Mortgage-backed securities production by the top Ginnie Mae issuers in the third quarter of 2012 slipped but not by enough to offset the 32.1 percent gain on a year-over-year basis, according to an Inside FHA Lending analysis of Ginnie Mae data. Ginnie Mae MBS issuance fell by a mere 0.1 percent from the second quarter, a hiccup that would have been easily cured had any of the top five issuers posted even a modest gain. All five issuers saw their issuances fall during the quarter. The top issuers reported a total of $100.57 billion in MBS sold to investors at the end of the third quarter, down from $100.62 billion the previous quarter. The slip disrupted an ...
Participants in collateralized loan obligation deals remain optimistic about the future of the market although they caution that macroeconomic issues might still derail the products slow return. In a panel discussion hosted by Standard & Poors last week, CLO market executives maintained a positive outlook for CLO performance as the market experienced a resurgence early this year. The market collapsed after the financial crisis but has apparently been resuscitated by investors hungry for high-risk, high-return securities. CLOs acquire...
Delinquencies on non-agency MBS will likely increase temporarily due to Hurricane Sandy, according to industry analysts, but long-term losses due to the storm are expected to be minimal. Insurance will play a key factor in overall losses, and estimates vary significantly on the extent of coverage in the affected areas. Moodys Investors Service projected this week that non-agency MBS are unlikely to suffer material losses due to Sandy even though the affiliated Moodys Analytics estimated the damage to residential housing from the storm will hit $10.5 billion. Even if damages exceed...
New pool level data issued by Ginnie Mae reveal a rising share of FHA-insured loans that have refinanced with grandfathered mortgage insurance premiums (MIP) in new Ginnie Mae mortgage-backed securities issuances, according to analysts. Of particular interest to investors is the share of borrowers with existing FHA-insured home loans who took advantage of an opportunity to refinance on advantageous terms under the FHA Streamline Refinance program, said analysts at Bank of America Merrill Lynch. Under the revised rules of the FHA Streamline Refi program, FHA-insured mortgages endorsed before June 1, 2009, were ...
Optimism in the non-agency MBS markets recent extraordinary performance continues as investors look beyond legacy MBS to new transactions, such as Redwood Trusts Sequoia jumbo securitizations, according to analysts. A recent analysis by Bank of America Merrill Lynch expects lower-yielding asset classes to push investors toward the non-agency MBS sector, where volumes are expected to remain at healthy levels for the rest of 2012. Analysts, however, noted...
Fixed-rate mortgages comprised most of Augusts FHA production, which totaled $22.1 billion, up 13.2 percent from July and 37.9 percent from a year ago, according to an Inside FHA Lending analysis of FHA data. FRMs accounted for 98.9 percent of new loans with FHA insurance in August. In-house originations made up 79.6 percent of new endorsements while purchase loans accounted for 56.1 percent of FHA originations during the month. Wells Fargo is the only top FHA lender to exceed the billion-dollar mark. In fact, the bank reported $2.2 billion in new FHA originations, 76.0 percent of which were produced in-house. The purchase mortgage share of Wells total FHA originations was ... [2 charts]
Top-tier, highly liquid consumer ABS are still attractive investments in todays market, owing to strong technical factors and solid fundamentals, according to Barclays Capital. Traditional consumer ABS continue to enjoy status as a safe haven asset class, especially in times of broader market volatility, and are an excellent cash surrogate for investors looking to put excess cash to work, wrote research analyst Joseph Astorina, who cited the sectors stable cash flow and ratings profiles, as well as consistent excess returns over swaps and Treasuries. In addition, this sector is...
A recent Congressional report confirms theres been a jump in the drop-out rates for students at for-profit colleges, and thats bad news for investors in the securitizations backed by loans to these students, according to market analysts. A two-year investigation by the Senate Committee on Health, Education, Labor and Pensions demonstrated that federal taxpayers are investing billions of dollars a year $32 billion in the most recent year in companies that operate for-profit colleges, said a report by the committee. Yet, more than half of the students who enrolled in those colleges in 2008-09 left without a degree or diploma within a median of four months. That compares with 46 percent in a study by the Department of Education of a 2003-04 cohort, which itself reflected...
Chicago, Suffolk County, NY, and Berkley, CA, have joined the ranks of local governments considering the controversial notion of using eminent domain to seize performing underwater mortgages, restructure their terms and repackage them for sale to other private investors. Given the size of the foreclosure epidemic in Chicago, the city should explore every possible avenue to keep families in their homes and reduce the number of vacant properties that breed crime and erode the stability of our neighborhoods, Alderman Edward Burke, chairman of the citys finance committee, said last week. In March 2012, nearly 667,000 Chicago-area homeowners were...
Stop advance rates by servicers of non-agency MBS are more than double industry estimates, based on new data from CoreLogics LoanPerformance. Analysts at Barclays Capital said the data also allow calculation of loan-level stop advance rates on non-amortizing loans for the first time. LoanPerformance recently started reporting loan-level stop advance data on approximately 700 non-agency MBS, about 13.0 percent of active deals, according to Barclays. While CoreLogic said the trustee-submitted data will be reported without reference to the specific servicer, Barclays determined that the data are primarily limited to deals by Countrywide Financial and Washington Mutual. Stop advance rates in recent months on the Countrywide-serviced deals range...