A new nonprime MBS from an affiliate of Lone Star Funds has two significant distinctions: it’s the first post-crisis nonprime MBS backed by new originations to receive a AAA rating and it’s the largest post-crisis nonprime MBS backed by new originations. COLT 2016-3 Mortgage Loan Trust received AAA ratings from DBRS and Fitch Ratings. “Over the past year, Fitch has become more comfortable with the operational risk of the issuer through extensive due diligence results, multiple ...

Total FHA and VA originations increased during the first nine months of 2016 compared to the same period last year, although VA was more active, posting a double-digit production increase, according to an analysis of Ginnie Mae data. Lenders delivered $201.0 billion of FHA loans to Ginnie single-family mortgage pools over the last three quarters, up 4.8 percent from the previous year. Approximately 65.4 percent and 29.3 percent of FHA loans securitized were purchase loans and refinances, respectively. The remainder was loan modifications. VA originations totaled $143.2 billion over the same period, up 22.3 percent from last year. Refinances accounted for 51.9 percent of volume and purchase loans comprised 47.0 percent. The share of FHA loans in agency mortgage-backed securities for the nine-month period was 19.5 percent and 13.9 percent for VA. FHA loans accounted for ...

An affiliate of Bayview Asset Management is preparing to issue a non-agency MBS backed by nearly 5,000 vintage “daily simple-interest” mortgages, according to presale reports by DBRS and Fitch Ratings. If the deal is positively accepted by investors, there’s the potential for more issuance as Bayview is servicing a somewhat large portfolio of the loans. The planned $241.2 million Bayview Opportunity Master Fund Trust 2016-SPL1 is stocked with mortgages originated about 10 years ago. The loans – most of which have fixed interest rates – have a weighted-average interest rate of 8.926 percent. The so-called DSI mortgages differ from a standard mortgage in the calculation of interest owed by the borrower. With a standard mortgage, interest owed is calculated...

New derivative rules requiring daily posting of two-way variation margin on affected derivatives could create uncertainties for structured finance transactions, warned Fitch Ratings in a recent analysis. U.S. banking regulators and the Commodity Futures Trading Commission have adopted the uncleared swap margin rules for covered swap entities. Specifically, registered swap dealers and all end users of derivative contracts must comply with margin collection, posting, segregation, and documentation requirements by March 1, 2017. New swaps executed after the 2017 effective date would...

Freddie Mac is set to issue a $459.92 million Whole Loan Securities transaction, according to a presale report from Moody’s Investors Service. The firm didn’t rate the senior tranche of the deal but did place a Baa1 rating on a mezzanine tranche of Freddie Mac Whole Loan Securities 2016-SC02. The government-sponsored enterprise priced the latest WLS transaction this week, with the deal expected to close next week. “We are pleased with the pricing levels and depth of investor participation in the WLS program,” said Kevin Palmer, senior vice president of credit risk transfer at Freddie. “We look forward to continued issuance in 2017.” Freddie has issued...

An affiliate of Verizon Communications will issue a $1.40 billion ABS backed by payment plans for cell phones, according to presale reports. It’s the second transaction of its kind from Verizon, with industry analysts projecting that issuance could increase due to widespread financing for cell phones and investor demands. Verizon Owner Trust 2016-2 received preliminary AAA ratings from Fitch Ratings and S&P Global Ratings. It’s larger than the $1.17 billion ABS Verizon issued in July and the senior tranche on the pending issuance includes slightly less credit enhancement, indicating increased comfort among rating services. The July issuance included...

Freddie Mac and Shellpoint Partners are preparing to price new securities in the aftermath of the presidential election, and Select Portfolio Servicing priced $600.0 million in an MBS backed by servicer advance receivables this week. Freddie is about to issue a Whole Loan Securities transaction, which would mark the second such issuance from the government-sponsored enterprise this year and the fourth overall, dating back to the first WLS transaction that closed in July 2015. The balance of the planned Whole Loan Securities Trust, Series 2016-SC02, is...

As the new breed of subprime lenders continues to increase originations, these firms are now actively pondering whether they should approach the rating agencies about getting their firms rated. Dan Perl, founder and CEO of nonprime/non-QM lender Citadel Servicing, Irvine, CA, said his firm has approached Fitch Ratings and hopes to get rated as both a servicer and originator. Perl believes some of his competitors are going down the same path as well. He told...

Allegations in an impending government MBS fraud case against Moody’s Corp. will likely mirror allegations of fraud and misrepresentation in a 2013 civil suit against Standard & Poor’s, according to industry observers. Moody’s disclosed the expected case in a recent filing of third-quarter earnings results with the Securities and Exchange Commission. According to the credit rating agency, lawsuits are likely pending from both the Department of Justice and state attorneys general over ratings of MBS in the years leading up to the financial crisis. In a letter dated Sept. 29, 2016, the DOJ informed...

Bayview Financial is set to issue the first re-securitization backed by subordinate tranches from risk-sharing deals issued by Fannie Mae and Freddie Mac. Fitch Ratings placed an A-minus rating on the planned $159.60 million Bayview Opportunity Master Fund IVb Trust 2016-CRT1. The transaction is backed by 12 securities from Fannie’s Connecticut Avenue Securities transactions and Freddie’s Structured Agency Credit Risk transactions issued in 2014 and 2015. The securities in the re-securitization are CAS M2 and STACR M3 tranches. All but one of the underlying securities rely...