months of 2018, according to a new Inside MBS & ABS analysis. DBRS rated 26 non-agency MBS totaling $14.08 billion during the first half of the year, which represented 43.5 percent of total issuance. Its market share was up 4.0 percentage points from 2017. Fitch Ratings grew its market share in rating non-agency MBS, which rose from 31.0 percent last year to ... [Includes two data charts]
Increased competition in the non-qualified mortgage market could reduce interest rates paid by borrowers and slow the sector’s speedy prepayment rates, said S&P Global Ratings. Non-QM loans, the fastest growing segment of the residential MBS market, repay quickly, often within one year of origination. S&P noted the conditional prepayment rate of non-QM loans is about 35 percent, while the rate for non-agency prime jumbos ranges from 5 percent to 15 percent. “The predominant reason to ...
Ongoing challenges in the retail sector are raising questions about the credit implications for some structured finance collateral, though the negative effects on the commercial MBS market appear to be limited due to a strong economy, according to a report by Moody’s Investors Service. The disruption in the U.S. retail sector has been caused by the growth of online shopping, cutthroat competition, over-expansion and inability to adapt to changing consumer demands, the report indicated ...
Most of the major MBS investor groups added to their holdings during the second quarter of 2018, according to a new Inside MBS & ABS analysis. [Includes two data charts.]
The average daily trading volume in agency MBS fell to just $188.4 billion in August, the lowest reading of the year and a possible sign of trouble ahead, according to figures compiled by the Securities Industry and Financial Markets Association.
Ginnie Mae assured the mortgage industry that it would accept so-called VA orphan loans as long as they satisfy the terms of corrective legislation passed by the House Financial Services Committee recently. “As long as the mortgage loan complies with the law, we will accept it and put our guarantee on it,” said an agency spokesperson in response to an Inside FHA/VA Lending inquiry. Ginnie’s assurance provides certainty to a subset of VA loans that have been in limbo since June because they could not be delivered into Ginnie mortgage-backed securities. Lawmakers responded to industry calls for a legislative fix last week by voting overwhelmingly to approve H.R. 6737, the “Protect Affordable Mortgages for Veterans Act of 2018.” Introduced by Rep. Lee Zeldin, R-NY, the bill would eliminate the seasoning requirements in the recently enacted Dodd-Frank Act reform legislation, which conflicted with ...
HUD Nails Florida Company with Discrimination Charge. The Department of Housing and Urban Development charged a Florida company and its owners with housing discrimination for intentionally targeting Hispanic homeowners in a predatory mortgage modification scheme that increased, rather than decreased, their risk of foreclosure. HUD filed charges of discrimination under the Fair Housing Act against Advocate Law Groups of Florida and owners Jon B. Lindeman, Jr., and Ephigenia Lindeman. The defendants allegedly ran a deceptive advertising campaign for loan modification that aired on Spanish-language radio and television throughout Florida. Homeowners were offered $500 gift cards as an enticement to sign for a loan modification. Ginnie Mae MBS Outstanding Increases. Ginnie Mae mortgage-backed securities issuance totaled $38.9 billion in August, raising its ...
Securitizations of residential property assessed clean energy assessments are performing better than projections made by Kroll Bond Rating Agency when issuance started four years ago, according to the rating service. Meanwhile, predicting prepayment rates remains difficult, KBRA noted in a report released late last week.
Rep. Jeb Hensarling, R-TX, released his much-anticipated proposal, the Bipartisan Housing Finance Reform Act of 2018, for housing-finance reform last week but industry observers say it has little or no chance of making any headway. In fact, Hensarling said if reform stalls in this Congress or the next, he would advocate for the administration to tackle reform when a new Federal Housing Finance Agency director is named in January. He released the “discussion draft” the day of a House Financial Services Committee hearing on Sept. 6, the 10-year anniversary of the conservatorship. The bill would transition to a system where qualified mortgages backed by government-approved guarantors with regulated capital can access the...
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