MBS Investors

Browse articles from all of our Newsletters related to MBS Investors.

December 7, 2018 - Inside The GSEs

KBW Analysts Expect Surge in REIT Participation in GSE CRT Deals

Real estate investment trusts will increasingly become key investors in the credit-risk transfer market, according to recent analysis by Keefe, Bruyette & Woods.

December 7, 2018 - Inside MBS & ABS

More Lenders Pondering a Move Into Correspondent Purchases, Especially in the Growing Non-QM Sector

As profit margins tighten in a softening origination market, more lenders are pondering a move into correspondent purchases, especially if the company is already table-funding mortgages in the wholesale channel.

November 30, 2018 - Inside Nonconforming Markets

Multiple Factors Boosting Non-Agency MBS Prices

The strong demand for non-agency mortgage-backed securities this year looks to be tied to a number of factors, according to industry analysts. ICE Data Services, a firm that tracks non-agency MBS prices, noted that the sector has been helped by large settlements involving legacy non-agency MBS. And investors are more comfortable with the legal liability associated with non-qualified mortgages, prompting significant securitization of the loans. Issuers are also experimenting with ...

November 30, 2018 - Inside MBS & ABS

SIFMA Faults Trustee’s Actions in Non-Agency MBS Buyback Case, Warns of Problems if Court Endorses

The handling of a lawsuit relating to repurchase activity on pre-crisis non-agency MBS could have a wide-ranging impact on the industry, according to the Securities Industry and Financial Markets Association.

November 30, 2018 - Inside MBS & ABS

Bank ABS Holdings Slide Lower in 3Q18 As Overall Market Continued to Expand

Commercial banks and savings institutions added to their holdings of certain categories of non-mortgage ABS during the third quarter, but the industry’s total ABS portfolio was down slightly, according to a new Inside MBS & ABS analysis of call-report data. [Includes three data charts.]

November 23, 2018 - Inside MBS & ABS

Chart: GSE Mortgage Securities Holdings 3Q18

November 23, 2018 - Inside MBS & ABS

Bank/Thrift Holdings of Single-Family MBS Drift Lower in 3rd Quarter Despite Sizable Gains in Some Portfolios

Residential MBS holdings of commercial banks and savings institutions declined 0.7 percent during the third quarter, according to a new Inside MBS & ABS analysis of call-report data. [Includes two data charts.]

November 16, 2018 - Inside FHA/VA Lending

GNMA’s Liquidity Concerns Prompt Demand for Contingency Plans

Increasingly worried about the financial condition of its largest nonbank issuers amid declining market conditions, Ginnie Mae in late October shot off a liquidity letter to 14 companies, asking them to develop contingency plans. The identity of the firms was not revealed to Inside FHA/VA Lending, but it’s no secret which companies rank among the top echelon of issuer/servicers. The five largest nonbank Ginnie MBS servicers as of Sept. 30 are PennyMac Financial Services, Lakeview Loan Servicing, Freedom Mortgage, Quicken Loans and Mr. Cooper. According to the letter, a copy of which was obtained by this publication, Ginnie wants the companies to develop strategies to right-size their operations. One of the agency’s goals is to lay the groundwork for financial stress tests that all issuer/servicers eventually must meet. Ginnie expects to sit down with the executive management teams of the ...

November 16, 2018 - Inside FHA/VA Lending

Ginnie Mae Continues to Tighten Issuer Standards, Accountability

This week, Ginnie Mae issued an all-participants memo dictating new standards for firms seeking to become issuers, including the stipulation that applicants submit to a corporate credit evaluation. Ginnie said the financial exercise will be “similar to those employed by credit rating agencies.” The evaluation will determine whether an applicant is qualified to be an issuer or whether additional criteria should be imposed even if the basic standards are met. Applicants that rely on a subservicer arrangement will be scrutinized even more. The bulletin also notes that, effective immediately, the agency is implementing new notification requirements for MBS issuers engaged in “certain subservicer advance or servicing income agreements, which do not require prior Ginnie Mae approval, but can impact an issuer’s ongoing liquidity position and financial obligations.” While Ginnie currently permits subservicers to advance ...

November 16, 2018 - Inside Nonconforming Markets

Demand for Jumbos Boosts Redwood in 3Q

Strong demand in the secondary market for jumbo mortgages lifted Redwood Trust’s mortgage banking income during the third quarter even though the volume of loans it acquired declined. Redwood had $11.24 million in non-interest income from mortgage banking activities in the third quarter, up 5.9 percent from the previous quarter. The metric tracks Redwood’s loan aggregation and sales. The real estate investment trust’s jumbo conduit acquired mortgages with an unpaid principal balance ...

November 16, 2018 - Inside Nonconforming Markets

REITs Show Increasing Interest in Non-Agency

Demand for non-agency products, including non-qualified mortgages, is growing among real estate investment trusts. A number of REITs have ramped up their investments in the non-agency sector, with some issuing mortgage-backed securities. Annaly Capital Management, the largest mortgage REIT, had $525.0 million in residential whole loans at the end of September, up from $392.0 million a year ago. The REIT didn’t disclose the total unpaid principal balance of its whole-loan holdings ...

November 16, 2018 - Inside MBS & ABS

Ellington Financial to Convert to REIT Status; Cites Significant Tax Savings

Tax cuts signed into law at the end of 2017 prompted Ellington Financial to make plans to convert from a partnership to a real estate investment trust. The maneuver will require the company to sell some holdings that don’t meet REIT asset requirements, including collateralized loan obligations and investments in foreign MBS.

