Nonbanks are stepping up to the plate on agency MBS. Meanwhile, a handful of large "term" loans are being put together, allowing investors to finance MSRs.
The firm’s deal will be financed with bonds that are expected to have a five-year maturity, a floating-rate coupon and a rating from a major rating service.
If the Federal Housing Finance Agency lowers loan limits for Fannie Mae and Freddie Mac next year, Redwood Trust says it is ready, willing and able to pick up the slack. “If that happens, Redwood will step up and fund those loans, no problem,” said Mike McMahon, managing director of the real estate investment trust, the most active jumbo MBS issuer in the non-agency market. The executive told Inside MBS & ABS that he’s certain that Redwood would have plenty of company as well. “There will be little or no disruption in the market,” he said. According to McMahon, in 2012 lenders produced...
The U.S. Justice Department has subpoenaed documents from Clayton Holdings LLC, once Wall Street’s largest mortgage due-diligence firm, as investigators eye-ball the due diligence that was performed on residential MBS deals in the run-up to the financial crisis. According to Bloomberg, the Justice Department presented a subpoena to Clayton on July 1, requesting an extensive amount of documentation having to do with the firm’s work on such deals. The DoJ is apparently seeking internal communications related to a review of pools of loans, due-diligence reviews performed by Clayton, as well as all communication between the clients for whom the company performed such reviews and the employees with which they dealt. The subpoena is...
Stewart Information Services, which has made a name for itself in the title insurance space, has purchased most of the assets of Allonhill, LLC, a due-diligence firm that conducts reviews on non-agency loans feeding jumbo MBS. No purchase price was disclosed on the sale. As Inside MBS & ABS went to press, both companies were saying little about the sale outside of a short press release. Due-diligence sources familiar with the deal say...
The revised risk-retention rule proposed last week by federal regulators includes provisions that are looser than current practices in the non-agency jumbo mortgage-backed security market and some that are more stringent. Regulators also acknowledge that the proposed rule maintains incentives for lenders to focus on originations of agency mortgages. The regulators now favor aligning the definition of qualified residential mortgages under the risk-retention rule with the qualified mortgage standard ...
With backing from President Obama, the Federal Housing Finance Agency is considering lowering Fannie Mae and Freddie Mac loan limits in 2014. Industry participants have used the potential change to call on the Consumer Financial Protection Bureau to alter requirements for qualified mortgages. “Assuming the loan limits are lowered, the problem of excluding too many loans from QM coverage could be addressed, at least temporarily, by modifying the ability-to-repay rule,” Pete Mills, a ...
Richard Johns, executive director of the Structured Finance Industry Group, said the SFIG is apprehensive about the overall effect the ability-to-repay rule and qualified mortgage provisions will have on jumbo mortgage lending. The SFIG recently met with the Consumer Financial Protection Bureau to discuss the issues. In a follow-up letter sent in August, the SFIG said its primary concerns are the effect the debt-to-income ratio requirement for QMs will have on borrower access to jumbos; the ...
Banks have been retaining recent originations of jumbo mortgages in portfolio while selling vintage mortgage servicing rights to nonbanks or entering into subservicing agreements. And with the rise in interest rates, banks have increased their appetite for adjustable-rate mortgages. Banks held $1.76 trillion in first liens in portfolio as of the end of the second quarter of 2013, down only 0.1 percent from the second quarter of last year, according to a new ranking and analysis ... [Includes one data chart]
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