Moody’s Investors Service is working to correct errors it made when rating a significant number of interest-only tranches on non-agency MBS dating back to at least 2015. At the end of August, Moody’s placed ratings of IO tranches from 953 MBS on review. While such reviews generally indicate whether an upgrade or downgrade is possible, the rating service said it wasn’t sure which direction ratings would go for many deals included in the review. The effort covers...

Private-label issuance all but disappeared since the recession and is finally expected to make a comeback, but lenders and aggregators will have a host of new requirements to meet. One firm is planning to help the industry navigate today’s landscape by offering a solution aimed at non-agency MBS readiness for new and old issuers. Clayton Holdings announced last week that it designed a program to help lenders and aggregators with their due diligence by understanding and preparing to comply with the new rules surrounding securitizing these non-agency assets. The firm hopes...

Partly to comply with liquidity cover ratio requirements imposed in the wake of the financial crisis, U.S. banks ramped up their holdings of high-quality liquid assets. But once they got compliant, many of them shifted their asset allocations more to agency MBS and U.S. Treasuries, according to researchers at the Federal Reserve. This could have implications for the U.S. central bank’s massive balance sheet over the long haul, they added. As of Jan. 1, 2015, large banks in the U.S. have needed...

A former employee of Standard & Poor’s Rating Services beat fraud charges alleging she loosened S&P’s rating methodology for commercial MBS to generate business for her employer. However, she was found liable of the lesser charge of negligence for failing to disclose the change. In his initial Aug. 29 decision, Administrative Law Judge James Grimes of the Securities and Exchange Commission’s administrative court said that while Barbara Duka did change the firm’s rating methodology for CMBS, he found no evidence that she intended to manipulate, deceive or defraud investors. Rather, Duka, manager of S&P’s CMBS rating group, did...

Just because consumers might be off the hook for at least 90 days on making their payments, MBS investors will want their money, noted on observer…

In case you’re wondering the concept of GSE “recap and release” is not under consideration...

Independent mortgage bankers are leading all other lenders in providing mortgage loans to first-time homebuyers, minorities, lower-income borrowers and rural areas, and yet they are more regulated than banks, according to a new industry report. The report from the Community Home Lenders Association underscores the fact that IMBs are small businesses that don’t have access to federally insured deposits. It claims that IMBs have done a better job of servicing home loans ...

ICBA’s comment marks the first time that a major industry trade group has questioned putting Fannie and Freddie into conservatorship…

PHH Corp. and Realogy Holdings Corp. and some of their subsidiaries and affiliates recently agreed to a $17 million settlement to bring to an end a putative class-action lawsuit over allegedly deceptive and collusive practices in violation of the Real Estate Settlement Procedures Act. At issue were allegations of arranging kickbacks for unlawful referrals of title services. The plaintiffs in the case alleged...

Although the National Credit Union Administration and a top CU trade group favor allowing credit unions to buy mortgage servicing rights in the secondary market, don’t look for these “nonprofit” depositories to become significant players anytime soon. At least that’s the opinion of a handful of investment bankers and others who ply their trade in the MSR market. For starters, CUs are not...