Securities

Browse articles from all of our Newsletters related to Securities.

September 22, 2017 - IMFnews

What We’re Hearing: A GSE ‘Black Swan’? / More TBTF, Perhaps / A Dividing Issue: Zero Capital / Will Mnuchin Cut a Deal with Speculators? / Waiting on a Ginnie Mae Nominee (Still) / A New Business Home for Anne Canfield

An impossible scenario, one that keeps Federal Housing Finance Agency Director Mel Watt up a night? We shall see...


September 22, 2017 - IMFnews

Trade Groups Tell Treasury and FHFA: Legislation for GSE Reform, No Recap and Release

In a research note published Friday, Cowen & Co. notes the letter is an indication these groups believe allowing the GSEs to retain capital will prolong the conservatorships.


September 22, 2017 - IMFnews

Non-Agency MBS Issuance Constrained by a Lack of Supply

Matt Nichols, CEO of Deephaven Mortgage, a company that has issued nonprime MBS in recent years, said the main impediment to nonprime MBS is supply.


September 22, 2017 - Inside MBS & ABS

MBS & ABS Issuance at a Glance

One page of issuance data.


September 22, 2017 - Inside MBS & ABS

Government Sues Deutsche Bank Employee for Allegedly Misleading MBS Investors into Buying Faulty Loans

A former Deutsche Bank employee is at the center of a lawsuit brought by the government over the sale of more than $1 billion of non-agency MBS. It’s rare when the government focuses on an individual for mortgage fraud, but the Department of Justice said the bank’s former head of subprime trading allegedly defrauded investors out of hundreds of millions of dollars. The civil complaint was filed in Brooklyn’s federal court against Paul Mangione for knowingly selling bad subprime mortgages financed during the crisis and misleading investors about loan quality. The complaint alleges that he engaged in fraudulent schemes involving the origination practices of Deutsche Bank’s subsidiary, DB Home Lending LLC, which originated the bulk of the loans. The securities were sold...


September 22, 2017 - Inside MBS & ABS

MBS Trading Volume Remained Light In August; Maybe a Fed Exit Will Help

The average daily trading volume in agency MBS totaled a tepid $199.8 billion in August, the lowest reading since May, according to figures compiled by the Securities Industry and Financial Markets Association. Then again, volume wasn’t too far off trading activity in the prior two months, which came in at $200.5 billion and $200.9 billion. It appears that investors haven’t had...


September 22, 2017 - Inside MBS & ABS

Ginnie Mae-VA Task Force to Crack Down on Serial Refinance Abusers, Will Expel Program Violators

Ginnie Mae and the Department of Veterans Affairs have created a joint task force to deal with improper early refinancing of VA loans – a practice the agencies thought they had eliminated but which has reemerged in the last couple of weeks. The task force will be monitoring closely monthly VA refinancing data and will develop additional policies to augment the current policy, which Ginnie, in consultation with the VA, issued last year to curb churning of VA loans in its MBS. Responding to concerns raised by Sen. Elizabeth Warren, D-MA, acting Ginnie President and Chief Operations Officer Michael Bright acknowledged...


September 22, 2017 - Inside MBS & ABS

Fed Announces MBS Reinvestments Will Begin to Slow in October, Next Rate Hike Seen in December

The great unwinding of the Federal Reserve’s massive intervention in the MBS market post-financial crisis is set to begin soon. This week, surprising no one, the U.S. central bank’s Federal Open Market Committee announced it will start to normalize its huge balance sheet next month along the parameters it first outlined in June. From October through December, the decline in the Fed’s securities holdings will be capped at $6 billion per month for Treasuries and $4 billion per month for agency MBS. Next year, the declines will gradually increase to $30 billion a month for Treasuries and $20 billion a month for MBS. Fed Chair Janet Yellen reiterated...


September 22, 2017 - Inside MBS & ABS

Non-Agency MBS Issuance Constrained by a Lack Of Supply, Some Investors Move on to Other Products

Issuance of non-agency MBS backed by newly originated home loans remains well below levels seen before the financial crisis. While new regulations have stopped some pre-crisis loan types from being originated, industry participants suggest that other major factors are also limiting the supply of loans available for MBS. Chris Helwig, a managing director at Amherst Pierpont, noted that banks are competing for prime jumbos and holding them in portfolio, and many borrowers who previously might have received subprime mortgages opt for FHA loans. “All that is left for non-agency MBS is...


