The market produced $4.94 billion of new non-agency MBS during the fourth quarter, according to a new Inside MBS & ABS analysis and ranking, the weakest output of the year.
The consensus among speakers at the ABS Vegas conference this week appeared to be that the MBS market is unlikely to change significantly this year. “The status quo is comfortable,” said Larry White, an economics professor at New York University’s business school. Issuers of non-agency MBS are working on reducing the government-sponsored enterprises’ dominance of the secondary market for mortgages, but the chicken-and-egg problem persists. New non-agency issuance has ground to a standstill, and Congress has been slow to move housing-finance reform legislation. In the meantime, industry observers expect...
The Structured Finance Industry Group announced this week that it will convene a taskforce to establish standardized representations and warranties for new non-agency MBS. The “Project RMBS 3.0” effort will involve a wide variety of industry participants in an effort to attract investors to non-agency MBS. If the effort sounds familiar, that’s because the American Securitization Forum issued benchmark reps and warrants in 2009 as part of its Project Restart initiative. “We want to resolve these issues once and for all,” said Eric Kaplan, managing director of Shellpoint Partners and one of the leaders of Project RMBS 3.0, during this week’s ABS Vegas conference sponsored by the SFIG and Information Management Network. He said...
Who at the GSEs (or at the Federal Housing Finance Agency) was responsible for telling Fannie and Freddie to set aside so much money for loan losses and were those assumptions way off base?
The non-agency MBS market is stuck in "limbo until we know where the GSEs are going,” said Steve Abrahams, head of securitization and MBS research at Deutsche Bank Securities.
Hoping to jump start the non-agency MBS market, the Structured Finance Industry Group plans to establish a limited number of options on various rep and warrant issues.
The lender also recently formed a real estate investment trust, Parkside Mortgage Trust. Matt Ostrander, Parkside’s CEO, said the REIT plans to issue a non-agency MBS later this year or in 2015.
In other words, the White House still wants to dismantle Fannie Mae and Freddie Mac and doesn't seem to care about all the money the two are returning to the government.
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