Neither of the credit-rating industry’s perennial market leaders – Standard & Poor’s and Moody’s Investors Service – managed to claim a top spot during the first quarter of 2015, according to a new Inside MBS & ABS ranking. Fitch Ratings ranked as the top player in rating the bigger non-mortgage ABS market. The company rated 43 ABS issued during the first quarter that represented 64.2 percent of total issuance by dollar amount. The company rated all eight credit-card ABS issued in early 2015, along with most of the student-loan deals. Fitch raised...[Includes two data tables]

Investor appetite for insurance risk continues to outstrip demand, prompting an increase in catastrophe bonds among other insurance-linked securities, according to industry analysts. Late last week, Fitch Ratings assigned a BB rating to a $200 million catastrophe bond that will provide re-insurance protection to Hannover Ruck for exposure to earthquakes in California. The deal will push U.S.-related issuance of catastrophe bonds to $3.86 billion in 2015, according to Artemis, a firm that tracks issuance of the bonds. A record volume of catastrophe bonds was issued...

Although the big three rating agencies have had a strong hold on rating commercial MBS for most institutional investors, the tides may be changing as bond buyers begin to relax their guidelines. Some of the largest bond buyers have been vocalizing frustration that the big three ratings firms, Moody’s Investors Service, Standard & Poors and Fitch Ratings, are being hired less, resulting in fewer bond offerings to choose from, according to a recent Bloomberg article. That’s good news for smaller ratings agencies like Kroll Bond and Morningstar. “We have proven...

A new feature Redwood Trust has included in its two most recent jumbo mortgage-backed securities has prompted support from AAA investors along with mixed reactions from rating services. The $356.45 million Sequoia Mortgage Trust 2015-2 issued in April and the $343.21 million Sequoia Mortgage Trust 2015-3 that was issued this week included a unique stop-advance feature. Servicers of the loans won’t be allowed to provide advances of principal and interest on loans that are 120+ days delinquent. The jumbo MBS were rated by Kroll Bond Rating Agency and Moody’s Investors Service ...

The frequently-asked-questions guidance to using the FHA’s consolidated Single Family Policy Handbook is good to have though it shows just how complicated the FHA’s mortgage origination process is, according to lenders. In fact, the updated FHA handbook could still be confusing to borrowers simply because a lot more information is concentrated in one source, lenders said. According to the FHA, the more than 290 FAQs will enable lenders to make operation adjustments before the handbook goes into effect on Sept. 14, 2015. The FAQs are for information purposes only and do not apply to current FHA policies. They do not establish or modify policy contained in the handbook. The FAQs reiterate information in the handbook under headings such as Credit Underwriting, Closing and Insuring, FHA System Support and Consumer Information. Industry observers noted that the FAQs did not ...

Redwood Trust is preparing to issue its second consecutive jumbo MBS that includes a new stop-advance feature. While officials at the real estate investment trust said the feature has been well received by AAA investors, Fitch Ratings warned late last week that it introduces some risks to deals. The stop-advance feature being used by Redwood prevents servicers from providing advances of principal and interest on loans that are 120+ days delinquent. The feature was first used on the $356.45 million deal Redwood issued in April and is set to be included in a pending $343.21 million jumbo MBS from the issuer. Fitch didn’t rate...

Beginning June 15, rating services involved in MBS and ABS will be subject to increased disclosure standards from the Securities and Exchange Commission. Rating services expect to make a number of changes to comply with the final rule that was issued last August, with some concerns about the usefulness of the increased disclosures. The SEC is requiring nationally recognized statistical rating organizations to disclose rating histories, make changes to rating methodologies and disclose details on findings by third-party due diligence providers, among other issues. Moody’s Investors Service noted...

DBRS and Standard & Poor’s separately issued revised criteria for rating non-agency mortgage-backed securities in recent weeks. DBRS will give slightly more credit to jumbo MBS due to strong performance in recent years, while S&P adjusted modeling relating to home price trends. DBRS noted that from 2010 through the end of April, $32.1 billion in jumbo MBS had been issued, with only one deal taking any losses to date, a 0.04 percent loss. “Positive loan attributes ...

A final rule issued by the Securities and Exchange Commission regarding third-party due diligence providers and rating services takes effect on June 15. The rule is set to prompt a number of changes in the non-agency mortgage-backed security market, largely targeting transparency. For MBS that receive ratings, public disclosure of results from third-party due diligence reviews will be required before a deal is priced. The disclosure requirement even applies to deals issued as private placements, which is the current practice for jumbo MBS ...

Ocwen Financial’s servicing of certain mortgages in non-agency mortgage-backed securities remains at risk due to a downgrade watch issued last week by Standard & Poor’s. Officials at Ocwen said they were surprised by the announcement while noting that Moody’s Investors Service upgraded various ratings relating to the nonbank. S&P said it placed servicer ratings for Ocwen on watch for downgrade last week due to regulatory scrutiny of the company, results from ...