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Inside MBS & ABS

October 18, 2013

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Securitization Participants Largely Okay with New QRM Proposal, Have Concerns About Other Assets

MBS issuers and investors endorse many aspects of the revised qualified residential mortgage requirements recently proposed by federal regulators, but there are concerns about requirements for other asset classes included in the new risk-retention proposal. Issuers of non-agency MBS, ABS and commercial MBS backed by collateral that doesn’t meet certain qualifying requirements will have to retain risk on at least 5 percent of the deal, as required by the Dodd-Frank Act. Major industry groups have asked the regulators for more time to weigh the new proposed rule, which set a public comment period that ends Oct. 30. Richard Johns, executive director of the Structured Finance Industry Group, offered... Read More

Non-agency MBS Investors, Issuers, Trustees Working to Address Communication Issues

Communication among investors in non-agency MBS as well as between issuers and investors has been inadequate, according to industry participants. Trustees and others are working to address the issues, both with new jumbo MBS and vintage non-agency MBS. Investors cite problems with data availability, consistency, timing and quality. Paul Burke, head of North American agency and trust sales at Citibank, said the communication system currently used for non-agency MBS leaves something to be desired. Communication regarding potential votes for action on non-agency MBS, due to a perceived breach of representations and warranties, for example, is generally funneled... Read More

Vehicle Finance, Credit Cards Help Lift ABS Issuance in 3Q13, Ford on Top

A rebound in asset securitizations backed by car loans, dealer financing and credit cards fueled a solid 9.9 percent increase in non-mortgage ABS issuance during the third quarter of 2013, according to a new analysis and ranking by Inside MBS & ABS. A total of $42.00 billion of non-mortgage ABS were issued during the third quarter, reversing a sharp decline in new issuance during the previous three-month period. It lifted total production for the first nine months of 2013 to $127.34 billion, a 14.7 percent increase over the same period last year. The biggest component in the market has been...[Includes two data charts] Read More

ASF Stands Apart From Other Trade Groups, Calls For Incremental Cuts in GSE Loan Limits Now

Bucking the stampede of mortgage- and housing-industry interests campaigning against a cut in the conforming loan limits for Fannie Mae and Freddie Mac, the American Securitization Forum is urging the Federal Housing Finance Agency to go ahead and shrink the footprint of the two government-sponsored enterprises. The ASF urged the FHFA to use its authority “to at least marginally reduce” GSE loan limits to lessen Fannie’s and Freddie’s “vice grip on the mortgage market finance market” and encourage the return of private capital. “Such marginal reductions in conforming loan limits would appropriately increase... Read More

Fannie Contemplates Telling New Sellers Cash Window or MBS – But Not Both

It’s no secret that Fannie Mae this year has been pushing some of its newly minted seller/servicers to use the cash window as opposed to swap MBS transactions, but the government-sponsored enterprise may be weighing an “either/or” policy. A spokesman for the GSE told Inside MBS & ABS that he has no knowledge of such a stern choice being given to Fannie customers, but he noted that the secondary market giant continues to wonder why so many new seller/servicers have MBS contracts, but do not actively issue. He said... Read More

Fannie Announces Two Risk-Sharing Deals, Meets $30 Billion Scorecard Goal for 2013

Fannie Mae said this week it is all set for meeting the 2013 risk-sharing goal set by its conservator for each of the government-sponsored enterprises after announcing back-to-back risk-sharing deals over the last two weeks. Fannie this week priced a $675 million bond offering under its Connecticut Avenue Securities series. The deal is backed by a reference pool of more than 112,000 single-family mortgages with an outstanding unpaid principal balance of $27 billion. The company late last week reported... Read More

Mortgage Servicer Timelines Have Risen Steadily, Delinquency Rates Have Fallen, Analysts Find

Residential mortgage delinquency rates have turned around nicely from their worst levels in the wake of the financial crisis, but mortgage servicer timelines continue to increase, according to recent findings by industry analysts. “The improvement in the broad U.S. economy in general, and the steady decline of the unemployment rate and the strong rebound of the housing market in particular, have significantly reduced the residential mortgage serious-delinquency rate across all credit spectrums,” Deutsche Bank analysts said in a report issued last week. Delinquency rates have declined... Read More

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