A little known lender called Angel Oak Mortgage Solutions hopes to fund $540 million of product this year and generate the industry’s first nonprime non-agency MBS of the “new era” with financing provided by Nomura. According to industry officials who have viewed investor materials issued by the company – a copy of which was provided to Inside MBS & ABS – Nomura has even agreed to provide “gestation repo” warehouse credit to the privately held originator. One source who claims to have knowledge of the arrangement said...

Concerns about how borrowers will be impacted by a change in servicers go beyond mortgages in non-agency MBS. Analysts at Moody’s Investors Service warn that the decentralized servicing models used for consumer loan ABS issued by Springleaf Holdings and OneMain Financial face significant risks in the event that servicing needs to be transferred. Both Springleaf and OneMain originate consumer loans at local branches, where they conduct certain servicing operations and collections. The decentralized model can help boost originations and loan performance, though there are risks for investors in consumer ABS with decentralized servicing. “As long as the originator maintains the customer relationship and local presence, this ‘high-touch’ model can help...

Ginnie Mae mortgage-backed securities issuance fell in the first quarter of 2015 with FHA volume slipping during the period, according to an Inside FHA/VA Lending’s analysis of agency data.Ginnie MBS production in the first quarter totaled $79.8 billion, down from $80.6 billion in the 4Q14, despite a 29.3 percent increase from February to March. On the other hand, production was up 41.6 percent from a year ago.FHA-backed Ginnie MBS issuance dropped 3.1 percent in the first quarter from 4Q14, ending the period with $39.9 billion. Year-over-year volume rose 22.0 percent from the previous year. On the other hand, refinancing increased to $12.3 billion from $7.8 billion during the same stretch. VA securitization totaled $35.5 billion, up from $33.6 billion quarter-over-quarter, powered by refinance loans. Rural housing securitization totaled $4.2 billion in the first quarter, down from $5. 7 billion in 4Q14. Securitized FHA purchase loans rose 7.7 percent in March from February, while ... [3 charts].

It’s not just structural issues that are keeping investors away from jumbo MBS; they are finding better value in other non-traditional mortgage securities products, including Fannie Mae and Freddie Mac risk-share transactions and deals backed by seasoned loans. During the fourth quarter of 2014, Javelin Mortgage Investment sold all of its holdings of prime, fixed, senior bonds from new-issue jumbo MBS. The real estate investment trust sold a total of ...

Ocwen Financial pushed back this week against claims from large investors that have worked to remove the nonbank as servicer on 119 non-agency MBS. “By all indications, the holders employed unsupportable assumptions and manipulated their analysis to advance their agenda,” Timothy Hayes, an executive vice president and general counsel at Ocwen, wrote in a letter to the trustees of the MBS in question. The letter was a response to claims made ...

In 2014, Freddie Mac securitized $6.983 billion of re-performing mortgages, double what it did the year prior, and a sign that this niche market is heating up. As for Fannie Mae’s participation in “re-performers,” that’s a different matter entirely. The government-sponsored enterprise has yet to stick its toe in the water, though a spokesman for the company told Inside MBS & ABS that “it’s something we continue to evaluate.” But just how hot might the sector get ...

Nomura Holdings is unlikely to suffer a hit in ratings because of the Federal Housing Finance Agency’s mortgage-backed securities lawsuit, but the litigation may yet prove costly to the Japanese financial holding company, according to a recent report from Fitch Ratings. Nomura went to trial on March 16 to defend itself against allegations that it misrepresented the underlying asset quality of MBS it sold to Fannie Mae and Freddie Mac prior to the financial crisis ...

A bipartisan group of U.S. Senate lawmakers this week urged the Federal Housing Finance Agency to move the budding common securitization platform for Fannie Mae and Freddie Mac “past the duopolistic tendencies of the past.” The FHFA originally directed the two government-sponsored enterprises to develop the CSP so that it would be open to and functional for all residential mortgage securitizers, but the agency last year detoured slightly ... [Includes one data chart]

MBS investors – so far – are losing little sleep over the effect plunging oil prices might have on the market, even though delinquency rates in Texas are beginning to creep up. In some quarters of the industry, the fear is that a major (and further) correction in the energy sector will lead to massive layoffs in states dependent on oil, and that mortgagors, in time, will go delinquent on their loans. In turn, MBS and servicing rights that have a heavy concentration in ...

While Wall Street professionals spent the run-up to this week’s meeting of the Federal Open Market Committee wondering whether the Fed would lose its “patience” regarding a future increase in interest rates, the FOMC continued its present course on MBS investment. “The committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency MBS in agency MBS and of rolling over maturing ...