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Inside MBS & ABS

July 18, 2013

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Jumbo Mortgage, Servicer-Advance Deals Lift Non-Agency MBS Issuance to Two-Year High

The steady recovery in prime jumbo securitizations and financing needs of nonbank mortgage servicers fueled a modest increase in non-agency MBS issuance during the second quarter of 2013, according to a new Inside MBS & ABS ranking and analysis. A total of $10.08 billion of non-agency MBS were issued during the second quarter, up 17.6 percent from the first three months of the year. It was the strongest three-month output in two years and lifted year-to-date issuance to $18.66 billion, a 119.0 percent increase over the same period in 2012. Re-securitizations of seasoned non-agency MBS have tapered...[Includes two data charts] Read More

Market for Private-Placement Issuance Widens, FINRA Considering Increasing Transparency

The audience for the marketing of private-placement securities is set to increase due to changes approved last week by the Securities and Exchange Commission. Separately, the Financial Industry Regulatory Authority voted to increase transparency for consumer ABS private placements, prompting some to suggest that FINRA could also increase transparency for private-placement non-agency MBS. The SEC voted 4-1 to adopt a new rule to implement a JOBS Act requirement to lift the ban on general solicitation or general advertising for certain private securities offerings offered under Rule 506. The SEC also amended Rule 144A, which covers private placements of non-agency MBS and other securities. Under the new rule, offers of 144A securities can be made... Read More

Securitization of Re-Performing Residential Mortgages Begins to Gain Traction in 2013

It’s no secret that the market for nonperforming mortgages has improved nicely this year, but now there are signs of life in the “re-performing” sector as well, especially among investors that hope to package and securitize the notes. According to Jeana Curro, director of agency MBS strategy for Royal Bank of Scotland, the re-performing MBS market is small, “although not insignificant.” But getting a true handle on MBS backed by re-performing loans can be... Read More

Experts: Hensarling’s PATH Act Should Tighten Utility Oversight; Lack of Democrat Input a ‘Non-Starter’

Both supporters and detractors of a House Republican bill aimed at comprehensive mortgage finance reform told members of the House Financial Services Committee this week the proposal has room for improvement, but the author of the proposal is pulling out all the stops to get the legislation on the fast track despite a nearly complete lack of bipartisan support. This week’s hearing, called by Rep. Jeb Hensarling, R-TX, committee chairman and author of the Protecting American Taxpayers and Homeowners Act, was designed to gather input on the bill with an eye toward marking up the PATH Act before the House adjourns for its August recess. The bill would put... Read More

Bernanke Calms Markets With Details About Fed Plans to Taper Late This Year, Ending Mid 2014

In what may well be his last appearance before Congress as chairman of the Federal Reserve, Ben Bernanke this week indicated the central bank’s much-debated “tapering” of its massive asset purchase program is likely to begin later this year and then cease altogether by the middle of 2014, assuming the U.S. economy progresses as the Fed anticipates. At the same time, the Fed chief emphasized the Federal Open Market Committee will continue to be flexible in responding to market and economic conditions, all based on the flow of data coming into the committee. Bernanke said the FOMC has made... Read More

Common Fannie, Freddie Security Tops MBA’s Implementation List to the FHFA

With legislation to replace the government-sponsored enterprises not likely to be enacted until after the 2014 election, the Mortgage Bankers Association is proposing five steps administrators can take now to ensure a smooth transition without disrupting the nation’s housing finance system. At a press briefing this week, MBA President and Chief Executive Officer David Stevens rolled out the trade group’s five-point plan that could be immediately implemented by the Federal Housing Finance Agency and/or Fannie Mae and Freddie Mac without the need for legislation. At the top of the MBA’s list and the tallest order of the five recommendations is... Read More

NRSROs Sued in State Courts for Allegedly Issuing Bad MBS Ratings; NCUA’s MBS Suit Gets Tossed

It has been a bad month for nationally recognized statistical rating organizations (NRSROs) as plaintiffs pummeled Standard & Poor’s, Moody’s Corp. and Fitch Ratings with lawsuits in state courts, seeking damages for allegedly fraudulent investment ratings of pre-crisis non-agency MBS. On July 9, liquidators of two Bear Stearns funds sued the three rating agencies and their parent companies in New York state court for more than $1.12 billion in damages, as well as punitive damages, over allegedly inflated ratings of purportedly “high grade” securities. Geoffrey Varga and Mark Longbottom, the joint official liquidators of Bear Stearns, brought...[Includes one data chart] Read More

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