Investors are comfortable with broad swaths of the structured finance market and issuers are cautiously optimistic that regulators won’t hinder activity too much going forward, according to attendees at the ABS East conference produced by Information Management Network this week in Miami Beach. “We’re in a pretty good spot right now in the market from a supply-demand perspective,” said Bob Behal, a principal and co-head of ABS investments and commercial MBS investments at Vanguard Group. Almost 3,700 people had registered by the start of the conference, up slightly from around 3,500 people in 2013. Will Zak, a director at Barclays, said...
With new issuance faltering in 2014, the net supply of residential MBS in the market declined by 0.3 percent during the second quarter of 2014, according to a new Inside MBS & ABS analysis. MBS outstanding totaled $6.348 trillion at the end of June, wiping out gains made in the second half of last year. It was the lowest MBS outstanding number since 2006. The agency MBS market grew...[Includes three data charts]
The Treasury Department is working on at least two initiatives aimed at boosting issuance of non-agency mortgage-backed securities, following more than four years of industry-driven reform efforts that haven’t attracted enough attention from investors. “The private-label securities market is virtually dormant,” Olga Gorodetsky, a senior policy advisor at the Treasury, said this week at the ABS East conference produced by Information Management Network in Miami Beach. The Treasury is considering working with ...
A number of steps have been taken to reform the non-agency mortgage-backed security market but more changes are necessary, according to Michael Stegman, counselor on housing finance policy to the Treasury Department. Last week at a conference hosted by the Bipartisan Policy Center, Stegman detailed regulatory changes necessary to increase activity in the non-agency MBS market along with other changes the industry can work toward. “The last remaining piece of the puzzle is putting in place ...
There’s plenty of consumer demand for loans that don’t meet the standards for qualified mortgages, according to industry participants. But more than a year after the Consumer Financial Protection Bureau established standards for non-QMs, lenders and investors are still trying to determine the liability posed by the mortgages. Jay Lown, president of Cherry Hill Mortgage Investment, a real estate investment trust managed by Stan Middleman, chairman and CEO of Freedom Mortgage, said Freedom is ...
Originations of higher-priced mortgages increased significantly in 2013 compared with the previous year, according to an Inside Nonconforming Markets analysis of Home Mortgage Disclosure Act data released this week. The market share for higher-priced mortgages also more than doubled in 2013 compared with the previous year, but the loans continue to account for a small portion of total originations. Some $35.18 billion in higher-priced mortgages were sold in 2013, up from ... [Includes one data chart]
Ginnie Mae has unveiled new plans for issuer standards as well as steps to boost liquidity in the mortgage servicing rights (MSR) market. Agency officials at a summit hosted by Ginnie Mae this week in Washington, DC, said both actions are designed to avoid issuer failures and to preserve residential mortgage servicing as an economically viable activity and MSRs as an attractive asset class. The officials said changes will be made to Ginnie’s mortgage-backed securities program to support the agency’s transformation from a pre-crisis bank-driven government MBS program to a post-crisis program where non-depositories and smaller financial institutions play a much bigger role. By the middle of next year, approximately a third of Ginnie MSRs will have changed hands over the previous four years, agency officials said. Many of the new owners of the servicing rights are ...
Approved issuers must ensure that loans have the requisite federal insurance or guarantee before bundling them for securitization, cautioned Ginnie Mae. Loans that fail Ginnie’s “loan matching” review will be tagged as “uninsured” and will not be accepted for securitization, according to John Kozak, a Ginnie Mae account executive and a panelist at a conference sponsored by the agency this week. Ginnie Mae uses loan matching to screen for mortgages that may have been endorsed on paper but have not been actually insured or guaranteed by either the FHA, VA or the Department of Agriculture’s Rural Housing Development. Every month, Ginnie Mae takes a certain lender’s entire mortgage portfolio and throws it up against the agency’s insured/guaranteed database in search for loan mismatches. To do this, the agency uses “two-string match” criteria, which consist of a ...
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