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Inside MBS & ABS

February 28, 2014

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SEC Considering Scaling Back Disclosure Requirements Under Reg AB2, Wall Street Seeks Other Changes

The Securities and Exchange Commission was set to vote on a final rule earlier this month that would set new disclosure requirements for non-agency MBS, but the agency is still considering how the final rule should be applied as industry participants clamor for further changes. The SEC this week re-opened the comment period regarding the pending requirements for disclosures on MBS and ABS, the so-called Reg. AB2 rule. The rule was first proposed in 2010 and re-proposed in 2011. The comment period on the second proposal closed... Read More

SEC Commissioner Urges Regulator to Take Action on Rating Services, Following Up on Franken Amendment

Kara Stein, a commissioner at the Securities and Exchange Commission, said the SEC needs to take action regarding the rating services. It was one of many recent MBS-related calls for action directed at the SEC, from the agency's leadership, Congress and industry analysts. "We need to finally and firmly address the conflicts of interest in asset-backed securitizations and the provision of credit ratings," Stein said in a speech late last week. She noted... Read More

GSEs Whittling Down Mortgage Portfolios, Get High Marks on Conservator Scorecard

Fannie Mae and Freddie Mac continued to sell off their holdings of non-agency commercial MBS as the preferred strategy for meeting their regulator's demand that the two government-sponsored enterprises accelerate the reduction in their retained mortgage portfolios. The two GSEs reduced their CMBS holdings by 51.4 percent over the course of 2013, according to an Inside MBS & ABS analysis of year-end financial statements. The Federal Housing Finance Agency ordered the two GSEs to sell at least 5 percent of their "less-liquid" mortgage assets, meaning whole loans and non-agency securities. CMBS are...[Includes one data chart] Read More

Auto, Credit Card ABS Performance Keeps Improving Despite Lingering Crisis Fallout

Consumer credit sectors such as auto and credit card ABS continue to enjoy improving fortunes, notwithstanding some bumps and bruises that remain in the recovery from the financial crisis that lead to the Great Recession. During the fourth quarter of 2013, the U.S. credit card ABS sector turned in its fifth consecutive improving performance across all major benchmarks to close out the year on a positive note, according to the latest quarterly index from Fitch Ratings. Both charge-offs and delinquencies improved... Read More

Ocwen Comes to Market with a Unique Animal: A Bond Backed by Agency Servicing Rights

Ocwen Financial, the largest nonbank servicer in the nation, recently came to market with a unique security: a bond collateralized by residential servicing rights on Freddie Mac loans. However, it remains to be seen whether the deal will be replicated by others. The bond -- Ocwen Asset Servicing Income Series 2014-1 -- is expected to raise $123.5 million in a private placement. The reference pool is $11.8 billion. Monthly payments to investors will be... Read More

Morgan Stanley, SEC Reach Tentative Settlement; AIG Delay Rejected; Syncora and JPMorgan Settle

Morgan Stanley has agreed tentatively to pay $275 million to the Securities and Exchange Commission to resolve an investigation into certain subprime MBS which the company sponsored and underwrote in 2007. The SEC has yet to sign off on Morgan Stanley's settlement proposal, which includes being charged for violation of federal securities laws and payment of disgorgement and penalties totaling $275 million without admitting to or acknowledging any wrongdoing. In an annual SEC filing, the New York-based bank said... Read More

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