Fitch Ratings has consolidated a number of key rating drivers into updated master rating criteria for residential MBS backed by newly originated and seasoned residential mortgages. The latest report replaces the July 2013 RMBS criteria, and while no material changes have been made to the overarching process, a few tweaks have been made. The important rating drivers that were incorporated include...
Real estate investment trusts that have been gobbling up MBS the past few years – and paying hefty dividends in the process – may have some more room to run, especially if interest rates remain relatively benign. “Given the tailwinds of lower prepayment speeds and Fed purchases, we believe that payout levels should remain stable in the near term,” said one veteran analyst who works for a top five bank. This analyst, who tracks several large REITs that invest in agency securities, added...
The Securities Industry and Financial Markets Association has called upon federal financial institutions and consumer protection regulators to form an interagency working group to establish joint, uniform diversity standards for the financial services industry. The standards would implement a requirement of the Dodd-Frank Act for consistent, uniform rules to assess the diversity policies and practices of financial institutions. The rules would also spell out criteria and procedures for determining whether a contractor or subcontractor has made a “good-faith effort” to include minorities and women in its workforce. Several of the agencies jointly proposed...
The Federal Reserve has released action plans for Goldman Sachs and Morgan Stanley to correct deficiencies in the firms’ risk management procedures for third-party mortgage servicers. The plans were a requirement under enforcement actions issued by the Fed and the Office of the Comptroller of the Currency between April 2011 and April 2012 against 16 mortgage servicers, including Goldman Sachs and Morgan Stanley. The servicers came under scrutiny for deficient servicing practices and foreclosure procedures, and later settled with the government. Morgan Stanley’s regulatory action plan supplements...
The six lawsuits filed in June by institutional investors against non-agency MBS trustees are just the beginning of actions against trustees, according to an attorney who has pursued representation-and-warranty claims against non-agency MBS issuers. “We are likely to see a flood of litigation against trustees alleging that the banks sat on their hands and blew the statute of limitations on valuable putback claims,” according to Isaac Gradman, an attorney at Perry Johnson Anderson Miller & Moskowitz. The June lawsuits by BlackRock, PIMCO and other institutional investors targeted...
“We’ve got approximately $72 million [of HARP refinance business that can be done] in this metropolitan area," said FHFA director Mel Watt about Chicago. "People won’t come in and say I want that money.”
New GSE repurchase requirements are now in effect, including the “MI stand-in” option, which Fannie defines as “the full mortgage insurance benefit that would have been payable under the original mortgage insurance policy if the mortgage loan liquidates.”
We know of some veteran mortgage bankers who believe the “fix and flip” housing market is getting overheated. One lender told us he fears a severe correction could hit California…
An industry that is used to reading about MERS’ court victories was stunned last week after a federal court judge in Pennsylvania found Merscorp Inc. and its electronic mortgage registry system in violation of state recording laws for real estate properties. While the ruling by U.S. District Court Judge J. Curtis Joyner may be appealed, MERS could be held liable for its role as an “agent” for member-lenders involved in property transfers and for alleged unjust enrichment, according to legal experts. The case was brought...
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