Losses on non-agency MBS, a rarity for deals issued since 2010, look likely as forbearance plans for distressed borrowers end. Investors in the senior tranches appear to be safe for now.
The rating service its stepping away from rating new commercial MBS backed by single-borrower hotel loans due to uncertainty prompted by the coronavirus. Only one such deal has been issued since April.
The HOPE Act seeks to create a liquidity facility for commercial MBS borrowers who weren’t eligible for PPP or MSLP. The bill suggests financial institutions originate Treasury-guaranteed preferred equity instruments to qualified borrowers.
There’s a lack of standardization among non-agency MBS servicers regarding reporting of loans in forbearance. Investors are having difficulties understanding what exactly servicers are doing.
The company believes delivering loans to agency MBS helps it be a “high velocity, capital light and cash generating” operation. This year, the firm has held mortgages on its balance sheet for as few as eight days.
Nomura analyst Matthew Howlett says PennyMac's strong performance is a sign of boom times for mortgage lenders. He expects four or five IPOs of nonbank originators in the next nine to 12 months.
Nonbank Ginnie Mae issuers increased their borrowings under the PTAP program in May but not significantly. Next up: FHA’s forbearance policy on loans in progress.
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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