Commercial mortgage securitization – including non-agency commercial MBS and multifamily securitizations by Fannie Mae, Freddie Mac and Ginnie Mae – declined by 22.1 percent in the first quarter of 2014.

A total of $32.6 billion of income-property mortgages were securitized during the first three months of 2014, a soft beginning for a market that posted its best year since the financial collapse during 2013. Commercial mortgage securitization – including non-agency commercial MBS and multifamily securitizations by Fannie Mae, Freddie Mac and Ginnie Mae – declined by 22.1 percent in the first quarter of 2014. Total issuance was off 30.4 percent from the same period last year. Both agency and non-agency issuance was...[Includes two data charts]

Passage of legislation from Sens. Tim Johnson, D-SD, and Mike Crapo, R-ID, to reform the government-sponsored enterprises would prompt some changes to the multifamily MBS market, according to industry analysts. While the bill’s impact on the multifamily market is expected to be modest overall, according to Moody’s Investors Service, the pricing advantages seen on multifamily MBS from Fannie Mae and Freddie Mac compared with non-agency commercial MBS would likely disappear. The Johnson-Crapo bill, which is scheduled for a markup next week by the Senate Committee on Banking, Housing, and Urban Affairs, calls for risk-sharing structures in the multifamily market already used by Fannie Mae and Freddie Mac for multifamily MBS, potentially limiting any broad disruptive impact to the multifamily market from the bill. Within one year after the bill becomes law, Fannie and Freddie would be required...

Government-sponsored enterprises Fannie Mae and Freddie Mac are off to a solid start to the year in terms of their multifamily business in what is expected to be a more competitive year in 2014 than the market saw last year. Whether they can match last year’s levels is an open question. Fannie issued...[Includes one data chart]

The Federal Housing Finance Agency ordered the two GSEs to sell at least 5 percent of their “less-liquid” mortgage assets, meaning whole loans and non-agency securities. CMBS are arguably the most liquid of these.

Issuance of agency and non-agency commercial MBS increased 13.5 percent in 2013, according to a new analysis by Inside MBS & ABS, although production dropped sharply in the fourth quarter. Industry participants expect that volume will continue to grow as investor demand for commercial MBS remains strong despite some loosening of underwriting standards. Ken Cheng, a managing director at Morningstar Credit Ratings, said...[Includes one data chart]

Industry participants expect that volume will continue to grow as investor demand for commercial MBS remains strong despite some loosening of underwriting standards.

A number of structured-finance products outside of new non-agency MBS rebounded from the financial crisis, offering stronger returns than new non-agency MBS, and often with less risk. Among the myriad of products investors at the ABS Vegas conference last week said they prefer to new non-agency MBS were collateralized-debt obligations backed by trust-preferred securities, collateralized-loan obligations, commercial MBS, rail car ABS and container ABS. “There’s...

Besides Freddie Mac and FHA, the three other main competitors for Fannie in the multifamily sector are life insurance companies, banks and conduit lending programs.

Fannie Mae and Freddie Mac are likely to find the multifamily MBS space to be noticeably more competitive this year as increasing levels of private capital respond to improving market conditions, one top government-sponsored enterprise official suggests. One of the most influential factors that will determine how much volume the GSEs do in multifamily will be “more competition in the market in 2014 than we saw in 2013,” thanks to increasing levels of private capital, according to Manny Menendez, senior vice president of multifamily capital markets and pricing for Fannie. Besides Freddie and FHA, the three other main competitors for Fannie in the sector are...