Officials involved in the development of the common securitization platform and the single, interchangeable MBS for Fannie Mae and Freddie Mac have vowed not to publicize any timetable for the project. And despite several attempts to get an answer during a panel session at this week’s secondary market conference sponsored by the Mortgage Bankers Association, they stuck to their plan. They went out of their way to stress that they haven’t forgotten about potential non-agency users sometime down the road. But that’s...
In April, the average daily trading volume in agency MBS fell to $187.8 billion, the worst reading of the year and a possible harbinger of problems to come. One market participant, speaking under the condition his name not be used, likened it to MBS buyers “going on strike.” He added: “Right now, you have an illiquid market, and that’s not a good thing.” In December of last year, the MBS trading volume was...
The Senate Banking, Housing and Urban Affairs Committee approved a Republican regulatory relief bill on a strictly partisan vote late this week, with all of the mortgage-finance provisions previously reported intact. Sen. Pat Toomey, R-PA, momentarily offered Fannie Mae and Freddie Mac a “get out of jail free” card, in the form of an amendment addressing capital requirements for the two government-sponsored enterprises, then withdrew it, presumably for use at a future point in time. “This is...
Industry participants, both on their own and with help from the Treasury Department, continue to work on reforms to attract investors to buy new non-agency MBS. Servicing standards will likely play a key role in the reforms, though progress has been slow. The Structured Finance Industry Group published its first RMBS 3.0 “green paper” in August 2014 with a follow-up in November. The Treasury Department has been working with industry participants toward the issuance of a benchmark non-agency MBS since at least September 2014. Analysts at Fitch Ratings stressed...
Issuance of conduit commercial MBS has been significantly lower than expected this year, according to Bank of America Merrill Lynch. Some of the expected volume appears to have shifted to single-asset deals, while a number of investor-related factors have also likely limited issuance. BAML expected $85.0 billion in conduit commercial MBS to be issued this year, a nearly 50 percent increase compared with 2014. However, just $23.0 billion in conduit commercial MBS had been issued this year through mid-May, suggesting that volume might stay level compared with 2014. A number of factors have shifted...
Nomura Holdings Inc. is mulling an appeal following last week’s court order that it, along with RBS Securities, pay Fannie Mae and Freddie Mac a total of $805.1 million to resolve claims arising from the pre-crisis sale of non-agency MBS to the government-sponsored enterprises. Judge Denise Cote of the U.S. District Court for the Southern District of New York rendered the judgment May 11 after a three-week bench trial in which she found Nomura and RBS liable for the claims brought by the Federal Housing Finance Agency. The MBS were backed by mortgages with an unpaid principal balance of about $2.05 billion at the time of purchase. Nomura and RBS, which underwrote four of the seven MBS deals at issue, provided...
The Senate Banking, Housing and Urban Affairs Committee this week passed the Financial Regulatory Improvement Act of 2015 by a 12 to 10 margin along party lines. The measure, introduced by committee Chairman Richard Shelby, R-AL, includes a number of GSE provisions. Title VII of the bill prohibits the use of increases in Fannie Mae and Freddie Mac guaranty fees to offset outlays or reductions in revenues for “any purpose other than enterprise business functions or housing finance reform as passed by the Congress in the future.” The bill was approved by the Senate Banking, Housing and Urban Affairs Committee. Another provision would prohibit the U.S. Treasury from selling or...
The Federal Housing Finance Agency this week unveiled final eligibility rules for nonbank servicers, codifying minimum capital and liquidity ratios for the industry along with a host of standards that owners of servicing rights must meet. All the requirements take effect December 31 of this year. In particular, the mandates, on the surface, might look burdensome to smaller shops that aren’t used to extensive audit requirements pressed upon them by Fannie Mae and Freddie Mac. The surveillance and “best practices” guidelines cover a host of areas, including such things as servicing transfers, and how the servicer (or servicing agent) manages its call center. Smaller shops, to some extent, are thrown a bone in the final rules.
The Federal Home Loan Bank system earned $1.015 billion in the first quarter of 2015, according to figures compiled by the system’s Office of Finance, an 82.6 percent increase when compared to the same quarter in 2014. The sharp increase was primarily the result of higher gains on litigation settlements, according to the Office of Finance. Litigation settlements accounted for $480 million in gains for the three months ending on March 31. The OF said the bulk of it was “driven by the FHLBank of San Francisco’s $450 million settlement of certain claims arising from investments in private-label mortgage-backed securities.” Total FHLBank assets for the first three months of the year were down at $879.9 billion, a 3.7 percent decrease from...
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