September 22, 2017 - Inside MBS & ABS

Exceptionally Strong Liquidity for MBS and ABS As Investor Demand for Securities Outpaces Supply

MBS and ABS investors have more cash than they know what to do with, according to participants at the ABS East conference sponsored by Information Management Network this week. “Liquidity is strong across the spectrum and probably the best we’ve ever seen for structured products,” said Scott Levy, a senior managing director at Guggenheim Securities. He noted that three years ago, some of the securities the firm was involved with had 15 investors; now, similar deals might have 70 investors. “There’s a lot of demand and a lot less supply,” Levy added. More than 4,100 people registered...


September 22, 2017 - Inside MBS & ABS

Single-Family MBS Market Plugging Along, Banks And Overseas Investors Were Top Buyers in 2Q17

The supply of outstanding residential MBS in the market continued to grow at a measured pace during the second quarter of 2017, thanks to the robust single-family MBS machines at Fannie Mae, Freddie Mac and Ginnie Mae. A total of $6.675 trillion of single-family MBS was outstanding as of the end of June, according to a new Inside MBS & ABS analysis. That was up 0.8 percent from the end of March, and it represented a record 64.0 percent of outstanding single-family mortgage debt. The Federal Reserve this week reported that home loan debt outstanding rose 0.7 percent to $10.430 trillion during the second quarter. All the MBS growth was...[Includes three data tables]


September 22, 2017 - IMFnews

MBS Market Plugging Along, Banks and Overseas Buyers Top Investors in 2Q17

Commercial banks were one of the most active buyers of residential MBS during the April-June cycle...


September 21, 2017 - IMFnews

15 Groups Tell Treasury and FHFA: Legislation to Reform the GSEs, Not Some Recap Plan

The signors add: “We … believe the debate over recapitalizing a broken system distracts from the critical structural issues that Congress must address to ensure that the federally supported secondary market serves key, bipartisan objectives.”


September 21, 2017 - IMFnews

Finance of America Enters the Correspondent Channel, Focusing on CUs and Community Banks

Finance of America’s backers include The Blackstone Group…


September 20, 2017 - IMFnews

Liquidity in the MBS and ABS Markets: As Strong as It’s Ever Been…

“Liquidity is strong across the spectrum and probably the best we’ve ever seen for structured products,” said Scott Levy, a senior managing director at Guggenheim Securities…


September 19, 2017 - IMFnews

Short Takes: About Those GSE Dividend Payments… / The Man Wants to be Paid / Record Attendance at ABS East / LendingTree Buys Snap Capital / Webster Gets a New President

In other words, the FHFA will once again order the dividends to be paid to Treasury. Right?


September 19, 2017 - IMFnews

House FSC to Work on GSE Reform Again. (Hint: It Looks like the PATH Act)

At the ABS East show, Rep. Barr didn’t provide further details about Republican plans for the GSEs…


September 18, 2017 - IMFnews

Prestwick Selling $1.8 Billion Bulk Fannie/Ginnie MSR Portfolio

The Fannie balance of the pool accounts for $1.33 billion of the receivables.


September 15, 2017 - Inside MBS & ABS

MBS & ABS Issuance at a Glance

One page of issuance data.


September 15, 2017 - Inside MBS & ABS

Methods Used to Comply With Risk-Retention Rules Vary Among ABS Asset Classes, Moody’s Finds

Issuers of ABS are utilizing diverse structures to comply with the risk-retention requirements of the Dodd-Frank Act, according to a new sector commentary by analysts at Moody’s Investors Service. “Although securitization sponsors’ retention of portions of their own deals in general is credit positive … the rules have effectively just formalized prior common industry practices for many consumer ABS subsectors. This confirms our initial stance that the rules are only marginally credit positive for this sector,” said Vice President and Senior Analyst Yan Yan and Vice President and Senior Credit Officer Jingjing Dang. “That said, the methods of compliance that have emerged among ABS asset classes since the rules went into effect in December have varied.” Their first take-away is...


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 15, 2017 - Inside MBS & ABS

Vintage CDO Investors Try to Force a Bankruptcy that SFIG Warns Would Destabilize Securitization Industry

A dispute involving the liquidation of a vintage collateralized-debt obligation has the potential to upend standard practices and confidence in the securitization industry, according to the Structured Finance Industry Group. Senior investors in Taberna Preferred Funding IV – a $673.3 million CDO issued in 2005 – are seeking to force a liquidation of the deal via bankruptcy. The bankruptcy is being pursued by a group of investors identified as Opportunities II Ltd., HH HoldCo Co-Investment Fund, L.P., and Real Estate Opps Ltd. The investors appear to have purchased senior tranches of the CDO only in recent years. SFIG filed...


