Cart

Inside MBS & ABS

July 7, 2017

View Archived Issues

Overall MBS/ABS Production Faltered Slightly In 2Q17, But Issuance Was Up in Some Sectors

The MBS and ABS market was a mixed bag in terms of new issuance during the second quarter, as overall production was down slightly from the beginning of the year, according to a new analysis by Inside MBS & ABS. A total of $430.98 billion of single-family MBS, non-mortgage ABS and commercial-property securitizations was issued in the second quarter, down 2.6 percent from the first three months of the year. That pushed year-to-date issuance to $873.47 billion, up 8.1 percent from the first six months of 2016. Single-family MBS accounted for a hefty 75.1 percent of total issuance so far in 2017, with non-mortgage ABS (13.2 percent) and commercial MBS (11.7 percent) making up the rest. But single-family turned...[Includes three data tables] Read More

Impact of End-of-Quarter Dip in Interest Rates On Fannie/Freddie Hedges Yet to Be Revealed

At the end of July, Fannie Mae and Freddie Mac will report second quarter results that might be marred – at least a little bit – by non-cash hedging charges caused by lower interest rates. When June ended, the benchmark 10-year Treasury bond carried a yield of 2.30 percent, 10 basis points lower than at March 31. Lower rates usually translate into hedging markdowns, but since the decline was so small it’s unlikely that either government-sponsored enterprise will record a net accounting loss for the period. In general, the two don’t discuss... Read More

After a Significant Lull, Credit Suisse Returns to Non-Agency MBS Market with a Flurry of Deals

Near the end of the second quarter, Credit Suisse resumed its activity in the non-agency MBS market after a lengthy pause. In May, the investment bank unveiled a $91.18 million deal backed by seasoned FHA loans. That was followed by a $393.97 million issuance backed by seasoned mortgages at the end of June. Credit Suisse marked its return to the jumbo MBS market in June – not as an issuer but as a depositor – lending its shelf registration to American International Group for a $511.98 million MBS. The bank faced... Read More

Fed Governor Views Housing-Finance Reform as ‘Now or Never,’ Opposes Reliance on a Duopoly

Federal Reserve Governor Jay Powell urged lawmakers to figure out a solution to the extended conservatorships of Fannie Mae and Freddie Mac, noting that a healthy economy and the risk to taxpayers make now an ideal time to act. In a speech this week at the American Enterprise Institute, Powell noted that the two government-sponsored enterprises are now in their ninth year of conservatorship. He worries that if reform doesn’t happen soon it may not happen at all. Powell said any change would be more challenging to enact during difficult economic times. “The risk that we settle into this current situation for the long run is... Read More

Market for ABS Tied to Marine Containers Now on The Rise After Minimal Issuance in 2015 and 2016

Issuance of ABS backed by proceeds from marine container leases has increased significantly this year, with five deals pricing between March and June. The sector was relatively strong in 2013 and 2014, but only two deals were issued in 2015 and only one last year. “With global container trade volumes showing an increase and steel prices up from their lows, prospects for marine shipping container lessors may be brightening following a challenging period,” according to analysts at DBRS. Cash flows for container ABS generally depend... Read More

Another GSE Shareholder Case Filed; Recently Filed Cases Challenge Agency’s Structure

More Fannie Mae and Freddie Mac shareholders are arguing that the structure of the Federal Housing Finance Agency is unconstitutional and are calling for courts to vacate the third amendment that sweeps the profits of the mortgage giants into the Treasury Department. Within the past month, two new cases have been introduced in Michigan and Minnesota, likely piggybacking on last year’s decision in which the single-director structure of the Consumer Financial Protection Bureau was found to be unconstitutional. Several shareholders of the government-sponsored enterprises filed... Read More

PennyMac Alters Repo Pact with Credit Suisse to Increase Funding Capacity for New Loans, MSRs

PennyMac and Credit Suisse are revising two master mortgage repurchase agreements to increase the lender’s funding capacity for new loan originations and purchases of mortgage servicing rights, the company disclosed in a recent filing with the Securities and Exchange Commission. In June, PennyMac agreed to revised terms of its master purchase agreement to increase temporarily the maximum committed purchase price to $943 million from $700 million. The amended agreement allows... Read More

Wells Fargo Withholds MBS Recovery Funds; HSBC In Settlement Talks; WI Court Favors Countrywide

Wells Fargo is defending last week’s decision to hold back more than $90 million from investors attempting to recoup losses from legacy single-family MBS. The bank said it withheld distribution of reserve amounts to the plaintiffs in the 2014 trustee lawsuit “when certain RMBS transactions were liquidated at another party’s direction.” A Bloomberg report said New Residential Investment Corp. exercised its cleanup buyback option to reduce its own administrative expenses. “Cleanup buyback” refers to early redemption of the remaining issue amount by the seller when the principal has been paid down to an insignificant amount. In a statement, Wells Fargo explained... Read More

Latest Imf News

More Imf News

Featured Data

More Featured Data

Featured Reports

More Latest Reports

Featured Poll

As homeowner equity continues to build, more and more lenders are launching home equity lending products. Are you thinking of joining this market?

View Results