Issuers of non-agency MBS willing to issue publicly-registered securities can look forward to thorough reviews by the Securities and Exchange Commission. Redwood Trust filed an updated shelf registration with the SEC this month and the SEC released some of the feedback that went into crafting the issuer’s new Form SF-3. Issuance of publicly-registered non-agency MBS has been minimal since the financial crisis, with issuers seeing pricing in the private 144A market as adequate. Public transactions are subject to more extensive disclosure standards than private deals. An initial letter from the SEC dated Oct. 29, 2014, noted...

The share of new home mortgage originations packaged into MBS drifted slightly lower in the first quarter of 2016, a new Inside MBS & ABS analysis reveals. Some $255.7 billion of newly originated mortgages were pooled in MBS in the first three months of the year, representing a paltry 67.3 percent of the estimated $380 billion of first-lien originations in the primary market. For the purposes of calculating securitization rates, loans aged more than three months and modified loans are excluded from agency MBS issuance figures. Fannie Mae and Freddie Mac securitized...[Includes one data table]

Risk-retention requirements included in the Dodd-Frank Act that met strong opposition from industry participants may turn out to be a profit source for some real estate investment trusts. Non-agency MBS have been subject to risk-retention requirements since the end of 2015, while the rules go into effect at the end of this year for commercial MBS and other asset classes. “I believe...

The proposed standards drafted by the Structured Finance Industry Group regarding mortgage disclosure rules will help address issues in the non-agency market, according to investors and rating services. Moody’s Investors Service hosted a meeting last week with a group of investors, issuers and others involved in non-agency MBS. Among other issues, the group discussed the Consumer Financial Protection Bureau’s combined Truth in Lending Act and the ...

Clayton Holdings was rated as a deal agent for non-agency mortgage-backed securities last week. The rating by Morningstar Credit Ratings was the first formal assessment of a deal agent, a role aimed at improving protections for investors in new non-agency MBS. Morningstar also assessed Clayton as a representation-and-warranty reviewer, assigning ratings of MOR RV2 for both functions. The firm’s rating scale ranges from RV1 to RV4 and Morningstar said it is the only ...

For the issuance of mortgage-backed securities with non-qualified mortgages to take off, industry analysts suggest that banks need to play a larger role. To this point, nonbanks have been the only issuers of non-QM MBS. Ron D’Vari and Timothy Bernstein, analysts at New Oak, authored an overview of non-QM MBS issued in the latest issue of The Journal of Structured Finance, which was published this month. The analysts said real estate investment trusts and hedge funds ...

A group of investors pushed back against suggestions that so-called private capital won’t return to the market for new non-agency mortgage-backed securities. The Association of Mortgage Investors took exception to recent comments by Timothy Mayopoulos, president and CEO of Fannie Mae. He predicted that the non-agency MBS market won’t come back due to significant losses suffered during the financial crisis. However, the AMI said the government-sponsored enterprises are ...

Real estate investment trusts that specialize in the residential MBS market held $232.44 billion of agency and non-agency MBS at the end of March, according to a new Inside MBS & ABS analysis. The MBS holdings of 16 top mortgage REITs were down 0.3 percent from the fourth quarter and off 11.9 percent from March 2015. However, several REITs boosted their positions during early 2016 and the industry is slated to see a major merger of two firms ... [Includes one data chart]

Draft standards proposed by the Structured Finance Industry Group to address TRID mortgage disclosure issues adequately address the risks posed to non-agency MBS, according to Moody’s Investors Service. The rating service published a detailed analysis of SFIG’s draft proposal this week. On March 18, SFIG proposed a draft standardized approach to the scope of review for exceptions to the combined Truth in Lending Act and Real Estate Settlement Procedures Act ...

The track record of U.S. re-performing loan MBS transactions rated by Fitch Ratings is pretty much what the ratings service expected, and somewhat better than other deals that were not rated, analysts at Fitch said in a new report. “While still very early, the rated transactions issued since 2014 have performed within initial expectations, reflecting positive selection of the borrowers included in the mortgage pools, extensive up-front diligence and supportive transaction structures,” ...