The Structured Finance Association, which is developing a compliance tool to facilitate uniformity in the non-agency MBS market on QM standards, has run into a vexing issue regarding the definition of a QM.
Regulators are pushing higher capital requirements on banks and looking favorably at credit-risk transfer transactions, helping to increase CRT issuance. Investor demand for bank CRT is also outstripping supply.
New prohibitions against conflicts of interest in the MBS and ABS market will take effect in June 2025. But SEC officials are urging industry participants to raise compliance concerns, if any, as soon as possible.
Fed stays course on MBS sales; SFA close to revising data tape for prime non-agency MBS; MBS on watch for rating upgrades by Fitch; subprime auto ABS impairments rise; commercial MBS delinquencies decline; Fannie sees tighter spreads for latest CRT; Morningstar not ready to give positive commercial MBS credit for “mass timber” construction.
Nonbanks are fueling securitization of home-equity lines-of-credit, closed-end second liens and home equity investments. Issuance jumped in 2023 as refi business dried up. (Includes two data tables.)
Proposed capital requirements for large banks would create “perverse incentives” for banks regarding securitization activity, according to a new analysis by the Securities Industry and Financial Markets Association.
CalCon Mutual Mortgage plans to issue a $576.2 million non-agency MBS with mortgages eligible for sale to the GSEs. It will be the first non-agency MBS from the issuer.
The SEC has finalized a rule prohibiting certain conflicts of interest in the securitization market. Industry participants are largely happy with changes in the final version of the rule.
The new issuance from Balbec Capital received a preliminary AAA rating with somewhat higher credit enhancement than a typical expanded-credit MBS. It’s the second scratch-and-dent MBS from Balbec this year.
The creation of a U.S. sovereign wealth fund could grease the skids for an end to the conservatorships of Fannie Mae and Freddie Mac.
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