New MBS issuance backed by income-property mortgages fell in the first quarter of 2016 as all sectors of the market got off to a weak start in the new year, according to a new Inside MBS & ABS analysis. A total of $44.78 billion of commercial mortgages were securitized in the first three months of the year, down 11.8 percent from the fourth quarter. It marked the lowest three-month output since the second quarter of 2014, when $37.61 billion of commercial mortgages were securitized. Both sides of the industry saw...[Includes one data table]

A lack of formal guidance from the Consumer Financial Protection Bureau regarding TRID mortgage disclosures won’t prevent rating services from placing ratings on new non-agency MBS. The rating services are even willing to rate new deals before the Structured Finance Industry Group releases standards for the handling of TRID issues by third-party due diligence firms. However, issuers and investors appear to be less comfortable with liability from the rule the CFPB implemented in October combining the disclosure requirements of the Truth in Lending Act and the Real Estate Settlement Procedures Act. Save for a $331.95 million jumbo MBS issued by Two Harbors Investment at the end of March, no firm has issued a deal that includes loans subject to TRID. On March 18, SFIG proposed...

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...

The performance of mortgages originated in recent years remains strong, pushing down delinquency rates across loan types. However, liquidation timelines for certain loans have hit new highs recently as servicers continue to work on foreclosing mortgages that went into default years ago. As of the end of March, the overall delinquency rate on mortgages declined to 4.08 percent, according to Black Knight Financial Services. The delinquency rate declined by 12.4 percent compared with March 2015 and is at its lowest point since March 2007. The foreclosure pre-sale inventory rate was...

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 ...

First Republic Bank announced this week that it increased its minimum wage to $20 per hour. The bank, which focuses on originating jumbo mortgages, also introduced a purchase-mortgage product for borrowers in underserved minority neighborhoods. Officials at First Republic were unwilling to elaborate on the new initiatives beyond details provided in a press release. “First Republic has an active and significant commitment to building ... [Includes nine briefs]

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 ...