Home Loan Servicing Solutions is preparing to issue a $350 million servicer advance receivable ABS, according to a presale report issued late last week by Standard & Poor’s. With the deal, $5.3 billion in mortgage servicer advance ABS will have been issued this year, according to the rating service. S&P has been the dominant rating agency in servicer advance ABS. Erkan Erturk, senior director of global structured finance research at the rating service, said issuance of servicer advance ABS is on track to reach the $7.0 billion in issuance S&P predicted at the beginning of the year. HLSS Servicer Advance Receivables Trust Series 2013-T6 received...

Revised risk-retention requirements proposed last week by federal regulators for certain non-mortgage ABS and commercial MBS are somewhat looser than the standards initially proposed in 2011. Perhaps most significantly, “blended pools” would be allowed for commercial mortgages, commercial real estate loans and auto loans, allowing issuers to mix qualifying loans and non-qualifying loans in the same security. Securitized loans that don’t meet qualifying underwriting standards will be subject to the 5 percent risk retention as required by the Dodd-Frank Act. Blended pools would be eligible for reduced risk retention, as low as 2.5 percent. “The agencies believe...

Standard & Poor’s is defending its status as the top rating service in the non-agency MBS market through the first half of 2013, having put its stamp on 39.0 percent of the growing market, according to a new Inside MBS & ABS ranking. S&P has been the top non-agency MBS rating agency over the years but saw DBRS capture the title in 2012 with 54.8 percent of rated transactions. The non-agency ratings business has become significantly more fragmented than it was before the financial collapse, when S&P often rated more than 90.0 percent of the deals that came to market. Both Fitch and Kroll Ratings are...[Includes two data charts]

Rising interest rates and increased volatility helped slow new issuance of non-mortgage ABS during the second quarter of 2013, with declines posted in most asset classes. A total of $38.96 billion of non-mortgage ABS were issued during the second quarter, down 17.3 percent from the first three months of the year, according to a new Inside MBS & ABS ranking and analysis. At the midway point in 2013, ABS issuance was off 3.7 percent from the first six months of last year, which included heavy volume in the second quarter of 2012. Even with the second-quarter softening, ABS issuance in 2013 is...[Includes two data charts]

Federal regulators will make their next move on risk retention and defining qualified residential mortgages in September, according to the Federal Reserve. Meanwhile, the Securities and Exchange Commission is working on a number of long-pending MBS rules, including the so-called Reg AB2. The Fed expects to take “further action” on risk retention in September, according to its latest regulatory agenda. The SEC, which is jointly working on the risk-retention rule with the Fed and other agencies, was vague, stating that the next action date was “undetermined.” Regulators have received...

The Financial Industry Regulatory Authority will begin disseminating information for so-called specified-pool MBS issued by Fannie Mae, Freddie Mac and Ginnie Mae, as well as securities backed by loans with Small Business Administration guarantees. The move is aimed at increasing transparency in specified pools, which represent an estimated 3,500 trades, totaling $18 billion in par value, on an average daily basis. It follows a similar effort by FINRA last year in the to-be-announced market for agency MBS. Transaction data will be circulated...

The audience for the marketing of private-placement securities is set to increase due to changes approved last week by the Securities and Exchange Commission. Separately, the Financial Industry Regulatory Authority voted to increase transparency for consumer ABS private placements, prompting some to suggest that FINRA could also increase transparency for private-placement non-agency MBS. The SEC voted 4-1 to adopt a new rule to implement a JOBS Act requirement to lift the ban on general solicitation or general advertising for certain private securities offerings offered under Rule 506. The SEC also amended Rule 144A, which covers private placements of non-agency MBS and other securities. Under the new rule, offers of 144A securities can be made...

New MBS and ABS issuance slowed in the second quarter of 2013 as rising interest rates in June stalled the market’s momentum. A total of $495.4 billion in residential MBS and non-mortgage ABS were issued during the second quarter of 2013, according to a new Inside MBS & ABS market analysis. That was down 3.7 percent from the first quarter of the year, although total production during the first half of 2013 was still up 17.8 percent from the same period last year. June was...[Includes one data chart]

Japan became the biggest overseas investor in U.S. MBS and ABS markets last year, moving past mainland China to head the ranking, according to final Treasury Department data. Japanese investors held $199.7 billion of U.S. MBS and ABS as of the midway point in 2012, the one time a year when Treasury releases detailed foreign holdings of U.S. long-term securities. That was up 21.3 percent from June 2011, when Japan held just $164.7 billion of MBS and ABS. The Japanese increased...[Includes one data chart]

Investors in vintage non-agency MBS could take $7.8 billion in losses due to previously undisclosed principal forbearance on top of the $1.0 billion in losses uncovered this month. However, a survey suggests that servicers don’t intend to pass the losses through to investors. The losses recognized in May were reported after Ocwen Financial took over servicing from Homeward Residential. Analysts warned that other servicing transfers could prompt similar losses. Bank of America Merrill Lynch said...