Radian has pulled the plug on its experiment in the due diligence arena by selling Clayton Services. The unit’s new owner, Covius, is bullish on its prospects.
Its collateral has been performing well, but questions have been raised about Sterling Bank’s non-QM effort. For now, the program has been suspended but the depository is vowing a return.
New York’s six-year statute of limitation for breach of rep-and-warranty claims in RMBS does not raise investor risk significantly if the deal comes with full, upfront third-party due diligence.
The Structured Finance Association issued new guidelines for testing loans in non-agency MBS for compliance with TRID. Requirements were reduced, with industry participants growing more comfortable with TRID liability.
An SEC committee hosted a panel discussion in November regarding the compensation model for rating services. The regulator hasn't made a decision on whether reforms are needed to the issuer-pays model.
An Australian nonbank lender is prepping a residential MBS deal with part of its senior tranche denominated in U.S. dollars. It is not the first time the nonbank has done so.
Fitch is including environmental, social and governance relevance scores as part of its ratings of securitized products. The scores help assess sustainability and ethics though they aren’t a major factor in credit ratings.
Presidential candidate Elizabeth Warren has flagged concerns about the issuer-pays model used by credit rating agencies for securitized products. She said the SEC hasn’t done enough to address the conflicts of interest tied to the model.
If the U.S. economy enters a recession, MBS and ABS are expected to perform relatively well, according to S&P. Subprime auto ABS, certain commercial MBS and CLOs are most at risk for downgrades.
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