Commercial banks and thrifts reported a further decline in their holdings of non-mortgage ABS during the first quarter, according to a new Inside MBS & ABS analysis of call-report data. As of the end of March, banks held a combined $131.96 billion of ABS in their portfolio, including assets intended to be held to maturity as well as those available for sale. That represented a 2.3 percent drop from the end of 2015, and a hefty 15.9 percent decline from a year ago. It was...[Includes two data tables]

Issuers of non-agency MBS willing to issue publicly-registered securities can look forward to thorough reviews by the Securities and Exchange Commission. Redwood Trust filed an updated shelf registration with the SEC this month and the SEC released some of the feedback that went into crafting the issuer’s new Form SF-3. Issuance of publicly-registered non-agency MBS has been minimal since the financial crisis, with issuers seeing pricing in the private 144A market as adequate. Public transactions are subject to more extensive disclosure standards than private deals. An initial letter from the SEC dated Oct. 29, 2014, noted...

The Consumer Financial Protection Bureau’s proposed rule that aims to effectively end the use of arbitration clauses in U.S financial product contracts will create new risks for ABS tied to consumer loans as well as related financial services companies, according to Moody’s Investors Service. “The fact that the proposed rule would not affect contracts outstanding before it is finalized would lessen its effects initially, as well as over the longer term for contracts on products that typically have long lives, such as credit cards,” analysts from Moody’s said. “Nevertheless, if adopted, the rule would expand legal risks for banks and other financial companies, and could adversely affect some securitizations.” That being said, “Some of the negative effects, however, would be offset...

Single-family rental properties are still enjoying a downward trend in vacancies as well as low delinquencies, according to a new report from Morningstar Credit Ratings. However, with more leases set to expire in coming months, vacancy rates may begin to increase. “Vacancy rates have trended lower for the sixth consecutive month,” Morningstar analysts said in their new report. “However, we may see a reversal in this trend in the coming months, given ...

Federal banking regulators have proposed a “net stable funding ratio” for depositories with more than $250 billion in assets that aims to ensure that large banks’ lending and investing activities are sufficiently supported by sources of stable funding over a one-year horizon. The proposed NSFR would require banks to calculate a weighted measure of the stability of their equity and liabilities over a one-year time horizon, known as the available stable funding, or ASF, and calculate their level of required stable funding (RSF) over the same one-year period. Beginning in 2018, the proposed rule would require...

Thanks to a resurgence of deals backed by vehicle-related financing, non-mortgage ABS production rebounded strongly in the first three months of 2016, according to a new Inside MBS & ABS analysis and ranking. But ABS issuance levels came up well short of the volume generated during the first three months of last year, and a few key segments continued to limp along. A total of $41.42 billion of non-mortgage ABS were issued...[Includes two data tables]

Overall net losses in subprime auto ABS are on the rise due to an increasing number of deals from smaller lenders that cater to borrowers with weak credit. Amid this trend, however, subprime auto ABS performance varies by lender, according to a new report from Moody’s Investors Service. Moody’s analysts said competition among auto lenders has tightened as new, mostly smaller, lenders – driven by low losses on post-crisis auto loans and low interest rates – enter the market and compete for borrowers. The crowded market has driven...

Falling mortgage rates helped spur a modest increase in refinance activity during the first quarter of 2016, but not enough to offset a slowdown in other parts of the securitization market, according to a new Inside MBS & ABS analysis and ranking. A total of $318.34 billion of residential MBS and non-mortgage ABS were issued during the first three months of the year, a 3.6 percent decline from the fourth quarter of 2015. It was the lowest amount of new issuance since the second quarter of 2014 and put the market 8.1 percent behind the level reached in the first quarter of last year. Non-mortgage ABS issuance was...[Includes three data tables]

Standard & Poor’s kept its position as the top provider of ratings for newly issued non-mortgage ABS last year, although the volume of deals the company rated fell 10.1 percent from 2014, according to a new Inside MBS & ABS analysis. S&P rated ABS bonds totaling $106.86 billion in new issuance in 2015, or 61.5 percent of deals for which rating information was available. That was down slightly from its league-leading 64.1 percent share of the rated 2014 ABS market. The company’s strong suits were credit card ABS and deals backed by vehicle loans and leases. Fitch Ratings finished...[Includes two data tables]

When the Securities and Exchange Commission issued a final rule in August 2014 setting disclosure requirements for publicly-registered MBS and ABS, one of the outstanding provisions was whether to apply the loan-level disclosure requirements to private-placement 144A deals. More than 18 months later, it’s unclear whether the SEC will increase disclosure requirements for private placements, though industry participants expect that some action is in the works. Charles Sweet, a practice development leader at the law firm of Morgan Lewis, noted that the SEC asked the Structured Finance Industry Group to submit refreshed comments regarding the outstanding provisions included in the so-called Regulation AB2 final rule. “They are...