The two most significant forecasting models for MBS prepayments are struggling under the weight of the COVID-19 pandemic and the recent bank failures, according to a new TCW report.
CRT transactions from Western Alliance Bank and Pacific Western Bank face scrutiny amid bank failures; impairments on unsecured consumer loans in ABS decline; Credit Suisse and what’s to come.
The FHFA will significantly reduce a controversial fee for comingled securities in UMBS; no consistent trend in delinquencies and losses across MBS and ABS in December; term SOFR not an option as GSEs leave LIBOR behind.
In late December, Ginnie seized HECM servicing from Reverse Mortgage Funding, which had recently filed for bankruptcy. Other HECM servicers are also facing liquidity pressure, according to industry analysts.
KBRA said that third-quarter MBS issuance volume didn’t meet its expectations and will drop rapidly in the coming year. Meanwhile, both DBRS and Moody’s noted that performance is stabilizing.
The CMBS delinquency rate will be steady through the end of the year, Fitch Ratings said, before deteriorating in 2023. Meanwhile, KBRA found that most of the single-borrower CMBS loans in default developed performance problems during the height of pandemic lockdowns.
Servicers will now have a shorter wait time to deliver reperforming loans back into Ginnie MBS, and the loans will no longer have to go into special RG pools. The changes are aimed at increasing liquidity for Ginnie issuers. (Includes data chart.)
The Swiss bank is transferring most of its securitized products unit to a group of investors — affiliates of Apollo Global Management and PIMCO. The deal is expected to close in the first half of 2023.
The federal entities appear to have accommodated many of the concerns of small and mid-sized seller/servicers, reducing some requirements and eliminating others.
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