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Inside MBS & ABS

November 6, 2009

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Low Mortgage Rates Fail to Spur Securitization Volume as October Issuance Hits 10-Month Low

Declining mortgage rates in recent months failed so far to ignite a surge in mortgage securitization activity, although primary market lenders say an increase in application volume points to increased volume in the months ahead. Fannie Mae, Freddie Mac and Ginnie Mae issued a total of $100.21 billion of single-family MBS during October, a 23.1 percent decline from September’s level... Read More

Some Servicers Feel Less Confident about MERS as Courts Increasingly Question Its Ability to Foreclose

Recent court cases that call into question the ownership of a mortgage loan are forcing servicers to alter their practices and making them less likely to foreclose or appear in court in the name of the Mortgage Electronic Registration System, according to Moody’s Investors Service. Non-agency MBS servicers are adjusting their foreclosure and bankruptcy servicing practices due to the outcomes of... Read More

Rating Agencies Carve Out New Path to Limit Conflicts, but Structural Problems Persist

Credit rating agencies are still absorbing a share of the blame for the problems in the securitization market, and industry experts said the companies still need to make strides to distance themselves from Wall Street and define their role in the secondary market. Speaking on a panel at last week’s ABS East conference in Miami, hosted by the Information Management Network, rating agency officials outlined... Read More

Government Agencies Continue to Be the Major Buyers of Agency MBS in October

The Federal Reserve system and the Department of Treasury continued to consume most of the agency MBS issued in October, according to a preliminary analysis by Inside MBS & ABS. The Fed reported net purchases of $72.20 billion during October and ended the month with commitments to purchase another $168.87 billion. Although Treasury MBS purchase data for October are not yet available, it’s likely that... Read More

Commercial MBS Space ‘Very Dangerous,’ Experts Say, Even with Help from TALF

The hint of optimism among participants at last week’s ABS East conference in Miami about prospects for securitization in the coming year certainly didn’t extend to the commercial MBS sector, where major problems still exist even with help from the federal government. Investor tycoon Wilbur Ross, CEO of WL Ross & Co./Investco Private Capital and the keynote speaker at the... Read More

Securitization Group Contemplates Increasing TBA de Minimus Limit to Include More Jumbos

In a move that could undermine the quality of agency MBS, the American Securitization Forum is meeting this week to explore allowing as much as 20 percent of To Be Announced loan pools to be comprised of conforming jumbo mortgages. This could be troubling for investors. “An increase in conforming jumbo loans in TBA could deteriorate the quality of agency MBS bonds that currently trade as... Read More

FHLBanks’ Non-Agency MBS OTTI Balloons As System Dips into the Red During 3rd Quarter

The 12 Federal Home Loan Banks had to take a combined $8.4 billion in other-than-temporary impairment through the first nine months of 2009, mostly due to the continuing deterioration in their non-agency MBS holdings. That helped drive the FHLBanks to a collective $165 million loss during the third quarter, versus a $1.1 billion gain in the previous quarter. “These preliminary combined results were... Read More

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