Alternative data, machine learning, blockchain and document digitalization in securitization deals have the potential to improve credit quality, but they are untested and come with risks, says Moody’s.
Two prominent GSE multifamily lenders cut production in the fourth quarter as they adjusted to the new investment limits set for Fannie and Freddie. The new caps are unlikely to constrain GSE business in 2020.
As the industry moves from LIBOR to SOFR, the ARRC is seeking input on whether the spread-adjustment methodology for cash products should be consistent with what’s adopted internationally for derivatives.
While Fannie, Freddie and Ginnie continued to dominate the business of securitizing income-property mortgages, issuance of non-agency CMBS gained ground in 2019 thanks to significant increases in office, industrial and multifamily transactions.
The next few years might be even more challenging for mall loans backing commercial MBS, with refinancing seen as difficult and delinquencies ticking up, according to rating agencies.
Single-family rental securitization issuance in 2019 fell by 35%. Invitation Homes, the largest issuer of such deals in 2018, avoided the market entirely, focusing instead on more attractive types of financing.
Private-label commercial MBS issuance likely will climb to $120 billion in 2020 thanks to low interest rates and benign commercial real estate conditions. But there's a never-ending storm cloud: retail.
Moody’s Investors Service in a recent report explores the securitization of loans backed by data centers, noting the nascent asset class is susceptible to cash flow volatility.
Arbor Realty Trust plans to issue non-agency commercial MBS stocked with multifamily loans that are eligible for sale to the GSEs, expecting better execution for the loans.
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