Jefferies Funding is underwriting a securitization of a revolving warehouse facility for agency mortgages originated by two nonbanks. The $225.0 million Station Place Securitization Trust 2016-1 received provisional Aaa ratings this week from Moody’s Investors Service. The rating service said the transaction is based on a “back-to-back” repo structure, with the three classes of notes scheduled to be paid off one year after issuance. The proceeds from the sale of the notes will be used by the issuer to purchase eligible mortgages and participation certificates from the repo seller. The revolving warehouse facility will be sponsored...

For the first time since October 2008, Moody’s Investors Service upgraded two top private mortgage insurance companies to investment grade due to strong performance of new insurance written, cost savings and fewer losses. However, risk factors, including proposed capital regulations from the National Association of Insurance Commissioners, could adversely impact the ratings. Mortgage Guaranty Insurance Corp. and Radian Guaranty now have Baa3 ratings from Moody’s, although other rating servicers appear disinclined to follow. Both MIs continue to be rated below investment grade by Standard & Poor’s. The improved ratings come...

The credit quality of U.S. conduit/fusion commercial MBS kept degrading during the fourth quarter of 2015, while conduit loan leverage is rising and is expected to continue to do so, according to a new report from Moody’s Investors Service. Conduit loan leverage as measured by the Moody’s Loan to Value (MLTV) ratio ticked upward from 118.2 percent in the third quarter last year to 118.9 percent in the fourth quarter. This is the third time in which that metric has topped the pre-crisis peak level of 117.5 percent, the ratings service said. Further, the conduit loan MLTV rose...

The first security backed by proceeds from properties that have “rent-to-own” agreements has caused some divergence among rating services. Home Partners of America is preparing to issue a $508.88 million deal, which received preliminary AAA ratings from two firms. Moody’s Investors Service and Morningstar Credit Ratings issued presale reports on Home Partners of America 2016-1 last week. Kroll Bond Rating Agency followed with a warning that rent-to-own deals present more risks than single-family rental securitizations. The collateral for the security is...

Interest in the single-family rental market has increased since being introduced as a viable asset classes several years ago, but some say further growth may depend on the sector’s ability to significantly improve operating efficiencies. There have been 27 single-family rental securitizations to date. In 2015, issuance of single-family rental deals was $6.72 billion, up from $6.61 billion a year earlier, according to Morningstar Credit Ratings. Although capital expenses were higher than ...

The performance risks posed by a new breed of alternative-documentation mortgages are likely much lower than the mayhem caused by reduced-documentation mortgages originated before the financial crisis, according to Moody’s Investors Service. While most lenders verify the borrower’s income and assets used to qualify for mortgages, some non-agency lenders are willing to originate loans with less than full documentation. Lenders allowing for alt-doc underwriting typically ...

Issuers of Ginnie Mae mortgage-backed securities pushed a record $435.80 billion of government-insured loans through the program during 2015, according to a new Inside FHA/VA Lending analysis and ranking. Last year’s total Ginnie MBS issuance topped the previous record of $429.50 billion issued during 2009. The $435.80 billion total for 2015 includes securitization of FHA home-equity conversion mortgages and other single-family loans guaranteed by FHA, the VA, and the Department of Agriculture rural housing program from Ginnie pool-level MBS data that are not truncated. Production in 2015 hit its high-water mark in the third quarter with $128.23 billion in issuance, and then fell 18.0 percent in the final three months of the year. Purchase mortgages continued to account for most Ginnie business in 2015, 58.0 percent of the agency’s forward-mortgage securitizations. But a huge factor in the ... [ Charts ]

The first rated securitization backed by nonperforming Home Equity Conversion Mortgage loans contains strong, credit-positive features that outweigh the credit risk associated with nonperforming loans, according to a Moody’s Investors Service analysis. The effect of some of these positive features on the performance of Nationstar HECM Loan Trust 2015-2, however, depends on whether Nationstar Mortgage remains as servicer for the transaction, said the rating agency. Nationstar has a servicer rating of B2/Stable from Moody’s and is also the transaction’s sponsor. Nationstar issued NHLT 2015-2 in November 2015 and by the end of December, the first remittance report showed strong initial performance. Credit enhancement to the Aaa (sf)-rated notes increased by 1.69 percent in the first month of operations, Moody’s noted. “As long as Nationstar continues to be the ...

Four nonprime MBS backed by newly-originated residential loans came to market during the last four months of 2015, but none of deals were rated, a situation that could change in the new year. In a recent interview with Inside MBS & ABS, John Hsu, head of capital markets for Angel Oak Capital, said his company hopes to get a rated deal done in 2016, believing such a milestone would help move the nascent market forward. “We need...

Exams by the Securities and Exchange Commission in 2015 uncovered a number of problems at rating services large and small, according to a report released by the SEC at the end of December. However, the firms weren’t identified by name because the exams aren’t public. The report is a laundry list of findings involving the 10 nationally recognized statistical rating organizations, six of which are involved in the MBS and ABS markets. The findings came from exams that focused on activities in 2014. Offending rating services generally were referred to solely based on their size, with Fitch Ratings, Moody’s Investors Service and Standard & Poor’s referred to as “larger” rating services and the other companies referred to as “smaller” rating services. The SEC said...