September 15, 2017 - Inside MBS & ABS

Freddie Mac G-fee Pricing Taking Cues from Credit-Risk Transfers and the Private Market

Credit-risk transfers can be used to calculate guarantee fees because they’re indicative of what the private market would charge for the risk taken on by a government-sponsored enterprise, according to Freddie Mac. But the mortgage giant explained that g-fees are likely more stable than a system that relies exclusively on credit-risk transfers. Kevin Palmer, Freddie’s senior vice president of single-family credit risk transfers, said in a white paper the significant amount of credit risk being transferred to the private capital markets provides a way to calculate a market-implied g-fee. Since 2013, the GSE has transferred much of the credit risk on $760 billion of MBS it guarantees. Based on the pricing of Freddie’s Structured Agency Credit Risk transactions over the past year, the market-implied g-fee has been...


September 15, 2017 - Inside MBS & ABS

Thriving Market for Securities Backed by Timeshare Loans: Low Delinquencies and Attractive Yields

An affiliate of Interval Leisure Group priced a timeshare securitization last week as the market for such deals keeps humming along. Timeshare securities are backed by vacation ownership interest loans that tend to perform relatively well and carry attractive yields. Some $2.0 billion of timeshare ABS have priced this year, according to S&P Global Ratings. In all of 2016, $2.6 billion of timeshare ABS was issued, according to the Securities Industry and Financial Markets Association. VSE 2017-A VOI Mortgage from ILG is...


September 15, 2017 - Inside MBS & ABS

Mortgage Securitization Rate Sinks in 2Q17 as Primary Market Races Ahead of MBS Platforms

The seasonal surge in primary market mortgage originations stood in stark contrast to a slump in new residential MBS issuance during the second quarter of 2017. Mortgage lenders originated an estimated $455.0 billion of new first-lien loans during the April-June cycle, an 18.2 percent increase from the first three months of the year, according to estimates by Inside Mortgage Finance. But the secondary market generated just $294.7 billion in MBS backed by purchase and refinance loans – a 5.3 percent decline. The result was...[Includes one data table]


September 15, 2017 - Inside MBS & ABS

Treasury Discussing GSE Issues with Trade Groups; Multiple Guarantors, Capital Are on the Table

Over the past several weeks, the Treasury Department has been meeting with several industry trade groups about the future of Fannie Mae and Freddie Mac, discussing – among other things – what to do about the impending “zero capital” problem as well as the topic of multiple guarantors. Treasury’s goal, these officials said, is to come up with a workable blueprint on the future of the government-sponsored enterprises and the nation’s housing finance system – changes that might touch Ginnie Mae as well. Late this week there was...


September 15, 2017 - IMFnews

Mortgage Securitization Rate Sinks in 2Q17

Roughly 27.3 percent of Fannie Mae, Freddie Mac and Ginnie Mae loans pooled in securities in the first half of 2017 were a month old at issuance, and 6.4 percent were two or three months old.


September 15, 2017 - IMFnews

Treasury Taking Meetings on GSE Issues, Including Zero Capital and Multiple Guarantors

Rob Zimmer, a former Freddie Mac executive: “Republicans run this town, obviously, and there is no way they want to be identified as the party of taxpayer bailouts for large financial institutions.”


September 14, 2017 - IMFnews

Another Bank May Enter the Jumbo MBS Market, Signaling a Potential Shift from Portfolio Retention

“We’ve gotten wind that we could see at least one other large money center bank enter the securitization markets,” said Christopher Abate of Redwood Trust…


September 14, 2017 - IMFnews

Agency-Jumbo Production Sagged in 2Q17 While Non-Agency Sector Kept Growing

But the non-agency jumbo market saw a healthy 18.6 percent increase in originations…


September 14, 2017 - IMFnews

Redwood Sourcing ‘Expanded Prime’ Jumbos from Hundreds of Correspondents

Redwood Trust has approved 185 originators to sell Choice loans directly…


September 13, 2017 - IMFnews

When Loan Demand is Strong, Consumers Get Bad Pricing?

The researchers tracked lender rate sheets from 2008 through 2014…


September 13, 2017 - IMFnews

Warehouse Commitments to Nonbanks Top $64 Billion

“A number of companies are expanding the lines they need,” said Larry Charbonneau. “I’ve been doing a number of reviews for warehouse banks lately. Volume is definitely picking up.”


September 13, 2017 - IMFnews

In the Wake of Hurricane Irma, ABS East Securitization Show is Still a Go for Miami Beach

Information Management Network will contribute proceeds from the conference to aid hurricane relief efforts.


September 13, 2017 - IMFnews

Brian Montgomery (Finally) Picked for FHA Chief. Kittle for Ginnie Prez?

If confirmed by the Senate, it would be Montgomery’s second go at the FHA post, a position he held in the administration of George W. Bush.


