Real estate investment trust Walter Investment Management Corp. announced late last week its closing of a $102 million private placement of non-agency MBS. The purpose of the transaction is to help pay for Green Tree Credit Solutions, which Walter Investment acquired in March for $1.065 billion. Green Tree carries a $37 billion servicing portfolio, mostly for other investors, according to Inside Nonconforming Markets, an affiliated newsletter. The notes were issued by WIMC 2011-1, which is a recently-formed statutory trust sponsored by Walter Investment. “As we near our anticipated early third quarter completion of...

Although the dollar volume of MBS and ABS deals rated by Standard & Poor’s in the first quarter was down from the same period in 2010, the company ranked as the top rating service in both markets, according to a new analysis by Inside MBS & ABS. S&P rated $5.80 billion of non-agency MBS during the first quarter, down 61 percent from its volume in early 2010. But that amounted to 66 percent of total issuance in the market – more than any of its competitors. Overall non-agency MBS issuance was down 50 percent from year-ago levels. Moody’s Investor Services ranked second with $4.5 billion in rated MBS, just over half of the market in... [Includes one data chart]

There is a huge disconnect between some members of Congress and the reality of the private market, that broad investor appetite for non-agency mortgage-backed securities is unlikely to rebound anytime soon, according to panelists at the American Securitization Forum annual conference. “Once you figure out how to get the government sector out of the market, [the belief is that] the private sector will step in and pick up all of that slack, and therefore they will do...

The Federal Reserve Bank of New York last week sold only $1.9 billion of the initial $3.8 billion of non-agency MBS up for auction out of its Maiden Lane II portfolio. On March 30, 2011, the NY Fed announced that through its investment manager, BlackRock Solutions, it would begin the process of selling assets in the MLII portfolio both individually and in segments “over time as market conditions warrant through a competitive sales process.” Maiden Lane was created to bail out American International Group during the financial crisis and acquired...

Most observers have focused on the impact the proposed risk-retention rule would have on non-agency MBS, but key industry groups say the proposed rule attempts to “fix” what isn’t broken – the relatively trouble-free non-mortgage ABS market. “If the risk-retention rules are not appropriately designed to accommodate existing market prac-tices, we risk an immediate and significant reduction in the availability of auto loans, student loans, credit cards and business credit throughout our country without gaining...

Stated-income lending, once a staple of the non-agency market, has not disappeared completely. A few portfolio lenders currently offer the loans, largely to wealthy borrowers looking for jumbo mortgages.In 2006, 54.6 percent of mortgages in non-agency mortgage-backed securities were originated based on alternative, stated or no documentation, according to the Inside Mortgage Finance MBS Database. The mortgages generally performed extremely poorly as borrower income was often overstated. However, private wealth lenders – including California-based...

Ginnie Mae has raised the servicing fee compensation for its Home Equity Conversion Mortgage-Backed Securities (HMBS) program. Currently issuers receive either a flat 6-to-75 basis points monthly servicing fee or a 25-75 bps servicing fee based on a portion of the mortgage interest rate. Effective for HMBS with an issue date on or after July 1, 2011, issuers must select a servicing fee margin of at least 36 bps and not exceeding ...

The mortgage securitization rate hit a record 94.6 percent during the first quarter of 2011 due to huge fluctuations in primary market production trends over the past six months, according to a new analysis by Inside MBS & ABS. The first-quarter securitization rate was up sharply from 84.9 percent for all of 2010, and the rate topped 100.0 percent in the agency mortgage markets. The huge securitization rate numbers stemmed...[Includes one data chart]

A revival in the non-agency MBS market may still be years away because of competing and seemingly contradictory government objectives for housing finance, according to a new analysis from Standard & Poor’s. The government is doing many things all at once to resuscitate the housing market and hasten economic recovery, but those efforts may actually place recovery on a slow track, said Erkan Erturk, an S&P research analyst and author of the report. Erturk concludes that the housing downturn drove the securitization market away from...

The future size and form of the non-agency market continue to be debated even as a number of market participants take significant steps toward reviving issuance of non-agency mortgage-backed securities. One thing is certain: Redwood Trust is no longer alone in its efforts to revive the non-agency market.Goldman Sachs has reportedly acquired more than $1.0 billion in jumbo mortgages via the conduit it established last year. The investment bank is reportedly paying a premium for the loans and plans to issue a non-agency MBS this year. This week, Shellpoint Partners, a specialty finance company, acquired...