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Inside MBS & ABS

March 27, 2015

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Non-Agency Investors See Better Value In Securities Outside of Jumbo MBS

It’s not just structural issues that are keeping investors away from jumbo MBS; they are finding better value in other non-traditional mortgage securities products, including Fannie Mae and Freddie Mac risk-share transactions and deals backed by seasoned loans. During the fourth quarter of 2014, Javelin Mortgage Investment sold all of its holdings of prime, fixed, senior bonds from new-issue jumbo MBS. The real estate investment trust sold a total of ... Read More

HARP Continued Winding Down in Late 2014 as FHFA Officials Weigh Extending It Another Year

The refinance program for performing, underwater Fannie Mae and Freddie Mac mortgages staggered to a five-year low during 2014, but government officials are thinking about keeping it on life support for another year. The Home Affordable Refinance Program is slated to expire at the end of 2015. Although the Federal Housing Finance Agency has barnstormed around the country trying to drum up business, activity in the program has fallen steadily since ... [Includes two data charts] Read More

Democrats Propose Plan to Wind Down Fannie and Freddie, Expand Ginnie Role in Conventional Market

Democrats on the House Financial Services Committee have introduced legislation that would provide private and government risk-share coverage to all mortgages, create a single MBS and decommission Fannie Mae and Freddie Mac. Introduced by Reps. Jim Himes, D-CT, John Delaney, D-MD, and John Carney, D-DE, the bill would require Ginnie Mae to run an MBS program that combines private capital with government re-insurance in lieu of the current federal ... Read More

Ocwen Refutes Accusations From Non-Agency MBS Investors, Claims No Ongoing Events of Default

Ocwen Financial pushed back this week against claims from large investors that have worked to remove the nonbank as servicer on 119 non-agency MBS. “By all indications, the holders employed unsupportable assumptions and manipulated their analysis to advance their agenda,” Timothy Hayes, an executive vice president and general counsel at Ocwen, wrote in a letter to the trustees of the MBS in question. The letter was a response to claims made ... Read More

Whole Loan Market for ‘Re-performing’ Mortgages Heats Up, But How Much Will Wind Up in MBS?

In 2014, Freddie Mac securitized $6.983 billion of re-performing mortgages, double what it did the year prior, and a sign that this niche market is heating up. As for Fannie Mae’s participation in “re-performers,” that’s a different matter entirely. The government-sponsored enterprise has yet to stick its toe in the water, though a spokesman for the company told Inside MBS & ABS that “it’s something we continue to evaluate.” But just how hot might the sector get ... Read More

Mortgage Lenders Take Issue with Basel III Credit Exposure Risk Weights, Capital Floors Framework

The Mortgage Bankers Association took issue this week with two proposals pending before the Basel Committee on Bank Supervision that could have negative repercussions on U.S. mortgage financing and on American homebuyers. Back in December, the Basel Committee put out a “consultative document” that included proposed revisions to its Standardized Approach for credit risk, including updated risk-weight calibrations. As applied to the U.S. ... Read More

Nomura Unlikely to Take Ratings Hit; Court Allows NCUA Suit Against RBS, HSBC; AIG Investors Win

Nomura Holdings is unlikely to suffer a hit in ratings because of the Federal Housing Finance Agency’s mortgage-backed securities lawsuit, but the litigation may yet prove costly to the Japanese financial holding company, according to a recent report from Fitch Ratings. Nomura went to trial on March 16 to defend itself against allegations that it misrepresented the underlying asset quality of MBS it sold to Fannie Mae and Freddie Mac prior to the financial crisis ... Read More

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