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Inside MBS & ABS

April 28, 2006

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Home-Equity Securitization Volume Slips from Fourth Quarter’s Record Level; Seconds Play a Bigger Role

New issuance of home-equity loan MBS cooled off a bit in the first quarter of 2006, but a growing supply of second-lien products helped sustain the market at historically high levels, according to the Inside Mortgage Finance MBS Database. A total of $139.78 billion of home-equity securities were issued in the first three months of the year, down 8 percent from the record $152.41 billion generated during the fourth quarter of 2005. In fact, the… [One data table included] Read More

Despite Industry Efforts, Assignee Liability Shows Little Sign of Abating, Attorneys Warn

Despite the secondary market’s efforts to insulate loan buyers and assignees from legislation designed to crack down on abusive lending, the issue of assignee liability appears to be alive and well in the mortgage market. That was the main message that emerged from last week’s audio conference on predatory lending sponsored by Inside Mortgage Finance Publications. Participants heard talk of a market with few bright lines that can guide compliance efforts as state regulators… Read More

Fannie’s New ‘Benchmark REMIC’ Eyes Overseas Investors to Bring More Capital to U.S. Housing

More international investors may be interested in buying Fannie Mae mortgage securities thanks to a new Benchmark REMIC program the government-sponsored enterprise has set up. The program is similar to the successful Reference REMIC launched a year ago by rival Freddie Mac. Fannie’s Benchmark REMIC features “a guaranteed final maturity, increased transparency and liquidity, and relative value opportunities versus comparable securities such as agency collateralized mortgage obligations,” according to a Credit Suisse analysis. … Read More

Some Servicers Finding Reg. AB Regime a Bumpy Ride as Issuers Wield Big Stick of Termination

Servicers of loans backing non-agency MBS and other asset-backed securities are dealing with some harsh realities in the new world created by Regulation AB, a sweeping disclosure regime. The challenges confronting servicers in the post-Reg. AB world have been a major topic of discussion at industry conferences for more than a year. Because the rule requires that issuers divulge detailed performance information about the collateral backing their deals, servicers have been under pressure to provide… Read More

Davidson Jettisons Hybrid ARM Valuations, Creates New, More Reliable Prepay Index

Davidson & Co. is changing how it values hybrid ARMs. Although this is not an overhaul of the firm’s popular prepayment models, it will have a big effect, reported Alex Levin, Davidson’s valuation modeler. The company does plan to launch a new prepayment model later this year. Levin created the firm’s current model using an index based on balloon mortgage data gleaned from histories created by Bloomberg. Every Davidson prepay model relies on a particular… Read More

U.S. Bank Climbs into First Place in Non-Agency MBS Trustee Ranking, BNY Leads in ABS

U.S. Bank racked up the most business in indenture trustee assignments in the non-agency MBS market, according to a new ranking based on the Inside Mortgage Finance MBS Database. Bank of New York remained the top trustee in the non-mortgage ABS market. U.S. Bank was named indenture trustee on some $91.9 billion on non-agency MBS issued during the first quarter, or 32 percent of the market (see next page). The company was especially dominant… [One data table included] Read More

Freddie Posted Strong Portfolio Growth in March; Fannie Spent More Time on Sideline

Freddie Mac was more aggressive than its rival Fannie Mae in building up its retained portfolio and issuing new MBS during the first quarter of 2006. With a burst in March, Freddie increased its investment portfolio to a record $715.4 billion. In a shift from recent trends, the government-sponsored enterprise turned more toward its own mortgage securities than those available in the non-agency market. … [One data table included] Read More

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