The SFIG Vegas conference this week set another attendance record for the annual event, demonstrating strong interest in the structured finance market. While investors are comfortable with most asset classes of MBS and ABS, significant concerns remain about non-agency MBS. More than 6,700 people registered for the conference, according to Jade Friedensohn, director of programming at Information Management Network, which produced the conference along with the Structured Finance Industry Group. Potential investors in non-agency MBS continued...

The two major players in the jumbo mortgage-backed security market have seen strong demand for their issuance in recent months. But much broader factors are likely to limit issuance, including ongoing uncertainty regarding reform of the government-sponsored enterprises. Marc Simpson, an executive director at JPMorgan Securities, said 50 investors bought into the bank’s latest jumbo MBS, a $1.03 billion issuance. He said it was a “highwater mark,” as 20 to 30 investors typically ...

A planned nonprime mortgage-backed security from an affiliate of Angel Oak Companies received AAA ratings from DBRS and Fitch Ratings. The $146.47 million deal will include credit enhancement of 46.65 percent on the senior tranche. Fitch said the AAA rating for the deal reflects the satisfactory operational review of the contributing lenders conducted by the rating service, 100.0 percent loan-level due diligence review with no material findings, a “Tier 2” representation-and-warranty framework ...

Documents have been drawn up to define a deal agent’s responsibilities, a number of firms are willing to be deal agents for new non-agency mortgage-backed securities and some investors insist that the investor-friendly role is necessary. But a deal agent has yet to be included in an MBS. Dmitri Rabin, a vice president of Loomis, Sayles & Company, an investing firm that has pushed the deal-agent concept, conceded that the function doesn’t provide much value in the current environment ...

The two issuers that recently entered the non-agency mortgage-backed security market included loans originated by lenders that haven’t been significant contributors to nonprime MBS or jumbo MBS. The $145.02 million nonprime MBS from Invictus Capital Partners included mortgages from 21 lenders, led by Calculated Risk Analytics with a 26.1 percent share of the dollar volume of loans in the deal. Calculated Risk Analytics does business as Excelerate Capital, a wholesale lender ...

The once dormant market for MBS backed by newly originated nonprime loans is beginning to pick up steam, with deals unveiled by affiliates of Angel Oak Home Loans and Galton Funding. But that’s not all. According to industry officials who work in the sector, Citadel Servicing Corp., Irvine, CA, is planning a rated security for some time in May and there’s even talk that bond investing giant PIMCO might get in on the action. Origination and investment banking sources, speaking under the condition of anonymity, told...

Most real estate investment trusts that invest in MBS and other mortgage-related assets reported declines in their holdings of agency and non-agency securities during the fourth quarter, according to a new Inside MBS & ABS ranking and analysis. The top publicly traded REITs had a combined residential MBS portfolio valued at $228.28 billion as of the end of 2016. That was down 3.5 percent from the previous quarter and off 6.5 percent from the end of 2015. The figures are preliminary because several smaller REITs have not yet reported fourth-quarter results. Agency MBS continued...[Includes one data table]

The U.S. Treasury doesn’t get to invest in the booming stock market, but its stake in two guarantors of mortgage-backed securities is making a killing. Fannie Mae and Freddie Mac posted $9.9 billion in combined profits for the fourth quarter of 2016, and $20.2 billion for the full year. It was up 16.1 percent from 2015 and the fourth best year ever for the two government-sponsored enterprises. Their all-time high was...

The Office of the Comptroller of the Currency’s denial of favorable capital treatment to a non-agency MBS issued by JPMorgan Chase last year could hinder efforts aimed at convincing banks to return to the non-agency MBS market, according to industry analysts. JPMorgan Chase issued two unique non-agency MBS last year with a total unpaid principal balance of $4.53 billion. The so-called portfolio risk-transfer deals accounted for a whopping 48.6 percent of the prime non-agency MBS issued in 2016. Chase packaged...

Rating services appear to be taking differing approaches to rating nonprime MBS backed by new originations. The first nonprime MBS from an affiliate of Invictus Capital Partners received preliminary AAA ratings from Kroll Bond Rating Agency, Morningstar Credit Ratings and S&P Global Ratings. Those three firms did not rate...