MBS Investors

Browse articles from all of our Newsletters related to MBS Investors.

November 9, 2018 - Inside The GSEs

FHFA Releases GSE CRT Progress Report for First Half of 2018

Fannie Mae and Freddie Mac transferred risk on about $367 billion of unpaid principal balance in the first half of the year as the GSEs target a larger share of single-family loans. The Federal Housing Finance Agency published a credit-risk transfer progress report last week highlighting activity through the second quarter of 2018. This report marks the first time the FHFA is reporting the percentage of the GSEs’ targeted single-family and multifamily acquisitions that are covered by credit-risk transfer ...

November 9, 2018 - Inside The GSEs

Fannie Inaugurates REMIC Structure Latest CRT Deal

Fannie Mae’s last Connecticut Avenue Securities credit-risk transfer transaction of the year featured its first use of a structure geared toward attracting more investors. CAS Series 2018-R07, a $922 million offering, is Fannie’s first risk-transfer deal involving a real estate mortgage investment conduit (REMIC). Both Fannie and Freddie see REMICs as a key to unlocking greater participation by real estate investment trusts and offshore investors. Freddie issued its first CRT using a REMIC ...

November 8, 2018 - Inside MBS & ABS

Goldman Nears Settlement Goal, DOJ to File MBS Suit Against UBS, BofA Settles, MBIA Chalks Up Win

Goldman Sachs has forgiven a total of $78.7 million in principal on 746 first-lien mortgages since Aug. 1, 2018, as it neared fulfillment of a $1.8 billion consumer-relief obligation under two mortgage-related settlement agreements, according to independent monitor Eric Green.

November 8, 2018 - Inside MBS & ABS

Mortgage REITs Keep Selling Shares and Raising Cash. What Will They Do With the Added Capital?

So far this year, publicly traded real estate investment trusts that specialize in mortgages have raised $4.8 billion by selling additional shares of stock, on par with what they did all of last year. Now, comes the big question: What are they doing with all that money?

November 8, 2018 - Inside MBS & ABS

Federal Regulators’ Proposal to Loosen Capital/Liquidity Requirements Could Prompt Banks to Cut MBS Holdings

A proposal issued by federal regulators last week to ease certain standards for capital and liquidity will likely prompt banks to reduce their holdings of MBS, according to industry analysts. The complex proposal could prompt a $65.0 billion reduction in bank holdings of MBS, according to estimates by the Federal Reserve and Wells Fargo Securities.

November 2, 2018 - Inside FHA/VA Lending

GNMA Sees Growing Need for Financing of Nonbank MSR

Ginnie Mae officials would welcome a return of commercial banks to the program, but they are not planning on it. Instead, the agency is looking the other way: at expanding financing options for nonbank portfolios of mortgage servicing rights. The current version of Ginnie’s acknowledgement agreement has been successful, enabling nonbank servicers to arrange MSR financing for virtually their entire portfolios, said Michael Drayne, a senior vice president at Ginnie, during the Residential Mortgage Finance Symposium sponsored by the Structured Finance Industry Group this week in New York. Although a number of banks are financing nonbank servicing portfolios, many are still not participating, he said. Karen Gelernt, a partner at Alston & Bird, noted that many banks continue to have anxiety about what will happen if a servicer defaults on its Ginnie requirements. Speaking as moderator on a panel with ...

November 2, 2018 - Inside Nonconforming Markets

Verus Changes Course with Structure of MBS

An affiliate of Verus Mortgage Capital revised the structure of a planned non-agency mortgage-backed security, opting for a more traditional approach after initially planning to test a unique variation. The planned closing date for the $442.3 million issuance was also pushed back. When presale reports for Verus Securitization Trust 2018-3 were published in mid-October, the deal was structured with an initial pro rata structure that would shift to a sequential structure. The MBS ...

