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Volume 2014 - Number 20

May 23, 2014

Payment Disruption on Non-Agency MBS After Servicing Transfers from Banks to Nonbanks an Ongoing Concern

The advance policies of nonbank servicers have led to disruptions in payments to investors in non-agency MBS following servicing transfers from banks, according to Fitch Ratings. The differences are particularly pronounced on jumbo and Alt A deals, with advance disruptions recently concentrated on MBS previously serviced by Bank of America. “Bank and nonbank servicers for residential MBS transactions typically follow the same general advancing guidelines,” Fitch noted. “However, nonbank servicers generally make the determination to stop advancing earlier than bank servicers.” On average, for jumbo MBS and Alt A MBS, nonbanks advance missed...

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This weekly covers the secondary mortgage market, including mortgage-backed securities and asset-backed securities.



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