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Inside MBS & ABS

October 6, 2006

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Mortgage Securitization Volume Eases Slightly In Third Quarter, GSEs Recapture Some Share

The volume of new mortgage securities issued during the third quarter remained at historically high levels but was off slightly from the previous quarter, according a new analysis based on the Inside Mortgage Finance MBS Database. A total of $514.93 billion of mortgage-backed securities were issued during the third quarter, down 0.8 percent from the previous three-month period. That dropped year-to-date issuance 2.8 percent below the pace set during the first nine months of 2005... [Includes 2 charts] Read More

Guidance on Nontraditional Mortgages Could Heighten Repurchase Risks for Loan Sellers

New guidance from federal banking regulators could dampen the red-hot market for nontraditional mortgages that now provide over half of the collateral flowing into non-agency MBS. Joint guidance issued by five banking agencies focuses mostly on loan underwriting and consumer protection issues in the origination of option ARMs and interest-only loans, lumped together with other kinds of Alt A product under the label “nontraditional mortgages.” Among the key recommendations is that... Read More

GSE Retained Portfolios Squeezed Again by Tough Competition from Other Investors, Leveling Supply

After growing steadily in late 2005 and early this year, the retained portfolios of Fannie Mae and Freddie Mac have been gradually eroded by tough competition from other investors and a slowing supply of new MBS coming to market. Fannie Mae reported $726.8 billion in its mortgage portfolio as of the end of August, down about $700 million for the year and off $7.0 billion from May, its highest level since the government-sponsored enterprise was forced to pare assets to shore up its capital position... Read More

Bond Rally Prompts Mutual Funds to Rethink MBS Strategy, Trim Holdings

A rally in Treasury bonds spurred mutual funds such as T. Rowe Price and Putnam Investments to trim their MBS holdings, but analysts say investors are concerned about more than just a new mortgage refinance boom. They’re also worried about credit quality. While Price and Putnam may be buying fewer lower-rated MBS these days, Pacific Investment Management Co. is still in the market. Under a new Pimco acquisition strategy, MBS account for 55 percent... Read More

Agency CMO Issuance Drops Sharply in 3Q06,RBS Greenwich Capital Leads in Underwriting

New production of structured mortgage securities backed by agency pass-throughs fell sharply in the third quarter, according to a new ranking and analysis by Inside MBS & ABS. A total of $62.52 billion of agency-backed CMOs and REMICs were issued during the third quarter of this year, down 27.4 percent from the second quarter. That brought year-to-date issuance to $214.53 billion, a 4.2 percent drop from the same period in 2005...[Includes one chart and graph] Read More

FBR to Close Mortgage Bond Unit that Underwrote Mortgage-Related ABS

Friedman Billings Ramsey recently revealed that it is closing its MBS underwriting unit, an operation that a spokesman described as a “non-core” part of FBR’s business. The move comes on the heels of a restructuring in which FBR split off its investment banking, institutional brokerage and research/asset management businesses into a new entity, FBR Capital Markets. The transaction was valued at $270 million and left FBR holding about 70 percent of the capital markets business... Read More

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