Wall Street generated $165.66 billion of new non-mortgage ABS during 2013, a sturdy 12.7 percent increase over the previous year and the best annual production volume since 2008, according to a new analysis and ranking by Inside MBS & ABS. ABS issuance fell off in the fourth quarter of 2013, dropping 10.4 percent from the third quarter, as all the major asset classes saw slowing volume. The $37.82 billion of new ABS generated in the final three months of 2013 was slightly below the second quarter, but it was above the level set in the third and fourth quarters of 2012. Vehicle-finance ABS turned in...[Includes two data charts]

Investors in non-agency MBS continue to push for increased transparency on both vintage securities and new issuance. Issuers suggest that they want to provide additional information to investors but costs and regulatory issues have prevented adequate communication. A significant number of investors attending the ABS Vegas conference last week said bondholder communication on non-agency MBS is rarely adequate. The conference was sponsored by the Structured Finance Industry Group and Information Management Network. Bill Moliski, a managing director at SG Capital, an investment management firm, has...

Issuance of non-agency mortgage-backed securities is expected to remain constrained until a number of issues are sorted out, from reform of the government-sponsored enterprises to an increase in demand from investors. “The non-agency MBS market is stuck somewhat in limbo until we know where the GSEs are going,” said Steven Abrahams, head of securitization and MBS research in the U.S. at Deutsche Bank Securities, during last week’s ABS Vegas conference. More than 5,600 people registered ...

The Treasury Department and the Structured Finance Industry Group announced separate initiatives last week aimed at increasing activity in the non-agency market. Both efforts plan to round up a variety of industry participants to work through issues that have prevented significant issuance of new non-agency mortgage-backed securities. “In the absence of an apparent leader, Treasury plans to coordinate a series of conversations with relevant regulators, market participants and other stakeholders to help ...

The risks that come with originating loans that don’t receive qualified mortgage protections can be significant. However, industry participants suggest that low-risk non-QMs can be priced at levels similar to the interest rates available on QMs. While interest-only mortgages don’t meet the Consumer Financial Protection Bureau’s standards for QMs, a number of banks plan to continue to offer IOs to well-qualified borrowers. Analysts at Barclays Capital noted that the loans don’t present lenders with ...

Mortgages included in new non-agency mortgage-backed securities that fall outside of the safe harbor for qualified mortgages will be assigned higher loss expectations, according to criteria released last week by Standard & Poor’s. Other rating services have released similar criteria, with credit-enhancement requirements expected to be higher for non-agency MBS that include loans other than safe harbor QMs. The Consumer Financial Protection Bureau’s ability-to-repay rule established a number of ...

While the net supply of non-agency mortgage-backed securities continues to run off, holdings by banks and thrifts actually increased in the third quarter of 2013, according to a new ranking and analysis by Inside Nonconforming Markets. The entities held $145.83 billion in non-agency MBS at the end of the third quarter of 2013, up 2.2 percent from the previous quarter. Banks and thrifts held 17.8 percent of non-agency MBS outstanding at the end of the third quarter. JPMorgan Chase is the ... [Includes one data chart]

Borrowers looking to purchase a home with a loan balance above conforming loan limits have a number of financing options, according to real estate agents across the country. However, some potential homebuyers are opting to avoid jumbo mortgages by paying with cash or putting enough down to receive a conforming mortgage. Tom Popik, research director of Campbell Surveys, said respondents to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey reported that jumbo mortgage availability ...

Cove Financial is targeting borrowers who can’t qualify for agency mortgages and offering them a unique rent-to-own option. The lender’s Mortgage Alternative Program involves a process that looks a lot like the purchase-mortgage process but instead gives a borrower time to rebuild credit before purchasing a home. “It’s for people who have a downpayment but don’t currently qualify for a mortgage,” Patrick Flanagan, CEO of Cove Financial, said of the MAP. A borrower working with Cove goes through a ...

Ocwen Financial agreed to purchase the servicing rights on $39.2 billion of mortgages from Wells Fargo. The mortgages included in the deal are largely in non-agency mortgage-backed securities. Ocwen will pay $2.7 billion. The Obama administration renewed calls for Congress to approve legislation that would establish a refinance program for non-agency borrowers. The administration has been pushing for a non-agency refi program since at least early 2012 but Republicans in Congress ... [Includes three briefs]