Commercial banks and savings institutions reached a record level of investment in non-mortgage ABS during the third quarter of 2013, according to a new Inside MBS & ABS analysis and ranking. Banks and thrifts held a combined $173.12 billion of non-mortgage ABS as of the end of September, up 4.4 percent from the previous quarter. The industrys aggregate ABS portfolio was up 6.9 percent from the third quarter of last year. Banks and thrifts pushed...[Includes one data chart]
The Department of Housing and Urban Development is considering an industry request to delay the implementation of a proposal requiring FHA lenders to perform a financial assessment of all prospective borrowers of Home Equity Conversion Mortgage loans. In remarks during the National Reverse Mortgage Lenders Associations recent annual meeting in New Orleans, FHA Commissioner Carol Galante said HUD is still studying the comments and will need more time to implement the rule. In September, the FHA published a notice in the Federal Register seeking comment on the financial assessment proposal. The proposal is currently in ...
Nancy Handal, managing director of insurance conglomerate MetLife, oversees a $70 billion fixed-income portfolio and a $6 billion high-yield residential MBS opportunity fund but has bought into just one jumbo MBS deal over the past few years. And shes not shy about the reasons why: its all about disclosures. Handal is not happy about what non-agency issuers disclose and in particular shes dismayed that MBS investors are essentially frozen out of the due-diligence process. Speaking at a housing forum sponsored by the Urban Institute and CoreLogic this week, the MetLife executive expressed...
Although non-agency MBS issuance has been a dicey proposition since rates spiked in late spring, residential lenders continue to eye the sector, liking the long-term outlook for jumbo securities. Two nonbanks taking a close look at the jumbo MBS market include Freedom Mortgage and W.J. Bradley Mortgage Capital, both established names in the agency MBS arena. In an interview with Inside MBS & ABS, Freedom Mortgage CEO and founder Stanley Middleman said...
Six months back, CoreLogic was bullish on the outlook for due-diligence work tied to jumbo securitizations. But earlier this month, the publicly-traded mortgage vendor shuttered its due-diligence unit, giving layoff notices to almost 70 workers. Another 40 or so full-timers will likely lose their positions in the next few months as the division winds down. Although the firm declined to discuss the reasons behind the pullout, competitors say the anticipated boom in jumbo securitizations hit a brick wall in the spring when rates spiked and investors began to shy away from the AAA pieces of those securities. In other words, the sour short-term outlook for due-diligence firms scouring for work on non-agency loans is resulting...
Fannie Mae and Freddie Mac picked the low-hanging fruit first and sold large chunks of their most liquid less-liquid assets during the third quarter of 2013 as the government-sponsored enterprises continued to shift their business away from retained investments. The GSEs reduced their combined holdings of commercial MBS by 32.1 percent during the third quarter, according to a new Inside MBS & ABS analysis of their retained portfolios. The Federal Housing Finance Agency has directed the two companies to accelerate their portfolio trimming by focusing on less-liquid assets other than their own MBS. The commercial MBS market has been...[Includes one data chart]
Citigroup Global Markets Realty last week issued the first jumbo mortgage-backed security in more than a month and Redwood Trust is preparing a deal for next week. However, industry participants suggest that jumbo MBS issuance will remain limited through at least early 2014 due to a lack of demand from investors and strong portfolio appetite jumbos among from big banks. Citis $209.95 million jumbo MBS, its first in the new era of the non-agency market, wasnt met with strong demand, according to ...
The weak market for jumbo mortgage-backed securities has prompted Redwood Trust to look into other activities beyond a focus on jumbo mortgages. The real estate investment trust started aggregating agency mortgages in October. Martin Hughes, Redwoods CEO, said the conforming-mortgage activity allows Redwood to create mortgage-servicing rights to hold as investments and potentially participate in risk-sharing activities with the GSEs at the originator level. This market opportunity is many times ...
Real estate investment trusts working to build their jumbo mortgage-backed security operations note that while the environment is currently challenging, they are optimistic about the long term. What were trying to do is have an originator network in place so that we can take advantage of the opportunities, said Bill Roth, CIO of Two Harbors Investment. And it may not be in prime jumbo in the short run. The REIT issued a $434.17 million jumbo MBS in August, its first. Two Harbors said it ...
With qualified-mortgage underwriting requirements set to take effect Jan. 10, the rating services are beginning to detail the role QM status will play in ratings for non-agency mortgage-backed securities. Fitch Ratings appears to be the furthest along in adjusting its ratings process to account for the Consumer Financial Protection Bureaus ability-to-repay rule and QM standards. The rating service this week released its initial perspective for rating non-agency MBS with loans originated in a QM world ...