Issuance of non-agency MBS backed by newly originated home loans remains well below levels seen before the financial crisis. While new regulations have stopped some pre-crisis loan types from being originated, industry participants suggest that other major factors are also limiting the supply of loans available for MBS. Chris Helwig, a managing director at Amherst Pierpont, noted that banks are competing for prime jumbos and holding them in portfolio, and many borrowers who previously might have received subprime mortgages opt for FHA loans. “All that is left for non-agency MBS is...
A former Deutsche Bank employee is at the center of a lawsuit brought by the government over the sale of more than $1 billion of non-agency MBS. It’s rare when the government focuses on an individual for mortgage fraud, but the Department of Justice said the bank’s former head of subprime trading allegedly defrauded investors out of hundreds of millions of dollars. The civil complaint was filed in Brooklyn’s federal court against Paul Mangione for knowingly selling bad subprime mortgages financed during the crisis and misleading investors about loan quality. The complaint alleges that he engaged in fraudulent schemes involving the origination practices of Deutsche Bank’s subsidiary, DB Home Lending LLC, which originated the bulk of the loans. The securities were sold...
ATTOM’s Daren Blomquist: “In markets where distressed discounts have largely dried up, flippers are showing more willingness to leverage financing when acquiring properties…”
“Liquidity is strong across the spectrum and probably the best we’ve ever seen for structured products,” said Scott Levy, a senior managing director at Guggenheim Securities…
The seasonal surge in primary market mortgage originations stood in stark contrast to a slump in new residential MBS issuance during the second quarter of 2017. Mortgage lenders originated an estimated $455.0 billion of new first-lien loans during the April-June cycle, an 18.2 percent increase from the first three months of the year, according to estimates by Inside Mortgage Finance. But the secondary market generated just $294.7 billion in MBS backed by purchase and refinance loans – a 5.3 percent decline. The result was...[Includes one data table]
Most rated residential MBS in regions affected by Hurricanes Harvey and Irma have limited exposure that will mitigate the losses resulting from the devastation, according to rating services. Residential MBS rated by Moody’s Investors Service, including securities backed by single-family rental properties, have minimal exposure to the storm-affected counties of Texas and Louisiana thereby easing the losses due to reduced property values, rising delinquencies and longer foreclosure and liquidation timelines, the rating agency said. The analysis is...
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