Participants in the non-agency mortgage-backed security market are concerned about the strength of the sector as interest rates and other pricing metrics have increased significantly in recent weeks. When the 10-year Treasury rate started to rise recently and the mortgage interest rate spread out by 20 basis points, the non-agency MBS market spread out by 50 basis points, said Lewis Ranieri, chairman of Ranieri Partners, at a forum hosted by the Bipartisan Policy Center last week. And given theres ...
Shellpoint Partners issued its first non-agency jumbo mortgage-backed security this week, which differs in a number of ways from non-agency MBS issued since 2010. The deal is an attempt to loosen slightly non-agency MBS underwriting standards, although the rating services were critical of the originator, New Penn Financial. Shellpoint Asset Funding Trust 2013-1 was initially planned as a $261.58 million non-agency MBS, according to presale reports issued last week. The deal was reportedly restructured ...
The preferences of investors and the rating services play a significant role in the characteristics of mortgages included in non-agency jumbo mortgage-backed securities, according to industry participants. The rating agencies are a first part of the analysis, but investors in these bonds are paying very careful attention to these loan characteristics, to credit exceptions and to who the lenders are, Peter Sack, a managing director at Credit Suisse, said this week at a webinar ...
When interest rates rise rapidly as they have the past two weeks lenders suffer. But it appears the few dozen or so hard-money and subprime lenders operating quietly in the trenches are doing just fine and are even seeing an increase in loan requests. Mark Mozilo, a principal in CALCAP Advisors, told Inside Nonconforming Markets that his hard-money firm will fund 40 loans in the second quarter of 2013, its highest quarterly volume to date. The company is just a few years old. Mozilo added that ...
A bipartisan group of members of the Senate Banking, Housing and Urban Affairs Committee introduced legislation this week to reform the government-sponsored enterprises. However, industry participants and analysts predict that Congress is unlikely to pass GSE reform anytime soon. S. 1217, the Housing Finance Reform and Taxpayer Protection Act, would wind down Fannie Mae and Freddie Mac within five years of passage and replace their functions with a new government entity ...
Bank and thrift holdings of home-equity loans continue to decline, according to the Inside Mortgage Finance Bank Mortgage Database. Performance on the loans has been mixed, and there are concerns about the expiring interest-only period on vintage home-equity lines of credit. Banks and thrifts held $1.07 trillion in HELs HELOCs, unused HELOC commitments and closed-end second liens at the end of the first quarter of 2013, down 1.8 percent from the previous quarter. TD Bank was ... [Includes one data chart]
Looser underwriting standards and concerns about the financial strength and limited operational history of Shellpoint Partners pushed the credit enhancement on the issuers pending non-agency MBS to levels not previously seen in the new wave of non-agency MBS issuance. Shellpoint is preparing a $261.58 million non-agency jumbo MBS, according to presale reports released this week. The deal is set to receive a AAA rating with credit enhancement of 10.10 percent on the top-rated tranche. AAA credit enhancement levels on recent deals from Redwood Trust and JPMorgan Chase have ranged...
With the Federal Housing Finance Agency working on a common securitization platform for Fannie Mae and Freddie Mac, market participants are beginning to ask whether the residential finance sector really needs two government-sponsored enterprises. This week, at a policy forum in Washington, MBS co-inventor Lewis Ranieri and former GSE regulator James Lockhart suggested that the industry doesnt need both Fannie and Freddie. The thinking is that a common securitization platform will facilitate the transition to a standardized GSE MBS, with slight variations, that would eliminate the current pricing differentials between Fannie and Freddie MBS. Speaking at the Bipartisan Policy Center, Lockhart noted...
The amount of home mortgage debt outstanding continued its post-crisis downward spiral in the early months of 2013, although the agency servicing market grew slightly, according to a new analysis and ranking by Inside Mortgage Finance. The Federal Reserve reported total home mortgage debt outstanding of $9.868 trillion as of the end of March, down 0.6 percent from the previous quarter. Under pressure from falling house prices and the collapse of the non-agency market, the supply of MDO has been in steady decline since peaking at its all-time high of $11.195 trillion at the end of 2007. Single-family servicing associated...[Includes two data charts]
Former top CFPB officials are banking on the widespread assumption that most mortgage lenders plan to avoid making mortgages that do not meet the qualified mortgage standard under the bureaus ability-to-repay rule. Raj Date, the former deputy director at the CFPB, and three other high-placed bureau alums, Garry Reeder, former chief of staff; Chris Haspel, former senior advisor for mortgage servicing and securitization; and Mitchell Hochberg, former regulatory senior counsel, have created a new consumer finance company called Fenway...