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Inside MBS & ABS

July 7, 2006

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Mortgage Securitization Volume Squeaks Ahead In Second Quarter, ABS Market Rebounds

The pace of new mortgage-securities issuance lurched ahead slightly in the second quarter, sending 2006 production over the $1 trillion mark at the halfway point of the year, according to a new market analysis by Inside MBS & ABS. While the non-agency MBS arena continued to lead the way, both Fannie Mae and Ginnie Mae posted solid gains in volume during the quarter, and the non-mortgage ABS market enjoyed a big bump in new issuance. … [Two data tables included] Read More

Fannie’s Mudd Reports Low Interest Rate Risk, Strong Investor Demand, Rebuilding Private MI Relationships

While it continues to face no shortage of internal and external challenges, Fannie Mae is reporting positive business developments ranging from low interest rate risk to strong investor demand and improved relationships with mortgage insurers. In a conference call with Wall Street analysts this week, Fannie CEO Daniel Mudd said the government-sponsored enterprise has kept a close handle on interest-rate risk in a market where rates have risen steadily. “Portfolio duration remains well within our… Read More

As Effects of Housing Slowdown Begin to be Felt, Investors Should Consider Equity-Rich MBS

With the housing slowdown and most of the mortgage-backed securities market trading at a discount to par, investors should consider placing their money in MBS backed by “traditionally qualified, equity-rich” borrowers, according to Bear Stearns latest analysis of short-term prepayment rates. In the last few years, nontraditional mortgages with high LTVs and low FICO scores, interest-only loans, and piggyback loans have prepaid faster than traditional low-LTV, amortizing loans, Bear Stearns analysts in “The New… Read More

Freddie Aims to Be More Competitive by Providing Monthly Loan Level Updates on Single-Family Mortgage PC Securities

In a bid to expand its capabilities and competitiveness in the marketplace – and perhaps regain market share from rival Fannie Mae – Freddie Mac plans to provide monthly loan-level updates on its single-family mortgage PC securities issued in 2006, beginning in August. The decision “illustrates our continued commitment to providing the market transparent disclosures on our mortgage-backed securities,” said Phil Guth, Freddie’s vice president for mortgage securitization. Freddie says the updates will give… Read More

Agency-Backed CMO Market Keeps Growing In 2006, Green-wich Takes Lead in Underwriting

Issuance of new structured mortgage securities backed by agency pass-throughs boomed during the second quarter, according to a new analysis and ranking by Inside MBS & ABS. A total of $86.17 billion of agency-backed REMICs were issued during the second quarter, up 34.4 percent from the first three months of the year. That brought year-to-date issuance in the sector to $152.01 billion, an increase of 6.4 percent from the same period in 2005. … [One data table included] Read More

BMA Announces Publication of Revised Rules on MBS Buy-Ins

Beginning July 6, newly revised mortgage-backed securities buy-in procedures will be available to broker-dealers to use to clean up “fails,” a term for when a customer does not deliver securities by the settlement of a trade. The Bond Market Association announced the revised procedures this week, culminating a two-year review of its MBS Buy-In Procedures. The BMA procedures contain common industry practice and, although compliance is voluntary, they have been widely used as a… Read More

Bank ABS Holdings Climb in Early 2006, State Street Tops the Ranking

Commercial banks held $82.10 billion of asset-backed securities as of the end of the first quarter, according to the Federal Deposit Insurance Corp., which includes deals backed by home-equity lines of credit – but not subprime first-lien mortgages – in its ABS definition. That was up from $69.47 billion in bank ABS holdings at the end of 2005, and $75.11 billion back in the first quarter of last year. Bank investment in ABS peaked back… [One data table included] Read More

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