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Inside MBS & ABS

April 12, 2012

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Agency MBS Issuance Increased in Early 2012, But March Production Not As Much As Expected

Fannie Mae, Freddie Mac and Ginnie Mae produced a solid $384.9 billion of new single-family MBS during the first quarter of 2012, including a surge in new issuance in March. But industry analysts said they had been bracing for more. Combined, the three agencies saw new single-family MBS production rise 14.0 percent from the fourth quarter of last year. Issuance in the opening round of 2012 was 12.9 percent ahead of the volume produced in the same period last year. It was the strongest quarter for new agency MBS since the end of 2010. Fannie dominated the agency market, accounting...(Includes one data chart) Read More

Agency REMIC Production Up Slightly in 1Q12, Goldman Sachs Tops in Underwriting

New issuance of real estate mortgage investment conduits backed by agency MBS rose 6.8 percent from the fourth quarter of 2011 to the first three months of this year, about half the rate of increase in underlying MBS production, according to an Inside MBS & ABS ranking. Fannie Mae got the early lead with $33.5 billion in new REMIC production, a gain of 8.4 percent from the fourth quarter. Freddie Mac ranked second, but its REMIC volume was down 1.5 percent from the previous period and off 50.7 percent from year-ago levels. Ginnie Mae posted a significant 18.1 percent...(Includes one data chart) Read More

Credit Suisse Packages Jumbo MBS, Springleaf Issues Second Deal Backed by Seasoned Subprime Mortgages

Credit Suisse has joined Redwood Trust to push the comeback of the non-agency MBS sector with a new public issue, while Springleaf Financial has put together another securitization backed by seasoned subprime mortgages. The Credit Suisse transaction, CSFB Mortgage Securities 2012-CIM1, is backed by $1.4 billion of prime residential mortgages, 82 percent of which had been originated by MetLife Home Loans. The deal sparked some controversy among rating services as Fitch Ratings questioned whether it had enough credit enhancement to cover risks related to property valuations on many of the... Read More

Judge Upholds Investors’ Claim Disputing Bank of America’s Proposed Settlement

A legal action brought by a group of four pension funds against Bank of New York Mellon alleging that the bank failed in its role as trustee to Countrywide MBS investors will proceed in federal court, albeit on much narrower grounds, a U.S. District Court judge has ruled. Last week, Judge William Pauley of the U.S. District Court for the Southern District of New York reduced “with prejudice” the number of Countrywide MBS trusts on which the plaintiffs could sue from 530 to 26. The case is Retirement Board of the Policemen’s Annuity and Benefit Fund of the City of Chicago, et al v. the Bank of New York... Read More

Covered Bonds Legislation Gets Close But No Cigar, Proponents Have to Wait for November Elections

Congressional supporters of creating a legislative framework for a covered bonds market in the U.S. fell short in an attempt to get covered bond provisions attached to the Jumpstart Our Business Startups (JOBS) Act approved by Congress before lawmakers broke for spring break. The JOBS Act was signed by President Obama last week and contains provisions to help companies go public, raise capital privately and remain private longer, as well as making a number of significant changes to the Securities Act of 1933 and the Securities Exchange Act of 1934. But it does not contain any of the provisions... Read More

Despite Allegations That RMBS Working Group Is Missing Investigators, Task Force Is ‘Very Busy’

Some liberal interest groups are questioning whether the RMBS working group formed by federal and state enforcement agencies to coordinate securitization investigations is moving fast enough. In an email circulated earlier this week, CREDO, a progressive network, wrote that the Department of Justice has yet to deliver on its promise of 55 investigators to the RMBS working group. As federal and state enforcement agencies were wrapping up the contentious $25 billion settlement with five mortgage servicers in late January, U.S. Attorney General Eric Holder announced a new task force designed to “stream... Read More

Moody’s Top Brass Favor CRAs Dropping Regulatory Role, Return to Market Roots

Credit rating agencies (CRAs) should return to their market roots and stop being a regulatory tool for public policy, according to a Moody’s Investors Services top executive. In recent remarks to the American European Community Association, Ray McDaniel, chief executive officer of Moody’s Corp., noted that credit ratings have grown from limited use by banks in the 1920s to something that regulators and politicians have relied upon to serve public-policy objectives for the past several decades. McDaniel said such reliance has got to stop. He said regulatory policies should be geared towards reducing any... Read More

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