Redwood Trust offered no surprises in its fourth jumbo MBS of the year, a $313.2 million deal that closely resembles the six previous transactions the firm has issued since pioneering the rebirth of the non-agency market back in 2010. With squeaky clean collateral and an investor-friendly securitization structure, Sequoia Mortgage Trust 2012-4 includes three triple-A classes totaling $290.4 million that will be supported by 7.30 percent credit enhancement. Thats the same level as in Redwoods previous deal, significantly lower than the 8.25 percent enhancement on its first 2012 transaction and slightly above the 7.15 percent level on its second deal this year. In several areas, the latest Redwood MBS includes...
Redwood Trust is set to issue its fourth non-agency jumbo mortgage-backed security of the year, according to presale reports released this week. The $313.22 million non-agency jumbo MBS includes only slight changes to improve on securities previously issued by the real estate investment trust. Sequoia Mortgage Trust 2012-4 is set to receive triple-A ratings from Fitch Ratings, Kroll Bond Rating Agency and Moodys Investors Service, with 7.30 percent credit enhancement on the highest-rated ... [Includes one data chart]
The eminent domain proposal from Mortgage Resolution Partners will either painlessly help thousands of non-agency borrowers or severely harm the non-agency market, according to industry participants. The newly expanded plan could even hinder efforts to revive the non-agency market going forward, according to MRPs opponents. Eminent domain is an important method for mitigating losses to investors, Graham Williams, CEO of MRP, said in a comment letter last week to the Federal Housing Finance Agency ...
Lender-related underwriting and disclosure issues have prompted a significant increase in liability for non-agency mortgage-backed security issuers, based on a court ruling last week. The U.S. Court of Appeals for the Second Circuit found that liability extends beyond trusts specifically purchased by investors to potentially all trusts in an issuers shelf with mortgages originated by the same lenders. Investors may now seek to intervene to broaden classes in MBS class actions that dont explicitly ...
Performance of jumbo mortgages originated before 2005 is declining, bucking a trend among non-agency mortgages, according to Fitch Ratings. Most of the remaining pre-2005 jumbo borrowers have been unable to refinance. Many high-quality mortgage borrowers are refinancing to take advantage of record-low interest rates, leaving the remaining mortgage pools increasingly concentrated with borrowers unable to refinance, said Grant Bailey, a managing director at Fitch. More than 93.0 percent of the roughly ...
The Securities and Exchange Commission revealed details last week on its battle for due diligence reports on non-agency MBS issued by Ally Financials Residential Capital. A number of other ongoing non-agency MBS lawsuits and SEC investigations have been based on information included in due diligence reports. The SEC is seeking due diligence reports prepared by Office Tiger Global Real Estate Services, a wholly-owned subsidiary of Donnelly, on behalf of investment banks that underwrote 17 non-agency MBS issued by ResCap. The SEC said it is investigating possible fraud in the offering and sale of residential MBS by ResCap. The information in Donnelleys possession is...
The battle over legacy MBS continues to rage in courts across the country as Bank of New York Mellon filed repurchase-related lawsuits against two financial institutions, Massachusetts Mutual was allowed to proceed with its claims against Countrywide, and a federal banking regulator sued major banks for alleged MBS misrepresentations. On Aug. 21, BNY Mellon, in its capacity as trustee for a pool of loans known as GE-WMC Mortgage Securities Trust 2006-1, sued WMC Mortgage and GE Mortgage Holdings for their alleged failure to repurchase approximately $680 million in defective residential mortgages. According to the lawsuit filed in New York state court, a holder of more than 25 percent of the voting rights under the pooling and servicing agreement notified...
The Treasury Departments recent announcement on the next steps to wind down the government-sponsored enterprises will have little immediate impact on the non-agency market, according to industry analysts. The Treasury will require Fannie Mae and Freddie Mac to contribute all future profits to the government, reduce their investment portfolios at a quicker pace and submit annual plans to reduce mortgage credit risk. [The changes] will help expedite the wind down of Fannie ... [Includes one chart]
A lawsuit filed last week by Bank of New York Mellon against WMC Mortgage and GE Mortgage Holdings is the latest sign that repurchase issues on non-agency mortgage-backed securities are increasing. After years of resistance, trustees are starting to act on behalf of non-agency MBS investors seeking repurchases. Three of the four major banks reported increases in non-agency repurchase requests in the second quarter of 2012 compared with the previous quarter, according to an analysis by Inside Nonconforming Markets ...
The five servicers participating in the $25.0 billion national servicing settlement have taken vastly different approaches to loss mitigation, according to a report released this week by the Office of Mortgage Settlement Oversight. Short sales dominated early activity and Bank of America, the servicer with the largest obligations under the settlement, accounted for a small amount of initial loan modifications completed by the servicers. Combined, the five servicers granted non-agency borrowers ... [Includes one chart]