MBS investors have been enjoying a nice little rally of late thanks to what analysts call “geopolitical” concerns, namely the conflicts in Ukraine and the Middle East. But how much further will bond prices rise and rates fall? It all depends on whom you ask. “We’ll see 2 percent on the long bond before 3 percent,” said Christopher Whalen, senior managing director of Kroll Bond Rating Agency. Over the past few weeks, MBS prices – based on the Fannie Mae 3.5 percent coupon – have neared...
The gradual slowdown in agency MBS purchases by the Federal Reserve helped real estate investment trusts grow their MBS portfolios during the second quarter of 2014. A new Inside MBS & ABS analysis of REIT earnings reports found that the industry held $286.3 billion of MBS as of the end of June. That was up 9.7 percent from the previous quarter and marked the first increase in REIT MBS holdings since the third quarter of 2012, when the aggregate industry portfolio was $374.2 billion. At the top of the sector, Annaly Capital Management reported...
The Federal Housing Finance Agency should act now to slowly increase Fannie Mae’s and Freddie Mac’s guaranty fees, according to the Securities Industry and Financial Markets Association. SIFMA’s tempered support of a proposed government-sponsored enterprise g-fee increase runs contrary to the position held by much of the rest of the industry – that now is not the time. “We encourage...
The Department of Justice recently subpoenaed GM Financial and Santander Consumer USA, two of the largest subprime auto ABS issuers in the U.S., over concerns about their subprime auto lending and securitization operations, the two companies recently revealed. The developments suggest that such regulatory scrutiny of the sector in the wake of the financial crisis is intensifying, market participants and policy analysts say. Whether that will pose a substantial risk to other lenders remains to be seen. GM Financial announced...
We only bring up the “going private” issue because class action attorneys have finally woken up to the fact that Ocwen’s shares have been clobbered over the past year...
Trustee responsibilities, the role of the government-sponsored enterprises, deal documentation, loan-level disclosures, servicing, ratings, assignee liability, regulatory uncertainty, lien priority, bondholder communication and incentives for banks. These are just a few of the issues that need to be addressed for non-agency MBS issuance to resume in a meaningful manner, according to industry participants. About 25 comment letters were submitted after a request from the Treasury ...
The list of lenders preparing to offer loans that don’t meet qualified mortgage standards continues to grow. Most recently, a number of nonbanks have expressed interest in the non-QM sector, looking for a different business model than the banks that are holding non-QMs in portfolio. New Penn Financial rolled out its non-QM offerings this week. The wholesale “Home Buyer Power” product allows for debt-to-income ratios up to 55 percent and interest-only options, along with ...
The Consumer Financial Protection Bureau’s ability-to-repay requirements and standards for qualified mortgages have reduced originations of jumbo purchase-mortgages, according to 50.7 percent of the 67 bank jumbo lenders recently surveyed by the Federal Reserve. An Inside Nonconforming Markets analysis of the survey results reveals that the major impediments to originations are income verification requirements and ... [Includes one data chart]
FHA Commissioner Carol Galante has announced plans to step down from her current post, leaving behind a Mutual Mortgage Insurance Fund that appears well on its way to recovery and a slumping FHA business. Industry response to Galante’s Aug. 12 announcement was mixed. Some stakeholders applauded her toughness and resolve in steering FHA through hard times, while others criticized her for policies that made it more difficult and costly for first-time homebuyers to obtain an FHA-insured mortgage loan. Galante’s nearly three-and-a-half year stint as FHA commissioner was highlighted by her efforts to stabilize the FHA’s ailing Mutual Mortgage Insurance Fund, reduce losses and improve lender oversight. She achieved these goals by creating a comprehensive risk-management structure at FHA, revamping FHA pricing and credit policies, and ...
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