MBS & ABS Performance

Browse articles from all of our Newsletters related to MBS & ABS Performance.

August 17, 2018 - Inside The GSEs

Purchase-Mortgage Boost Can’t Offset Falling Refi in July MBS

Fannie Mae and Freddie Mac issued a combined $65.85 billion of single-family mortgage-backed securities last month, a 1.0 percent decline from their June total, according to an Inside The GSEs analysis of MBS data. Compared to the first seven months of 2017, the GSE single-family business was down 7.4 percent as of the end of July. Most of the month-to-month slump was at Freddie, where MBS production fell 8.9 percent from June. Fannie managed a 5.0 percent increase in July. Both GSEs are off about the same on a year-to-date basis. [Includes two data charts.]

August 17, 2018 - Inside MBS & ABS

Ginnie Officials Describe Counterparty Risk Tools, Saying Everybody’s in the Same Boat

Ginnie Mae officials described a two-pronged approach to assuring MBS investors that the agency is protecting their interests from the risk that issuers might fail to deliver principal and interest payments in a timely manner.

August 17, 2018 - Inside MBS & ABS

Long Foreclosure Timelines Have Only Small Impact on RMBS Losses, Said Moody’s

Mortgage servicers and investors often complain about long foreclosure timelines in states with a judicial foreclosure process, but Moody’s Investors Service said the delays will only marginally increase losses on residential MBS.

August 10, 2018 - Inside FHA/VA Lending

USDA Issuance Down at Midpoint From 2017, Up in Second Quarter

Fewer rural single-family mortgages and modified home loans with a USDA guarantee were securitized during the first six months of 2018 compared to last year. Delivery of USDA loans into Ginnie Mae pools over the last two quarters totaled $8.6 billion, down 10.1 percent from the same period last year but up 12.4 percent in the second quarter from the prior period. PennyMac topped all USDA issuers with $1.7 billion worth of rural housing MBS issued during the first half of 2018, up 22.1 percent year-over-year. New issuance also rose 30.0 percent in the second quarter from the previous quarter, enough for a 20.2 percent share of the securitized USDA market. ... [chart]

August 10, 2018 - Inside FHA/VA Lending

MBA Urges Congress to Fix Problem of ‘Orphaned’ VA Mortgage Loans

The Mortgage Bankers Association called upon Congress to pass legislation to restore Ginnie Mae eligibility for so-called orphaned VA loans, which have caused a temporary disruption in the government-backed secondary market. In written testimony to the Senate Committee on Veterans’ Affairs last week, the MBA urged lawmakers to make technical corrections to restore the eligibility of certain Interest Rate Reduction Refinance Loans for pooling. The MBA estimated the VA orphan loan mess at roughly $500 million. Due to new loan seasoning requirements in the recently enacted Economic Growth, Regulatory Relief, and Consumer Protection Act, sime IRRRLs were rendered ineligible for Ginnie MBS pools. The loans were in transit when legislation addressing the problem of VA loan churning and serial refinancing became law in May. The new law’s seasoning provisions turned out to be ...

August 10, 2018 - Inside MBS & ABS

More Losses to Come in Commercial MBS Due to Rising Appraisal Reductions, Warns KBRA

Appraisal reductions in post-crisis commercial MBS are rising rapidly and may be a harbinger of future loan losses, warned Kroll Bond Rating Agency.

August 3, 2018 - Inside MBS & ABS

MBS and ABS Issuance at a Glance: August 3, 2018

A full page of issuance data and MBS market indicators.

August 3, 2018 - Inside MBS & ABS

Prepayment Speeds on PACE ABS Are Expected to Quicken, and New Originations May Decline

The prepayment rates for ABS backed by Property Assessed Clean Energy programs are on the rise which can have mixed effects on the notes, warned Morningstar Credit Ratings in a new report. The monthly annualized conditional prepayment rates averages for residential PACE ABS rated by Morningstar have been increasing from “single digits to high teens” since 2016, said the credit rating service. “Investors should pay attention to prepayment rates because they can have ...

August 3, 2018 - Inside MBS & ABS

S&P Reports Old CLO Classes Show Few Defaults; Moody’s Warns of Hidden Investor Risks in Docs

A report from a Standard & Poor’s structured finance team says several collateralized loan obligation transactions rated between 1994 and 2009 are about to close with minimal defaults while a re-port from Moody’s Investors Service warns that apparently harmless provisions of CLOs can actually increase risks to investors. It has been nearly a decade since the last CLO 1.0 deal was issued, and the last of these transactions are nearing the end of their lives, according to ...

