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Inside MBS & ABS

July 15, 2011

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Agency MBS Production Faded in 2Q11, But REMIC Issuance Edged Higher

Most of the top mortgage originators of agency-eligible home loans posted significant declines in MBS issuance during the second quarter, but a handful of firms bucked the current, according to a new ranking and analysis based on the Inside Mortgage Finance MBS Database. Overall agency MBS production declined 33.8 percent from the first quarter to the second, hitting its lowest three-month volume since the end of 2008. Through the midway point in 2011, single-family mortgage securitization by Fannie Mae, Freddie Mac and Ginnie Mae was off ... [includes two data charts] Read More

MBS Analysts See Little Gain in Proposal To Turbo Charge GSE Refinance Program

Proponents of an expanded program to refinance underwater Fannie Mae and Freddie Mac mortgages may find a sympathetic ear at the White House, which has talked recently of re-focusing on the struggling housing market, but MBS analysts don’t think the proposal would have a huge impact. Sen. Barbara Boxer, D-CA, early this year introduced the Helping Responsible Homeowners Act, which would require the government-sponsored enterprises to go beyond the limits of the existing Home Affordable Refinance Program, which was implemented administratively. Loans refinanced under the Boxer program could not be ... Read More

Merits of Dodd-Frank for Investor Protection Debated, But Lack of SEC Funds Could Underscore Everything

Witnesses testifying before the Senate Banking, Housing and Urban Affairs Committee this week had diverse opinions about the effectiveness of the Dodd-Frank Act to protect investors, but one thing was clear: without the money, the Securities and Exchange Commission will never be able to get anything done. Republicans and Democrats in the committee were not-so-surprisingly at odds over the now one-year-old law. Sen. Tim Johnson, D-SD, urged members of the committee and the witnesses present to “give these provisions a chance to work.” Meanwhile, Sen. Richard Shelby, R-AL, argued that Dodd-Frank “has not ... Read More

GOP Set of Fannie, Freddie Wind-Down Bills Clears Subcommittee With Amendments

House Republicans this week pushed through six more bills designed to wind down Fannie Mae and Freddie Mac but not before Democrats debated and managed to pass a couple of speed-bump amendments. The focus in the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises thus far has been on an assortment of narrow measures that would continue to squeeze Fannie and Freddie’s activities and increase GSE oversight while in conservatorship. During a markup this week, Democrats and some disaffected GOP subcommittee members spent a substantial amount of ... Read More

Fitch Ratings Updates Criteria for Rating Small Balance Pools, Cash Flow Analysis

Fitch Ratings has updated its criteria for analyzing non-agency MBS for potential rating changes as well as criteria for determining whether cash flows from underlying residential mortgages are adequate to make payments on the rated non-agency MBS. Under the latest change to its surveillance process for non-agency MBS, Fitch said it will consider loan concentration risk as part of its surveillance analysis of pools that have a small number of mortgages remaining and lack certain structural features, such as sequential payment distribution or a subordination floor. Fitch’s latest criteria change will address ... Read More

Court Narrows Scope of Investor Lawsuit Over Countrywide MBS Disclosures

Investors who lost money in Countrywide Financial Corp. MBS after the 2007 market collapse suffered a possible blow of hundreds of billions of dollars in a Los Angeles court case last week. After initially seeking $351 billion in a lawsuit, the case was narrowed to $2.6 billion in bonds. U.S. District Judge Marianna Pfaelzer in the Central District of California had already narrowed the case once, saying investors can only sue for their own losses, not those related to all offerings that fell under the same guidelines. This ruling reduced ... Read More

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