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Inside MBS & ABS

October 2, 2015

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Structured Finance Issuance Off Slightly in 3Q15 Despite Modest Gain in September, Steady Agency MBS Volume

New issuance of residential MBS and non-mortgage ABS fell slightly during the third quarter of 2015, but the market remained well ahead of the pace set last year. A new Inside MBS & ABS analysis shows a total of $396.99 billion of MBS and ABS were issued during the third quarter, down 6.1 percent from the previous quarter. That total does not include commercial MBS or multifamily securities issued by Fannie Mae, Freddie Mac and Ginnie Mae. On a year-to-date basis, total MBS and ABS issuance was...[Includes two data tables] Read More

GSEs Do More Credit Risk-Sharing Deals as Fannie, Freddie Find More Interest From Insurance Sector

Fannie Mae and Freddie Mac continued to tap investor interest in credit-risk transfer transactions over the last week or so, with each company announcing another deal involving more support from various elements in the insurance and reinsurance sectors. Last week, Fannie announced it has completed its latest Credit Insurance Risk Transfer transaction, which shifts credit risk on a pool of loans to a panel of reinsurers. In CIRT-2015-3 which became effective Aug. 1, 2015, Fannie retained...[Includes one data table] Read More

The Angel Oak Nonprime MBS Saga Continues; The Deal May Be Dead but Others (PIMCO?) Are Forging Ahead

The much-anticipated $150 million nonprime MBS deal from Angel Oak Mortgage Solutions appears to have hit a brick wall with concerns arising over representations and warranties on the transaction, according to one high-level source who claims to have knowledge of the deal. Both Angel Oak and the underwriter, Nomura Securities, this week once again did not return several media inquiries on what might have gone wrong. Originally, the bond – a privately issued transaction – was slated for sale to investors sometime in September but never came off. The source, who spoke to Inside MBS & ABS under the condition his name not be used, said... Read More

IRS Decision on Tax Implications Bolsters Investors In REMICs Backed by Nonperforming Mortgages

A memo issued by the Internal Revenue Service this year regarding the tax treatment for certain real estate mortgage investment conduits has been a boon for investors in nonperforming loans, according to William Cejudo, a partner at the law firm of Clifford Chance. At the recent ABS East conference sponsored by Information Management Network in Miami, Cejudo provided some background on Technical Advice Memorandum 2015-17007, which was issued by the IRS in May. The memo covered a life insurance company’s formation of a REMIC that held impaired non-agency MBS. “It’s... Read More

Issuance of ABS Backed by Equipment Leases Is Still Growing, But Regulatory Issues Could Stall Market

Issuance of ABS backed by leases on small/mid-ticket equipment has rebounded since the financial crisis to levels last seen 15 years ago. However, industry participants suggest that loan-level disclosure requirements and mandatory risk-retention could limit activity in the sector going forward. At the recent ABS East conference produced by Information Management Network in Miami, Du Trieu, a senior director at Fitch Ratings, said issuance is increasing due to the improving economy and investor demand. “The collateral is business critical and income producing,” he added. Nearly $12.0 billion in small/mid-ticket ABS was issued... Read More

Although the FHFA Says Its FHLB Captive Rule Is ‘Under Review,’ Some Analysts Think It’s a Dead Issue

Real estate investment trusts that have gained access to Federal Home Loan Bank advances don’t seem particularly worried that they will be kicked out of the system, at least not anytime soon. As for when the Federal Housing Finance Agency will issue a final membership rule that addresses the thorny topic, that’s a different matter. The FHFA formally proposed changes a year ago that would ban captive insurance companies, the vehicle through which all REITs have gained membership. Even though public comments were taken, no final rule has appeared. In some circles, the “no action” stance is being read... Read More

Delays Result in Negative Issuer Review Findings, Testing Areas May Be Expanded, Reviewers Say

Failure to deposit borrowers’ escrow amounts into custodial accounts at the time of securitization or pool transfer is the most common fault committed by Ginnie Mae issuers, according to compliance experts. In particular, such oversights accounted for 24.7 percent of findings of compliance reviews conducted between Sept. 3, 2013, and Aug. 17, 2015. Ginnie requires that borrower escrow amounts be deposited in a “timely” manner, which is defined as within 48 hours of pool securitization, explained experts at the recent Ginnie Mae Summit conference in Arlington, VA. Approved Ginnie Mae issuers undergo... Read More

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