A new source of risk for residential MBS has emerged in the wake of Wells Fargo’s recent decision to hold back significant funds from MBS transactions to cover potential litigation expenses resulting from investor claims. In its latest report, Moody’s Investors Service warned that trustee holdbacks, such as Wells Fargo’s action, have a negative effect on the MBS transactions. Such actions reduce, at least temporarily, the funds available to pay interest and principal to bondholders, the rating agency said. Last month, Wells Fargo notified...
The Federal Reserve’s effort to normalize its balance sheet later this year would cause no significant falloff in the agency mortgage-backed securities market over the next six to 12 months, according to global investment firm Loomis Sayles. In an analysis, the firm concluded that agency MBS remain attractive for now with modest excess returns for agency MBS versus Treasurys. “We favor a modest overweight agency MBS stance versus Treasurys for the remainder of 2017 and ...
While policymakers in Washington, DC, are paying renewed attention to housing-finance reform, some industry representatives took advantage of the opportunity provided by a related hearing on Capitol Hill to also urge changes be made to a number of the mortgage-related rules promulgated in recent years by the Consumer Financial Protection Bureau. Bond giant PIMCO issued a report that called for a handful of key revisions to the mortgage regulatory landscape before any reform of Fannie Mae and Freddie Mac is undertaken. “To bring capital back to the private mortgage market and ensure credit is extended...
The Consumer Financial Protection Bureau plans to make some significant, but as yet unspecified, changes to its mortgage servicing rule sometime this fall, in response to concerns raised by the industry, the bureau revealed in a blog posting about its latest semiannual rulemaking agenda. The agency said it is “considering concerns raised by industry participants regarding a few substantive aspects of the mortgage servicing rule that we used in August 2016. These aspects may be posing particular complexities for implementation that were not anticipated in the course of the original rulemaking. We expect to issue a proposal to make one or more substantive changes to the rule in response to these concerns this fall – perhaps as early as September.” Edward Mills, an analyst with FBR Capital Markets & Co., said...
The U.S. House of Representatives is scheduled to vote Tuesday afternoon on whether to overturn the Consumer Financial Protection Bureau’s controversial arbitration rule.
A sharp increase in business-finance ABS issuance offset declines in other sectors to lift overall ABS production during the second quarter of 2017, according to a new Inside MBS & ABS analysis and ranking. The market produced $59.31 billion of new non-mortgage ABS during the second quarter, an 11.1 percent increase over the first three months of the year. That brought year-to-date issuance up to $112.68 billion, a 30.4 percent gain over the first six months of 2016. The star performer was...[Includes two data tables]
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