Moody’s Investors Service issued a “special comment” this week to warn that the new non-agency jumbo MBS issued by JPMorgan Chase would not have received a AAA rating from Moody’s, had the firm been asked to rate the deal. The rating service raised concerns about representations and warranties and a lack of risk retention on the deal.
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The securitization of commercial real estate property increased by 28.7 percent from 2011 to 2012 as the non-agency commercial MBS market posted its best year since the financial market collapse and agency securitization of multifamily mortgages hit a record high. (Includes one data chart)
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New loan-level performance data released this month by Freddie Mac indicate that the impact of risk layering may be more significant than observers previously thought, according to analysts at Amherst Securities Group.
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The U.S. Supreme Court has denied a petition to review a federal appeals court decision to reinstate a securities class action lawsuit filed by MBS investors against Goldman Sachs. In denying the petition, the SCOTUS let stand a ruling by the U.S. Court of Appeals for the Second Circuit to overturn a lower court’s decision to dismiss the plaintiff’s suit for lack of standing and for failure to show injury.
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Investors in ABS backed by private student loans strongly oppose proposals in Congress to change bankruptcy laws in an effort to help such borrowers. In a letter this week to members of Congress, the American Securitization Forum said the proposals would increase the cost of private student loans and harm the investments of those holding private student loan ABS.
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It hasn’t been an easy time for due diligence firms that make their living off the mortgage business, at least not this year. Firms like Allonhill LLC, which bulked up on staff to handle the rush of work on investor buyback demands, have been cutting back in recent months as those contracts run their natural course.
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The key to advancing tomorrow’s big picture housing finance reform should begin today through a series of smaller steps starting with targeted, nearly ready-to-go reductions to Fannie Mae’s and Freddie Mac’s credit risk, according to a proposal by Moody’s Analytics.
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Improving market conditions and strengthening appetites on Wall Street have encouraged a pair of MBS-buying real estate investment trusts to hit up the equity markets, including an initial public offering from relative newcomer First Oaks, which touts a hybrid investment model.
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