Golden State Tobacco Securitization Corp. is preparing to issue a $618.8 million ABS backed by revenues from a tobacco settlement reached in 1998. Several states have issued such deals, though the sector received a blow last year when Fitch withdrew its ratings and criteria for tobacco ABS. Under the settlement with 46 states and Washington, DC, the major cigarette manufacturing companies must make payments to each state annually, in perpetuity. The payments are based on cigarette sales, among other factors. At the time of the settlement, the revenues for states were estimated to be $306.0 billion for the first 25 years of the agreement. States can issue...

Although agency mortgage lenders are having a challenging start this year, nonprime lenders are seeing volumes increase more than anticipated and are shaping up plans to bring new MBS to market. Angel Oak Mortgage Solutions, Atlanta, and its retail affiliate Angel Oak Home Loans ended the first quarter with just over $220.9 million of mostly non-agency mortgage production. An official at the company described the first quarter as “shaping up well.” The official told...

Fitch Ratings updated its rating criteria last week for MBS backed by seasoned mortgages, including re-performing loans and nonperforming loans. The revisions to the criteria removed two standards that Fitch previously applied when analyzing seasoned mortgages. For re-performing mortgages originated before 2009, Fitch will no longer consider the original loan documentation. All mortgages will be treated as though they were originated with full documentation, even if the mortgages were originated with less than full documentation. “In recent years, the distinction in borrower behavior for loans with different original documentation levels has disappeared...

FHA-insured jumbo lending fell slightly in the fourth quarter of 2016 although year-over-year results were a lot better. Production of conforming-jumbo purchase and refinance loans insured by the FHA slipped 0.9 percent in the fourth quarter, a slight bump on the way to an annual jumbo origination total of $26.9billion. Year-over-year, FHA jumbo production was up 5.6 percent from 2015. Conforming-jumbo loans represented 9.8 percent of FHA loans securitized last year, according to data compiled by affiliated newsletter Inside Mortgage Finance. Purchase mortgages comprised 64.9 percent of jumbo loans insured by FHA in 2016 and 98.7 percent were fixed-rate loans. Nonbanks comprised the top five FHA jumbo lenders. Wells Fargo, which closed the year with $423.8 million in FHA jumbo originations, was in sixth place. Quicken Loans led the field with $802.5 million of ... [ Charts ]

Fitch Ratings was the most active provider of credit ratings for non-mortgage ABS and non-agency MBS in 2016, a new Inside MBS & ABS analysis reveals. Fitch edged out Standard & Poor’s in a busy ABS market, garnering a 54.8 percent share of rated transactions last year. The company boosted its ABS ratings business by 4.6 percent compared to 2015, based on dollar volume, nudging its market share up 1.9 percentage points. Fitch’s deepest penetration was...[Includes two data tables]

Housing finance reform, especially if it weakens mortgage underwriting standards, could have a negative impact on private-label MBS as well as the government-sponsored enterprises’ credit risk-transfer transactions, according to a newly published report from Moody’s Investor Services. Analysts said that various reform proposals could reduce the influence that Fannie Mae and Freddie Mac have in the market and likely increase credit risk in new MBS in the short-term. Combined with a rising interest rate environment, such reform could have a credit-negative effect. Loan origination processes and the kinds of loans produced could become...

Last year was a decent enough year for the student loan sector, and so far this year, the space is looking dramatically more robust, according to analysts at the DBRS ratings service. New issuance so far in 2017 is more than twice that from the same period last year, with volume exceeding $4.5 billion, according to Jon Riber, a senior U.S. ABS ratings analyst at DBRS. “There are...

A proposal from a former high-ranking official at S&P Global Ratings to reduce incentives for rating shopping has been met with skepticism and resistance from officials at other rating services. Howard Esaki, the former global head of securitization research at S&P Global Ratings, and Lawrence White, a professor of economics, NYU Stern School of Business, recently published a proposal to reform the process for how rating services are selected to grade MBS and ABS. They said...

Affiliates of New Residential Investment and CarVal Investors packaged re-performing mortgages with a total unpaid principal balance of more than $1 billion for two separate MBS that will be issued this month. There’s plenty of supply of seasoned mortgages in the secondary market, but higher interest rates could weaken demand, according to industry analysts. An affiliate of CarVal Investors priced a $395.3 million non-agency MBS late last week with more variety in collateral than the typical MBS backed by seasoned mortgages. In addition to re-performing mortgages, Mill City Mortgage Loan Trust 2017-1 included some home-equity lines of credit and newly originated mortgages. Vintage HELOCs accounted...

The three major credit bureaus plan to exclude two critical pieces of negative information from their reports, which may make it easier for some borrowers to qualify for a mortgage. Many tax liens and civil judgments, which can weigh down a credit score, will be removed. As part of a multi-year plan to alleviate incorrect information, on July 1, Equifax, Experian and Transunion will apply new public record standards when it comes to collecting and the timely updating of civil judgments and tax liens, the Consumer Data Industry Association said this week. The new standard will apply...