Credit Ratings

Browse articles from all of our Newsletters related to Credit Ratings.

October 20, 2017 - Inside MBS & ABS

Citadel Gets Rated by Morningstar. Investors Will Get A Crack at Its First Non-QM MBS in a Few Months

Citadel Servicing Corp. has talked about issuing its first non-prime MBS, possibly late this year, and this week cleared a hurdle when it received lender and servicer ratings from Morningstar. According to sources close to the company, the anticipated MBS – backed by newly originated loans that do not meet the qualified-mortgage test – could be as large as $250 million. Nomura is assisting Citadel with the deal, a source noted, adding that the bond may not actually hit the market until ...


October 20, 2017 - Inside MBS & ABS

Arch Brings First Mortgage Insurance Linked-Notes Deal with Credit Rating

Arch Capital Group is set to issue a mortgage-insurance linked note transaction. Unlike two other re-insurance deals from a similar shelf, Bellemeade Re 2017-1 received credit ratings, expanding the investor base for the transaction. A mezzanine tranche of the deal received preliminary BBB ratings from Morningstar Credit Rat-ings this week. Mortgages delivered to the government-sponsored enterprises with an unpaid principal balance of $29.30 billion are included in the transaction ...


October 13, 2017 - Inside FHA/VA Lending

Ginnie MBS Issuance Rolled To Year’s High Mark in 3Q17

Ginnie Mae issuers rode a wave of purchase-mortgage lending to deliver $120.46 billion of forward mortgages during the third quarter of 2017, the highest three-month volume for the year, according to a new analysis and ranking by Inside FHA/VA Lending. Third-quarter volume was up 9.6 percent from the April-June cycle. The data excluded FHA reverse mortgages and loan amounts are truncated in Ginnie’s mortgage-backed securities disclosures. Without those limitations, total Ginnie MBS issuance rose 9.5 percent to $123.37 billion in the third quarter. Purchase mortgages were the engine behind the growth. Ginnie issuers securitized $85.35 billion of purchase loans in the third quarter, falling just short of the record $85.41 billion set in the third quarter of last year. Although most Ginnie purchase loans (58.7 percent) were FHA loans, the biggest increase was in such loans guaranteed by the ... [Charts]


October 13, 2017 - Inside MBS & ABS

Rating Agencies Split on Airline ABS Deal, Fitch Suggests KBRA Misjudged Transaction

Fitch Ratings and Kroll Bond Rating Agency both recently took detailed looks at an airline ABS deal, Business Jet Securities 2017-1, and came to much different assessments of the transaction and its risks to investors. Fitch implied that KBRA did not properly evaluate the potential for losses. According to a presale report from KBRA, the BJETS notes are secured by payments on leases and loans secured by business jet aircraft. “The collateral portfolio consists of 181 business jets ...


October 6, 2017 - Inside MBS & ABS

Strong Demand for Rated MBS Backed by Re-performing Loans; Chimera Issues First Deal and MetLife is Ready

Investor demand for non-agency MBS backed by re-performing loans has prompted an increase in issuance, with a new emphasis on deals that have credit ratings. Chimera Investment issued its first rated RPL transaction this week and MetLife Investment Management is preparing to enter the market as an issuer. “Rated RPL MBS has fundamentally changed the market,” Scott Waterstredt, a managing director at MetLife, said at the recent ABS East conference. He noted that ...


September 29, 2017 - Inside FHA/VA Lending

VA Jumbo Securitization Drops, FHA Jumbo Origination Slips in 2Q

Wells Fargo recaptured its crown as the leading VA jumbo securitizer, pushing Penny Mac back to second place even as the market dropped further in the second quarter. The volume of VA jumbo loans securitized during the second quarter declined by 5.2 percent from the prior quarter and by 11.8 percent during the first half of 2017 compared to the same period last year. VA jumbo mortgage originations were off by 4.3 percent from the first quarter, according to an analysis by Inside FHA/VA Lending affiliate Inside Mortgage Finance. Agency-jumbo production sagged in the second quarter but the results were not uniform. Fannie Mae production was up 6.5 percent from the prior quarter, while FHA jumbo securitization gained 7.2 percent during the period. At the same time, VA jumbo securitization was down 5.2 percent to $7.4 billion from $7.8 billion, while Freddie Mac saw a hefty 27.8 percent drop in ... [Charts]