September 12, 2017 - IMFnews

Short Takes: Former DB Exec Paul Mangione Slammed in DOJ Civil Complaint / Fort Schuyler Advisors? / Angel Oak Passes $7B Mark / Richard Cordray? / A New CFO for LenderLive

As IMFnews went to press, Mangione could not be reached for comment. He currently heads Fort Schuyler Advisors...


September 12, 2017 - IMFnews

On a Roll: Fourth Consecutive Monthly Gain for GSE MBS Issuance

Fannie and Freddie lost some market share during the second quarter, according to preliminary figures compiled by Inside The GSEs.


September 8, 2017 - Inside MBS & ABS

MBS & ABS Issuance at a Glance

One page of issuance data.


September 8, 2017 - IMFnews

Hurricane Damage: Despite Consumer Moratoriums, MBS Issuers Must Keep Making Payments

Just because consumers might be off the hook for at least 90 days on making their payments, MBS investors will want their money, noted on observer…


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

Once Banks Got LCR Compliant, They Opted For More GSE MBS, Fed Researchers Find

Partly to comply with liquidity cover ratio requirements imposed in the wake of the financial crisis, U.S. banks ramped up their holdings of high-quality liquid assets. But once they got compliant, many of them shifted their asset allocations more to agency MBS and U.S. Treasuries, according to researchers at the Federal Reserve. This could have implications for the U.S. central bank’s massive balance sheet over the long haul, they added. As of Jan. 1, 2015, large banks in the U.S. have needed...


September 8, 2017 - Inside MBS & ABS

Fannie Details Additional Considerations for Proposed REMIC Structure for CRT Deals

Fannie Mae and Freddie Mac appear poised to go ahead with their plans to structure future credit-risk transfer debt offerings as real estate mortgage investment conduits to expand the investor base. “No significant concerns have been raised to date, and, provided that the market continues to respond favorably, we expect to conclude our feedback period soon,” said Fannie. Back in May, the government-sponsored enterprises announced...


September 8, 2017 - Inside MBS & ABS

Firm Looks to Help PLS Lenders, Aggregators Prepare For New Regulation and Requirement Landscape

Private-label issuance all but disappeared since the recession and is finally expected to make a comeback, but lenders and aggregators will have a host of new requirements to meet. One firm is planning to help the industry navigate today’s landscape by offering a solution aimed at non-agency MBS readiness for new and old issuers. Clayton Holdings announced last week that it designed a program to help lenders and aggregators with their due diligence by understanding and preparing to comply with the new rules surrounding securitizing these non-agency assets. The firm hopes...


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

Hurricane Damage: Despite Moratoriums on Default Loan Processing, MBS Issuers Must Keep Making Payments

Although Fannie Mae, Freddie Mac and Ginnie Mae have all granted consumer forbearance on homes damaged by this season’s hurricanes, servicers must continue to make payments to MBS investors in most circumstances, a situation that could affect thinly capitalized nonbanks. In particular, smaller privately held nondepositories that became Ginnie issuers this decade could face some financial headwinds, depending on how heavily concentrated their business has been in the Texas Gulf region and south Florida. As Inside MBS & ABS went to press late this week, it was...


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...


September 8, 2017 - IMFnews

Agency MBS Issuance Up Again in August as Refi Business Shows Renewed Strength

The agencies saw an 8.6 percent increase in refi volume from July to August, roughly triple the growth rate of the purchase-money business…


September 8, 2017 - Inside MBS & ABS

Agency MBS Issuance Up Again in August as Refinance Business Shows Renewed Strength

New issuance of agency single-family MBS rose for the fifth straight month in August, including an unexpected boost from refinance activity, according to an Inside MBS & ABS ranking and analysis. Fannie Mae, Freddie Mac and Ginnie Mae issued $120.10 billion of single-family MBS last month, a 6.9 percent climb from July’s total. August represented the second biggest month of 2017 but fell short of the $134.21 billion issued back in January. At that point, the MBS market was digesting a strong wave of refinance loans that quickly deteriorated over the following months. But the agencies saw...[Includes two data tables]


September 7, 2017 - IMFnews

It’s Official: Lone Star’s New Security Largest Post-Crisis Nonprime MBS To Date

The new security is backed solely by loans from Caliber...


September 7, 2017 - IMFnews

ICBA Says Government Seizure of Fannie and Freddie was ‘Questionable at Best’

ICBA’s comment marks the first time that a major industry trade group has questioned putting Fannie and Freddie into conservatorship…


Poll

The year is almost 75% done. How is mortgage origination volume at your shop?

We will fund about the same as we did in 2016.
We will fund more than last year – by a little.
We will fund more than last year – by a lot.
We will fund less than last year – by a little.
We will fund less than last year – by a lot.

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