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Inside MBS & ABS

July 14, 2006

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Non-Agency MBS Market Rallies in Second Quarter, Hits Third Highest Volume Ever

The non-agency MBS market rebounded strongly from a somewhat sluggish opening quarter in 2006, with new issuance climbing 6.0 percent during the second quarter, according to a new market analysis and ranking based on the Inside Mortgage Finance MBS Database. New production of non-agency MBS topped the $300 billion mark during the second quarter, making it only the third time the market has hit that volume during a three-month period. That brought year-to-date issuance to… [Three data tables included] Read More

Deutsche Buy of MortgageIT Platform Continues Investment Bank ‘Vertical’ Integration Trend

Wall Street’s push into the mortgage origination market continued in earnest this week, with Deutsche Bank’s announcement of an agreement to purchase New York-based wholesaler MortgageIT. Deutsche Bank said it would pay close to $429 million for the MortgageIT platform, which originates prime and Alt A loans through 50 branches around the country. Until recently, MortgageIT was also active in the subprime market, but the company exited that business in January because of profitability… Read More

Seeking Market Share Gains, Ginnie Mae Will Push Hard for Proposed Reforms of FHA Mortgage Biz

Aiming to reverse its sliding share of the mortgage securitization market, Ginnie Mae plans to push hard for reforms that could make the FHA’s single-family mortgage program more competitive – and create more loans for Ginnie to package into bonds. “The 800-pound gorilla is the FHA. Our fortunes are clearly aligned with the FHA’s fortunes,” said Robert Couch, the new president of Ginnie Mae, in an interview with Inside MBS & ABS. … Read More

House Passes Credit-Rating Agency Bill, Major SROs Divided on Bill’s Benefits

The House of Representatives this week approved legislation that seeks to increase competition in the securities rating business, although the measure faces uncertain prospects in the Sentate. H.R. 2990, the “Credit Rating Agency Duopoly Relief Act of 2005,” establishes procedures for mandatory registration by a credit rating company with the Securities and Exchange Commission. It also directs the SEC to adopt rules prohibiting anti-competitive practices in the credit rating industry and to stop giving out… Read More

Investors Face Possible GSE Debt Limits from Treasury, No More Free Intraday Credit from the Federal Reserve

Fannie Mae and Freddie Mac say they are ready to comply with new requirements in the Federal Reserve payment system that will kick in next week, a change that experts hope will have minimal impact on the market. Meanwhile, the government-sponsored enterprises are going into initial talks with the Treasury Department that could affect their debt issuance schedules and, ultimately, their ability to fund MBS portfolio purchases. … Read More

MBS Industry at Risk for Class-Action Lawsuits Due to Data Security Breaches

A lack of action by Congress and a patchwork of state consumer protection laws puts mortgage securitizers at-risk for class-action lawsuits, according to lawyers tracking security breach laws. As mortgage-backed securities data is passed among dealers, due diligence firms, servicers, trustees, investors and others, the various parties have specific obligations if there is any breach in data security. In addition to the federal Fair Credit Reporting Act and Gramm-Leach-Bliley Act, a growing number of states… Read More

MBS and ABS Ratings Upgrades Increased In 2005; Fitch Warns of Interest Rate Risk

In an uncommon turn, the commercial mortgage backed securities sector lead structured finance ratings upgrades in 2005, according to Fitch Ratings. However, the ratings agency warned that rising interest rates could harm commercial MBS this year and residential MBS are expected to fare better. Fitch’s U.S. structured finance ratings had an upgrade-to-downgrade ratio of 3.1 to 1 in 2005, compared to 2.6 to 1 in 2004, according to a recent report by the rating agency.… Read More

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