“Before a loan closes there will need to be [property] reinspections,” said Pete Mills, senior vice president of residential policy and member engagement for MBA.
Pollock criticized the Treasury Department’s decision to pay off $13.5 billion of subordinate GSE debt at the start of the conservatorships nine years ago...
The Treasury Department should not bail out the GSEs’ subordinated debt again, according to Alex Pollock, senior fellow at the R Street Institute. He criticized the Treasury’s decision to pay off $13.5 billion in subordinate debt at the start of the conservatorship nine years ago and said that it created a lack of market discipline. “Instead of experiencing losses to which subordinated lenders can be exposed when the borrower fails, they got every penny of scheduled payments on time,” he said, calling the structural reason for bailing out the subordinated debt an “unusual occurrence.” The former head of the Federal Home Loan Bank of Chicago noted that the role of subordinated debt is...
Investors in Fannie Mae and Freddie Mac continue to grow weary of the drawn out discovery process in shareholder lawsuits and recently filed another motion in hopes of expediting things. Fairholme Funds attorneys filed a motion last week asking to view about 1,500 government documents in a lawsuit challenging the government’s net-worth sweep of profits at Fannie and Freddie. In the new motion, the Fairholme attorneys asked the Federal Claims Court to use the “quick peek” procedure for some documents dating back to May 2012. These are among the many documents the plaintiffs say the government is still hoping to keep secret under the deliberative process and bank examination privileges.
Commercial banks and savings institutions have been steadily adding to their residential MBS portfolios, but they show significantly less interest in the non-mortgage ABS market. Total bank investment in non-mortgage ABS sank again in the second quarter, dropping by $5.05 billion from the end of March to $118.38 billion. Compared to a year ago, bank ABS holdings were down 9.6 percent and they’ve been in steady decline since the end of 2013. It’s...[Includes two data tables]
The Structured Finance Industry Group pushed for trustees of non-agency MBS to increase disclosures to investors as the industry continues to deal with the aftermath of Wells Fargo withholding millions of dollars of funds in vintage deals. In a statement released late last week, the industry group said it has a policy of not engaging in issues involving legacy transactions that may be associated with litigation, especially where such litigation is between various members of SFIG. The Wall Street group issued...
Real estate investment trusts that invest in MBS and other mortgage-related assets are having a field day this year, raising billions of dollars in new capital while seeing their share prices increase across the board. Moreover, according to an analysis by Inside MBS & ABS, several top-ranked REITs are now trading much closer to their 52-week highs than their lows while maintaining hefty dividend payments to their shareholders. Annaly Capital Management, for example, the largest holder of agency MBS at $75.2 billion, is...
The commercial MBS market is facing a new challenge as questions have been raised about the “true sale” treatment of these transactions under generally accepted accounting principles. The issue arises from risk-retention requirements that went into effect in late 2016. “Failure of accounting sale treatment means the selling bank cannot book the gain and does not derecognize the underlying loans resulting in the entire portfolio of loans remaining on its balance sheet for both GAAP and presumably, for risk based capital purposes,” according to the Dechert law firm. In order to benefit from an accounting true sale, each third-party holder of a beneficial interest in the securitization must have...
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