Structured finance investors don’t have much of an appetite for new non-agency MBS, but they appear to be hungry for fast-food business securitizations. Taco Bell is the latest firm to enter the market, offering a $2.10 billion securitization. The planned Taco Bell Funding LLC Series 2016-1 received preliminary BBB ratings from Standard & Poor’s late last week. It’s the second whole-business securitization to price this year, following a $575.0 million deal involving Sonic Drive-In that also priced in April. The Taco Bell securitization is backed...

A lender that focuses on investment properties is preparing to issue a non-agency MBS backed by adjustable-rate mortgages on residential and commercial properties. The deal shares some characteristics with non-agency MBS backed by new loans, but it’s different in a lot of ways. The planned $358.60 million Velocity Commercial Capital 2016-1 received provisional AAA ratings this week from Kroll Bond Rating Agency. Residential properties account for 55.3 percent of the collateral, with small commercial properties making up the rest. All of the mortgages backing the planned MBS are for investment properties. Velocity Commercial Capital issued...

Pingora Asset Management, one of the largest investors in “flow” mortgage servicing rights arrangements, is about to become the property of the nation’s largest real estate investment trust focused on the MBS market, Annaly Capital Management, New York. The purchase of Pingora’s parent, Hatteras Financial, Winston-Salem, NC – a deal valued at $1.5 billion – was unveiled last week, but one important facet regarding Hatteras garnered little in the way of press attention: that it just happens to own Pingora, which at last check laid claim to roughly $76 billion in MSR assets. However, not all of the servicing rights will become...

Relatively strong pricing for a jumbo mortgage-backed security issued at the end of March appears to have done little thus far to open the spigot for deals that include loans subject to the TRID mortgage disclosure rule. The $331.95 million Agate Bay Mortgage Trust 2016-2 was issued by Two Harbors Investment at the end of March. The deal included 43 mortgages subject to TRID, many of which had initial compliance exceptions. Analysts at Interactive Data said ...

New reports suggest that government-backed mortgage markets provide better stability for the economy, while investors in non-agency mortgage-backed securities were faulted for abandoning the market after the start of the financial crisis. A paper published last week by economists at the Federal Reserve found that areas with high levels of participation from the government-sponsored enterprises and FHA had relatively lower unemployment rates, higher home sales ...

For mortgage bankers, it was another trying week in TRID purgatory: A mid-sized nonbank exited the correspondent jumbo market because of concerns over legal liability and separately it appeared industry trade groups have given up hope that the Consumer Financial Protection Bureau will issue any type of formal guidance on cures. Meanwhile, the TRID scratch-and-dent market continues to hum along and the consumer watchdog agency has begun examining residential lenders for compliance with the integrated disclosure rule. “TRID exams have commenced...

When interest rates take an unexpected dive – as they did in the first quarter – it can wreak havoc on servicing assets as banks and nonbanks try to calculate a fair market value for their residential receivables. According to interviews conducted by Inside Mortgage Finance and based on a compilation of values by Piper Jaffray, certain megabanks assigned some of the lowest values in years to their portfolios during the first quarter of this year. Bank of America, for instance, which usually ranks third among all servicers, assigned...[Includes one data table]

Kroll Bond Rating Agency warned recently that it might refuse to rate certain non-agency mortgage- backed securities subject to the TRID mortgage disclosure rule until the CFPB issues formal guidance.The rating service said it’s currently unclear whether certain corrections of errors under the bureau’s integrated disclosure rule will subject non-agency MBS investors to assignee liability. This is an issue that the Structured Finance Industry Group continues to work on, with SFIG also stressing that formal guidance from the CFPB is necessary. “In instances where these violations go un-corrected by an originator, KBRA believes the risks associated with TRID-eligible loans, in material concentration, become more significant and that KBRA may consider additional credit enhancement, applying a rating cap, or declining ...

Fannie Mae and Freddie Mac are not conducting loan-level reviews for compliance with the CFPB’s integrated disclosure, and that threatens investors in the pair’s future credit-risk transfer transactions with the possibility of some modest losses because of lender compliance violations, according to a recent report from Moody’s Investor Service. “We expect overall losses on these transactions owing to TRID violations to be fairly small, despite our expectations that the frequency of violations will be high, at least initially,” analysts at the rating service said. “Furthermore, lender representations and warranties and the government-sponsored enterprises’ ability to remove defective loans from the transactions will likely mitigate some of these losses.” Damages for TRID violations are less significant for a securitization transaction compared ...

The nation’s largest MBS-investing real estate investment trust, Annaly Capital Management, this week agreed to buy the third largest player in the market, setting off speculation among analysts and investors that the “mREIT” sector could be in for a healthy dose of consolidation. The New York-based Annaly said it would buy Hatteras Financial Corp., Winston-Salem, NC, for roughly $1.5 billion in cash and stock. At year end, Annaly ranked...