September 29, 2017 - Inside MBS & ABS

DBRS Tops in Non-Agency MBS Ratings In First Half of 2017, S&P Reigns in ABS

S&P Global ranked as the top rating service in the non-mortgage ABS market during the first half of 2017, with strong market shares in the major asset categories, according to a new ranking and analysis by Inside MBS & ABS. S&P rated $69.54 billion of ABS issued in the first half of the year, roughly 60.1 percent of total issuance by dollar volume. For all of 2016, the company finished second in ABS ratings with a 53.6 percent share of the market. S&P had...[Includes two data tables]


September 15, 2017 - Inside Nonconforming Markets

News Briefs

The Milken Institute – a nonpartisan think tank – established a new policy team last week to work on issues involving housing finance reform. Eric Kaplan was named director of Milken’s Housing Finance Program. He was a managing partner at Ranieri Strategies and continues to chair the Structured Finance Industry Group’s RMBS 3.0 effort. Michael Milken and Lewis Ranieri will co-chair a new Housing Advisory Council, which will inform the work of the team led by Kaplan ... [Includes two briefs]


September 15, 2017 - Inside MBS & ABS

Credit Rating Agencies Expect Limited RMBS Exposure Will Ease Effects of Losses in Storm Areas

Most rated residential MBS in regions affected by Hurricanes Harvey and Irma have limited exposure that will mitigate the losses resulting from the devastation, according to rating services. Residential MBS rated by Moody’s Investors Service, including securities backed by single-family rental properties, have minimal exposure to the storm-affected counties of Texas and Louisiana thereby easing the losses due to reduced property values, rising delinquencies and longer foreclosure and liquidation timelines, the rating agency said. The analysis is...


September 8, 2017 - Inside MBS & ABS

Former S&P Rating Manager Beats Fraud Charges In CMBS Case but Fails to Avoid Negligence Finding

A former employee of Standard & Poor’s Rating Services beat fraud charges alleging she loosened S&P’s rating methodology for commercial MBS to generate business for her employer. However, she was found liable of the lesser charge of negligence for failing to disclose the change. In his initial Aug. 29 decision, Administrative Law Judge James Grimes of the Securities and Exchange Commission’s administrative court said that while Barbara Duka did change the firm’s rating methodology for CMBS, he found no evidence that she intended to manipulate, deceive or defraud investors. Rather, Duka, manager of S&P’s CMBS rating group, did...


September 8, 2017 - Inside MBS & ABS

Moody’s Ratings on Hundreds of Vintage Non-Agency MBS Incorrect, Prompting Upgrades, Downgrades and Uncertainty

Moody’s Investors Service is working to correct errors it made when rating a significant number of interest-only tranches on non-agency MBS dating back to at least 2015. At the end of August, Moody’s placed ratings of IO tranches from 953 MBS on review. While such reviews generally indicate whether an upgrade or downgrade is possible, the rating service said it wasn’t sure which direction ratings would go for many deals included in the review. The effort covers...


September 8, 2017 - Inside MBS & ABS

Redwood Brings Variety to Jumbo Market with First ‘Expanded Prime’ MBS; Deal Received Favorably

Redwood Trust worked for years to revive the jumbo MBS market by issuing deals with super-prime mortgages. Now, the firm is shifting its focus somewhat to “expanded prime” mortgages that have slightly looser underwriting standards. The $316.49 million Sequoia Mortgage Trust 2017-CH-1 is the first MBS from Redwood to deviate from super-prime standards. The deal received preliminary AAA ratings this week from Kroll Bond Rating Agency and Moody’s Investors Service. The average combined loan-to-value ratio of the mortgages in the MBS is...


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