August 3, 2018 - Inside MBS & ABS

Credit Card ABS Stable as Stores Close, Performance Expected to Worsen Due to Consumer-Related Issues

Closures of stores that issued credit cards haven’t prompted a significant uptick in charge-offs in recent years, according to Fitch Ratings. Analysts suggest that consumer-related trends remain the main driver of credit card ABS performance, and performance looks poised to decline. A number of retail card issuers have declared bankruptcy, closed large numbers of stores or liquidated in recent years. Fitch analyzed the relevance of the aggregate number of locations closed per ...

July 27, 2018 - Inside Nonconforming Markets

News Briefs

Moves by three issuers of prime non-agency mortgage-backed securities to allow for third-party due diligence reviews to be completed on fewer than 100 percent of the loans in an MBS could increase the risk of losses for MBS investors, according to Moody’s Investors Service. In a report released this week, Moody’s said narrower due diligence reviews increase the likelihood of defective loans appearing in non-agency MBS. The rating service added that representations ... [Includes five briefs]

July 27, 2018 - Inside MBS & ABS

Credit Rating Agencies Concerned About the Rise of Underperforming Commercial IO Mortgages

Interest-only loans represent a growing share of collateral securitized by commercial MBS conduits over the past few years. Credit rating agencies are concerned because IO loans generally perform worse than amortizing mortgages.

July 27, 2018 - Inside MBS & ABS

MBS and ABS Issuance at a Glance: July 27, 2018

A full page of issuance data and MBS market indicators.

July 20, 2018 - Inside MBS & ABS

MBS and ABS Issuance at a Glance: July 20, 2018

A full page of issuance data and MBS market indicators.

July 13, 2018 - Inside FHA/VA Lending

Seasonal Factors Boost Ginnie Mae MBS Issuance in Second Quarter

The spring homebuying season fueled a relatively modest increase in production of Ginnie Mae single-family mortgage-backed securities during the second quarter of 2018, according to a new Inside FHA/VA Lending ranking and analysis. Lenders issued $98.66 billion of Ginnie MBS backed by forward mortgages during the April-May cycle. That was up 6.6 percent from the first three months of the year, but 2018 continued to lag behind the pace set in 2017 by 10.7 percent. Given current trends, annual Ginnie MBS issuance in 2018 could fall short of the $400 billion mark for the first time since 2014. The flow of FHA and VA purchase mortgages was up a solid 23.7 percent from the first to the second quarter, bringing the total for the first half of the year to $121.01 billion. However, that was down 4.7 percent from the same period in 2017. Ginnie securitized $75.02 billion of FHA purchase loans in the ... [Charts]

July 13, 2018 - Inside Nonconforming Markets

Fitch Flags R&W from Issuers It Doesn’t Rate

A handful of issuers of non-agency mortgage-backed securities not rated by Fitch Ratings were called out in a report by the rating service regarding representations and warranties. The report released at the end of June detailed how reps, warrants and enforcement provisions for various issuers compare with a “full” rep-and-warrant framework established by Fitch. The rating service includes an assessment of reps and warrants for all of the non-agency MBS the firm rates but the report also ...

July 12, 2018 - Inside MBS & ABS

Fitch Warns of Differences in ‘Full’ Representations and Warranties from Various Issuers of Non-Agency MBS

Non-agency MBS investors might not be aware of the differences in representations and warranties provided by issuers of new non-agency MBS, according to Fitch Ratings. In a recent report, the rating service noted that issuers are diverging from standard practices in terms of “full” rep-and-warrant frameworks.

July 12, 2018 - Inside MBS & ABS

Moody’s Says Expanded QM Standard is Credit Negative For Nonprime RMBS, but Industry Expert Disagrees

The easing of qualified-mortgage standards under the Dodd-Frank reform bill could be credit negative for nonprime residential MBS backed by loans originated by nonbanks, Moody’s Investors Service said. But an industry expert disagrees.

July 12, 2018 - Inside MBS & ABS

Conventional MBS Trading Volume Slipped in June, But Non-Agency Sales Hit a High for the Year

The average daily trading volume in agency MBS fell to $223.2 billion in June, a slight decline from the month prior, according to figures compiled by the Securities Industry and Financial Markets Association.

July 6, 2018 - Inside The GSEs

Purchase Market Springs to Life In 2Q18; Freddie Regains Share

Freddie Mac saw a strong rebound in its single-family business during the second quarter following a sluggish start to the year. Freddie guaranteed $82.23 billion of single-family mortgage-backed securities during the second quarter, a romping 28.6 percent increase from the first three months of the year. The GSE produced just $63.93 billion of MBS in the first three months of 2018, its slackest quarter in almost four years. Fannie’s single-family business was off slightly in the second quarter as MBS issuance declined to $111.36 billion – its weakest output since the first three months of 2016. [Includes two data charts.]


With mortgage production down noticeably this year from 2017, how many lenders might disappear via M&A or failure during the next 12 months?

10% or less. It’s not that bad out there.


11% to 25%. It’s a challenging market.


25% to 40%. It’s going to be very ugly.


No opinion.