The single-family rental securitization business is fueling investor purchases of homes and causing problems for communities, according to a new survey and report by consumer advocates. The California Reinvestment Coalition called for a number of reforms for the single-family rental industry. “This conduct has had a measurable, negative impact on communities,” the CRC said. “It has transferred wealth from homeowners to Wall Street denizens and is transforming America from a homeownership society to a renter-ship society.” The CRC based...

Investor appetite for insurance risk continues to outstrip demand, prompting an increase in catastrophe bonds among other insurance-linked securities, according to industry analysts. Late last week, Fitch Ratings assigned a BB rating to a $200 million catastrophe bond that will provide re-insurance protection to Hannover Ruck for exposure to earthquakes in California. The deal will push U.S.-related issuance of catastrophe bonds to $3.86 billion in 2015, according to Artemis, a firm that tracks issuance of the bonds. A record volume of catastrophe bonds was issued...

Although the big three rating agencies have had a strong hold on rating commercial MBS for most institutional investors, the tides may be changing as bond buyers begin to relax their guidelines. Some of the largest bond buyers have been vocalizing frustration that the big three ratings firms, Moody’s Investors Service, Standard & Poors and Fitch Ratings, are being hired less, resulting in fewer bond offerings to choose from, according to a recent Bloomberg article. That’s good news for smaller ratings agencies like Kroll Bond and Morningstar. “We have proven...

Downgrades by Standard & Poor’s to numerous servicer ratings for Ocwen Financial could have a significant impact on the nonbank’s servicing operations. The rating service downgraded servicer ratings for Ocwen to “below average” last week, citing continued scrutiny by investors and regulators along with concerns about internal audits at Ocwen. As of the end of the first quarter of 2015, approximately 700 of the 4,100 non-agency servicing agreements handled by Ocwen had criteria regarding minimum servicer ratings ...

A new feature Redwood Trust has included in its two most recent jumbo mortgage-backed securities has prompted support from AAA investors along with mixed reactions from rating services. The $356.45 million Sequoia Mortgage Trust 2015-2 issued in April and the $343.21 million Sequoia Mortgage Trust 2015-3 that was issued this week included a unique stop-advance feature. Servicers of the loans won’t be allowed to provide advances of principal and interest on loans that are 120+ days delinquent. The jumbo MBS were rated by Kroll Bond Rating Agency and Moody’s Investors Service ...

With issuance of non-agency mortgage-backed securities unable to keep pace with disappearing volume from vintage deals, bank and thrift holdings of non-agency MBS continue to decline. The holdings were down somewhat more than usual in the first quarter of 2015, suggesting sales by some banks. Banks and thrifts held $111.48 billion in non-agency MBS as of the end of the first quarter of 2015, according to the Inside Mortgage Finance Bank Mortgage Database. The holdings declined by 16.1 percent compared with the first quarter of 2014, including an 11.0 percent decline compared with the fourth quarter of 2014 ... [Includes one data table.]

The sale of RoundPoint Mortgage Servicing has fallen apart with the bidder walking away from the table, according to industry advisors close to the transaction. Sources indicate that Tavistock Group, the owner of the nation’s 24th largest servicer, still has an interest in finding a buyer for the servicer/lender, but for now no deal is imminent. Tavistock bills itself as an international private-equity firm with a strong interest in finance, real estate and other sectors. The firm is headquartered in the Bahamas. An advisor close to the transaction declined...

A ruling late last week by the New York Court of Appeals will likely help provide certainty to non-agency MBS issuers regarding liability from breaches of representations and warranties while limiting claims from investors. The appeals court confirmed a lower court’s ruling in ACE Securities v. DB Structured Products, determining that the statute of limitations for claims of breaches of representations and warranties starts when a deal is closed – not when a potential breach is discovered. “Representations and warranties concern...

Most participants on the Federal Open Market Committee anticipate an increase in interest rates sometime later this year, and not delaying until 2016, the FOMC indicated after its two-day meeting concluded Wednesday afternoon. Meanwhile, the Fed’s support of the housing market through reinvesting in MBS continues as it has, with no change in the U.S. central bank’s thinking when it comes to the management of its balance sheet. “The committee reaffirmed...

Lenders are accounting for an increasing share of home purchase financing as investors decrease their largely cash buying. Purchases by first-time homebuyers are rising, helped by FHA financing. “First-time homebuyers rarely buy homes with cash and with their increasing participation in the housing market, we expectedly see the proportion of cash-financed transactions falling,” said Tom Popik, research director of Campbell Surveys. The non-cash share of financing for home purchases increased...