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...

Ginnie Mae has announced revised rules for issuers seeking approval of changes in their business status due to an adversarial relationship with agencies, mergers, asset transfers or a change in ownership or control. The agency has been receiving many issuer requests and they are getting complicated, according to Ted Tozer, Ginnie Mae president. Issuers must comply with the updated guidance in order to remain an eligible participant in the Ginnie Mae mortgage-backed securities program. The guidance took effect immediately. Previously, issuers were required to notify Ginnie Mae in writing within five days of any material adverse change in their business relationships with Fannie Mae, Freddie Mac, FHA, VA, Rural Development, the Department of Housing and Urban Development’s Office of Public and Indian Housing or any other regulatory agency. Under the revised guidance, the ...

The average daily trading volume for agency MBS fell slightly to $187.6 billion in August from the prior month, the second lowest reading of the year, according to figures compiled by the Securities Industry and Financial Markets Association. Lower trading volume indicates that liquidity has been reduced somewhat, but there could be brighter days ahead: the eight-month daily trading average is a bit higher at $200.9 billion and if that figure holds for the rest of the year, it will surpass last’s year’s daily average of $177.9 billion. Then again, $200.9 billion wouldn’t be...

FHA jumbo securitization continued to rise over the first six months of 2015 on the back of soaring FHA jumbo production in the second quarter. FHA jumbo originations in the second quarter more than doubled to $6.8 billion, according to the Inside Mortgage Finance database. FHA data showed that the jumbo share of originations was highest in conventional-to-FHA refinance (14.9 percent) and streamlined FHA refis (13.3 percent,) but just 9.0 percent for purchase loans. Delivery of FHA jumbos, including modified loans, into Ginnie Mae jumbo mortgage-backed securities rose 131.9 percent in the second quarter from the prior quarter and was up 115.8 percent compared to the first six months of 2014. Wells Fargo led the market in the first half with $1.4 billion in jumbos contributed to MBS, up 123 percent quarter over quarter. That was good enough for a 12.7 percent market share. PennyMac Corp. accounted for ... [ chart ]

Ginnie Mae securitized fewer rural home loans guaranteed by the U.S. Department of Agriculture in the second quarter of 2015 compared to the previous quarter, according to analysis of agency data. A total of $8.4 billion of USDA loans were securitized during the first six months of 2015, down 2.1 percent from the same period last year. Securitization volume also dropped by as much quarter over quarter. Chase led all USDA securitizers with $2.6 billion in loans securitized during the first half of the year for a commanding 30.4 share of the market. Wells Fargo funneled $1.1 billion in USDA loans into Ginnie MBS, resulting in a 13.1 market share, while PennyMac delivered $609.7 million for securitization. U.S. Bank closed the first half with $260.3 million in securitized USDA mortgages despite a 31.4 percent drop in the second quarter. Pacific Union Financial rounded out the top five USDA loan securitizers with ... [ chart ]

FHA lenders funded $7.8 billion in new Home Equity Conversion Mortgage loans during the first half of 2015, up 8.2 percent from the same period a year ago. HECM loan production was slower in the second quarter with originations down 1.1 percent from the prior quarter. Purchase loans accounted for 86.1 percent of all HECM transactions during the first six months. Interestingly, borrower bias against adjustable-rate loans appeared to have eased. Fixed-rate HECMs accounted for only 15.4 percent of originations during the first half of the year. Initial principal amount at loan origination totaled $4.6 billion over the same period. On a fiscal year-to-date basis, the FHA reported a total of 53,372 HECM endorsements, up from 47,662 HECM endorsements in fiscal YTD 2014. Meanwhile, HECM endorsed cases increased to 5,750 in August compared to ... [ chart ]

The Securities and Exchange Commission has charged three MBS traders with fraud for inflating the prices of MBS they bought from and sold to investors. Former traders Ross Shapiro, Michael Gramins and Tyler Peters allegedly defrauded customers to illegally generate millions of dollars in revenue for their ex-employer, Nomura Holdings International. As senior traders with Nomura’s residential MBS desk since 2009, the brokers arranged trades between customers, meaning that each would buy MBS from one customer and resell them for profit to another customer. As head trader, Shapiro arranged MBS and manufactured housing ABS trades. According to the SEC, the traders’ illicit pricing took place...

Securitized FHA,VA and rural housing loans in Ginnie Mae mortgage-backed securities totaled $188.5 billion in the first six months of 2015, fueled by significant purchase and refinance activity, according to an Inside FHA/VA Lending analysis of Ginnie Mae data. An estimated $113.4 billion in FHA-insured mortgages were securitized during the first half of the year. Of that total, $60.6 billion were purchase mortgages and $44.2 billion were refinance loans. FHA purchase-loan production increased 58.8 percent in the second quarter from the prior quarter while refi lending jumped 160.8 percent over the same period as FHA’s reduced annual mortgage insurance premium began to take hold. The FHA loans that went into Ginnie MBS showed an average loan-to-value ratio of 92.8 percent and an average debt-to-income ratio of 39.7 percent. Borrowers’ average FICO score was 675.9, which was indicative of ... [ 2 charts ]

Two more long-running legacy MBS lawsuits were resolved last week after defendants Goldman Sachs and Deutsche Bank separately agreed to settle with plaintiffs. The NECA-IBEW Health & Welfare Fund, a union pension fund in Decatur, IL, is seeking preliminary court approval of a $272 million settlement with Goldman Sachs on behalf of entities that purchased MBS issued by defendant GS Mortgage Securities and which Goldman underwrote. If approved, the settlement would put...

The trajectory of delinquencies for U.S. timeshare ABS is continuing its downward trend, and issuance is expected to be near or perhaps even exceed last year’s level, with solid prospects for continued stable growth throughout the rest of the year, according to a consensus of industry analysts. U.S. timeshare ABS delinquencies fell again in the second quarter of 2015 to their lowest level in eight years, the latest index results from Fitch Ratings show. Total delinquencies for the second quarter were 2.66 percent, down from 2.79 percent in the first quarter and 2.92 percent a year ago. The ratings service has seen...