November 16, 2018 - Inside MBS & ABS

REIT MBS Holdings Grow in 3Q18 as Industry Continues to Consolidate

Real estate investment trusts boosted their holdings of residential MBS during the third quarter, a period when two firms were acquired by larger players. [Includes one data chart.]

November 9, 2018 - Inside The GSEs

FHFA Releases GSE CRT Progress Report for First Half of 2018

Fannie Mae and Freddie Mac transferred risk on about $367 billion of unpaid principal balance in the first half of the year as the GSEs target a larger share of single-family loans. The Federal Housing Finance Agency published a credit-risk transfer progress report last week highlighting activity through the second quarter of 2018. This report marks the first time the FHFA is reporting the percentage of the GSEs’ targeted single-family and multifamily acquisitions that are covered by credit-risk transfer ...

November 9, 2018 - Inside The GSEs

Fannie Inaugurates REMIC Structure Latest CRT Deal

Fannie Mae’s last Connecticut Avenue Securities credit-risk transfer transaction of the year featured its first use of a structure geared toward attracting more investors. CAS Series 2018-R07, a $922 million offering, is Fannie’s first risk-transfer deal involving a real estate mortgage investment conduit (REMIC). Both Fannie and Freddie see REMICs as a key to unlocking greater participation by real estate investment trusts and offshore investors. Freddie issued its first CRT using a REMIC ...

November 8, 2018 - Inside MBS & ABS

Goldman Nears Settlement Goal, DOJ to File MBS Suit Against UBS, BofA Settles, MBIA Chalks Up Win

Goldman Sachs has forgiven a total of $78.7 million in principal on 746 first-lien mortgages since Aug. 1, 2018, as it neared fulfillment of a $1.8 billion consumer-relief obligation under two mortgage-related settlement agreements, according to independent monitor Eric Green.

November 8, 2018 - Inside MBS & ABS

Mortgage REITs Keep Selling Shares and Raising Cash. What Will They Do With the Added Capital?

So far this year, publicly traded real estate investment trusts that specialize in mortgages have raised $4.8 billion by selling additional shares of stock, on par with what they did all of last year. Now, comes the big question: What are they doing with all that money?

November 8, 2018 - Inside MBS & ABS

Federal Regulators’ Proposal to Loosen Capital/Liquidity Requirements Could Prompt Banks to Cut MBS Holdings

A proposal issued by federal regulators last week to ease certain standards for capital and liquidity will likely prompt banks to reduce their holdings of MBS, according to industry analysts. The complex proposal could prompt a $65.0 billion reduction in bank holdings of MBS, according to estimates by the Federal Reserve and Wells Fargo Securities.

November 2, 2018 - Inside FHA/VA Lending

GNMA Sees Growing Need for Financing of Nonbank MSR

Ginnie Mae officials would welcome a return of commercial banks to the program, but they are not planning on it. Instead, the agency is looking the other way: at expanding financing options for nonbank portfolios of mortgage servicing rights. The current version of Ginnie’s acknowledgement agreement has been successful, enabling nonbank servicers to arrange MSR financing for virtually their entire portfolios, said Michael Drayne, a senior vice president at Ginnie, during the Residential Mortgage Finance Symposium sponsored by the Structured Finance Industry Group this week in New York. Although a number of banks are financing nonbank servicing portfolios, many are still not participating, he said. Karen Gelernt, a partner at Alston & Bird, noted that many banks continue to have anxiety about what will happen if a servicer defaults on its Ginnie requirements. Speaking as moderator on a panel with ...

November 2, 2018 - Inside Nonconforming Markets

Verus Changes Course with Structure of MBS

An affiliate of Verus Mortgage Capital revised the structure of a planned non-agency mortgage-backed security, opting for a more traditional approach after initially planning to test a unique variation. The planned closing date for the $442.3 million issuance was also pushed back. When presale reports for Verus Securitization Trust 2018-3 were published in mid-October, the deal was structured with an initial pro rata structure that would shift to a sequential structure. The MBS ...

November 2, 2018 - Inside Nonconforming Markets

NRZ Looking for Non-QMs Beyond New Penn

New Residential plans to be a consistent issuer of mortgage-backed securities with non-qualified mortgages and the real estate investment trust is not just looking for loans from its recently acquired New Penn Financial. The first non-QM MBS from New Residential closed this week. All of the loans in the deal were originated by New Penn, an originator New Residential acquired in early July. Michael Nierenberg, chairman, president and CEO of New Residential, said the REIT is ...

November 1, 2018 - Inside MBS & ABS

Large Investor Preparing Clients for UMBS, Recommends Combining Mortgage Concentration to Avoid Challenges

One large fixed income investor is working with clients now to make sure they’re prepared to invest in the new single security when it rolls out next summer. Western Asset Management is advising investors to consider aggregating their mortgage concentration and exposure limits for the uniform MBS that Fannie Mae and Freddie Mac will issue in the to-be-announced market.

November 1, 2018 - Inside MBS & ABS

SFIG Plows Ahead on RMBS 3.0 Best Practices, Tackling Arbitration, Materiality, Other Issues

The Structured Finance Industry Group continues to wrestle with the demons of the past, the myriad issues that contributed to the downfall of the MBS and ABS markets a decade ago. Individuals working on various workstreams offered progress reports, stressing that the project is focused on best practices rather than rigid standards, at the group’s Residential Mortgage Finance Symposium in New York this week.


With loan volumes declining, does your shop have plans to enter the non-QM lending market in 2019?

Yes, definitely. A solid move forward.
Yes, but only incrementally.
We’re pondering a move into non-QM, but haven’t made up our mind.
No, definitely not. We view it has too risky.

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