New production of single-family agency MBS in January 2014 fell to its lowest monthly volume in five years, according to a new market analysis and ranking by Inside MBS & ABS. Fannie Mae, Freddie Mac and Ginnie Mae generated a total of $67.82 billion in single-family MBS last month, a 10.4 percent drop from December 2013. It was the weakest monthly issuance since January 2009, when $64.39 billion of new agency MBS were produced as world financial markets tried to recover from collapse. Market conditions – if you don’t consider the weather outside – were...[Includes one data chart]
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Credit Suisse late last week broke a two-month lull in jumbo MBS issuance, and JPMorgan Chase appears to be planning a new security. However, the jumbo MBS market is far from flourishing as other issuers continue to avoid the sector. Credit Suisse issued a $287.42 million jumbo MBS last week. CSMC Trust 2014-IVR1 received a AAA rating from DBRS with credit enhancement of 6.85 percent on the top-rated tranche. The deal had...
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The new judge presiding over Bank of America’s $8.5 billion settlement with MBS investors this week countermanded, for the moment, last week’s approval of the deal by her predecessor, giving a major opponent of the agreement another chance to argue against it. New York State Supreme Court Justice Saliann Scarpulla agreed to delay approval of the deal until at least Feb. 19 to hear American International Group’s appeal. Last week, Justice Barbara Kapnick approved the settlement agreement, except for loan modification claims, as one of her last acts before she took a promotion to the state’s Appellate Division. BofA agreed...
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The mortgage market is just one month into the world of qualified mortgage lending under the Consumer Financial Protection Bureau’s ability-to-repay rule. But behind the scenes, investors, legal advisors and technology vendors are working to get ready to enter the non-QM space. “I can tell you, at least from the investor side, from the number of investors that I talk to – and some of these are cradle-to-grave guys that have originating arms in their organizations, or maybe correspondent networks for which they’re buying – they are building infrastructure and capability to process and buy these non-QM type loans,” said Dave Hurt, vice president at CoreLogic. “So there is genuine interest and significant enough confidence that there will be a market that they’re making investments both in technology and infrastructure to do that.” And it’s not...
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Interest shortfalls in the residential MBS space continued to drift higher across different collateral types, tranche types and vintages throughout 2013, according to Morningstar Credit Ratings. “As of the December 2013 remittance cycle, nearly one out of five deals (19.1 percent) in our sample experienced a shortfall in at least one tranche,” Morningstar said in a recent report. Interest shortfalls take place...
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Investors hoping to cash in on some of the huge returns realized by speculators in legacy nonprime MBS likely have missed the boat. Moreover, principal reductions on the remaining underlying loans are now deemed a credit negative. Trading in on vintage non-agency securities has been light of late. According to a recent report from Bank of America Merrill Lynch, the rally in such securities “has reached the ninth inning.” BAML notes...
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Although the city of Richmond, CA, is still toying with the idea of using eminent domain to seize underwater mortgages out of non-agency MBS trusts, it has yet to receive final approvals to do so. Moreover, even though speculation is mounting that its “partner” in the controversial tactic, Mortgage Resolution Partners, might be going away, the city’s mayor said she hasn’t given up. In an interview with Inside MBS & ABS this week, Mayor Gayle McLaughlin noted that “Eighteen elected officials I have talked to have shown an interest” in the concept. Those officials include representatives from San Pablo, CA, San Francisco, and smaller cities around Los Angeles. She also has spoken with officials in Irvington and Newark, NJ. Wall Street has lobbied...
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