Money market funds held some $114.16 billion of Fannie Mae and Freddie Mac debt as of the end of August, a 3.0 percent increase from the end of last year, according to a new Inside MBS & ABS analysis of data compiled by the Office of Financial Research. But new regulations have spurred a migration from prime money market funds into government funds, said the OFR, a unit of the U.S. Department of Treasury. The shift from prime to government funds reflects new Securities and Exchange Commission rules aimed at making prime funds less vulnerable to investor runs, OFR analysts explained in a recent research brief. Although the new SEC requirements don’t become mandatory until Oct. 14, 2016, fund managers began...[Includes one data table]
As recently as three years ago, few companies were willing to finance originations of nonprime mortgages, either via warehouse funding or acquiring the paper as whole loans. Daniel Perl, CEO of Citadel Servicing, said there are currently a number of Wall Street companies and other firms that will provide a certain amount of liquidity for one to three years, while demand for whole loans and MBS is also increasing. “There’s a lot to be said for this market today that you couldn’t say three years ago,” he said earlier this month during a webinar hosted by Inside Mortgage Finance. Tom Hutchens, a senior vice president of sales and marketing at Angel Oak Mortgage Solutions, said...
A boom in ABS backed by unsecured consumer loans requires closer scrutiny, according to analysts at Fitch Ratings. Marketplace lenders have boosted the issuance of such ABS in recent years, though the rating service warned that deal performance is difficult to predict. “Many firms in this space have legitimate value propositions and apparent technological advantages,” Fitch said. “However, they have yet to prove their underwriting merit.” Since September 2013, at least 31 ABS totaling $4.60 billion backed by consumer loans from marketplace lenders have been issued...
Fitch Ratings was the most active rating service in the sluggish non-agency MBS market through the first half of 2016, according to a new Inside MBS & ABS ranking. Standard & Poor’s was the top rating agency in the more active non-mortgage ABS market. Fitch rated just seven non-agency MBS issued during the first six months of the year, which totaled $4.74 billion in volume. While that equaled 30.9 percent of total non-agency MBS issuance for the period, many deals were private placements without ratings. Fitch’s share of rated issuance was 55.4 percent. DBRS ranked...[Includes two data tables]
The scratch-and-dent market for residential loans that have TRID-related errors is still alive and (mostly) well, even though originators have had almost a year to adjust to the new disclosure regime introduced by the Consumer Financial Protection Bureau. “This market will never be exhausted,” said Jeff Bode, chairman and CEO of Mid America Mortgage, Addison, TX, one of the most active buyers of mortgages that have errors related to consumer disclosures tied to the Truth in Lending Act and the Real Estate Settlement Procedures Act. Of course, it’s...
A strong tide of refinance activity lifted mortgage origination volume in 2015, according to a new Inside Mortgage Trends analysis of Home Mortgage Disclosure Act data released late this week by federal regulators. Aggregate national data released by the Federal Financial Institutions Examination Council show a total of $1.651 trillion in first-lien mortgage originations for home purchase and refinance. That was up 32.9 percent from 2014 but failed to ... [Includes one data chart]
Cybersecurity rules proposed by the New York Department of Financial Services this month are seen as the first of their kind from a state regulator and more prescriptive than guidance from the Federal Financial Institutions Examination Council. The proposed standards would apply to a wide range of companies regulated by New York, including mortgage lenders and servicers. Under the proposal, financial institutions would be required to establish a cybersecurity program ...
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