November 2, 2018 - Inside Nonconforming Markets

NRZ Looking for Non-QMs Beyond New Penn

New Residential plans to be a consistent issuer of mortgage-backed securities with non-qualified mortgages and the real estate investment trust is not just looking for loans from its recently acquired New Penn Financial. The first non-QM MBS from New Residential closed this week. All of the loans in the deal were originated by New Penn, an originator New Residential acquired in early July. Michael Nierenberg, chairman, president and CEO of New Residential, said the REIT is ...

November 1, 2018 - Inside MBS & ABS

Large Investor Preparing Clients for UMBS, Recommends Combining Mortgage Concentration to Avoid Challenges

One large fixed income investor is working with clients now to make sure they’re prepared to invest in the new single security when it rolls out next summer. Western Asset Management is advising investors to consider aggregating their mortgage concentration and exposure limits for the uniform MBS that Fannie Mae and Freddie Mac will issue in the to-be-announced market.

November 1, 2018 - Inside MBS & ABS

SFIG Plows Ahead on RMBS 3.0 Best Practices, Tackling Arbitration, Materiality, Other Issues

The Structured Finance Industry Group continues to wrestle with the demons of the past, the myriad issues that contributed to the downfall of the MBS and ABS markets a decade ago. Individuals working on various workstreams offered progress reports, stressing that the project is focused on best practices rather than rigid standards, at the group’s Residential Mortgage Finance Symposium in New York this week.

October 19, 2018 - Inside Nonconforming Markets

Fitch Calls Out Other Ratings on Galton MBS

Top-notch ratings assigned by three firms to a non-agency mortgage-backed security from Galton Funding prompted criticism from Fitch Ratings, which didn’t rate the issuance. The planned $452.7 million Galton Funding Mortgage Trust 2018-2 diverges from traditional non-agency MBS in its treatment of unpaid interest from delinquent mortgages. Fitch suggested that the change to the deal structure was so significant that it wouldn’t rate the transaction. Fitch noted that losses from unpaid ...

October 19, 2018 - Inside MBS & ABS

Ginnie Mae EVP Says Prepays are Still a Problem for Investors; Meanwhile, Stress Test Results Coming

Although prepayment speeds on Ginnie Mae MBS are now at the lowest level since 2014, agency Executive Vice President Maren Kasper expressed persistent concerns about the matter in remarks at the annual convention of the Mortgage Bankers Association this week.

October 12, 2018 - Inside MBS & ABS

MBS Trading Volume Improved in September, but Lenders And Issuers Are Anxious About the Interest Rate Picture

The average daily trading volume in agency MBS totaled $219.4 billion in September, a modest increase from the month prior, which marked a low point for the year, according to figures compiled by the Securities Industry and Financial Markets Association.

October 5, 2018 - Inside FHA/VA Lending

Around the Industry

FHA Issues Waiver of Property Inspections in Disaster-Stricken California Counties. FHA has issued a waiver of its timing policy for completing property inspections prior to closing or endorsing a loan for FHA insurance. The waiver is in effect in presidentially declared major disaster areas in Lake and Shasta Counties, CA, that were ravaged by wildfires and high winds. FHA believes that the wildfires and high winds have stabilized so as not to cause any further damage to properties, even though FEMA has not declared “all clear” in the affected areas. The waiver allows damage inspections to be completed after Oct. 2, for properties located in the PDMDA. NC Commissioner of Banks Amends State Reverse Mortgage Rules. The North Carolina Commissioner of Banks recently amended its ...

October 5, 2018 - Inside FHA/VA Lending

Senate Still Has Time to Enact VA ‘Orphan’ Loan Bill, Says MBA

The mortgage banking industry is optimistic about Congress enacting legislation that would cure VA orphan loans before the midterm elections. The U.S. Senate still has time to consider H.R. 6737, the Protect Affordable Mortgages for Veterans Act, according to Bill Kilmer, chief lobbyist at the Mortgage Bankers Association. “Most observers think [lawmakers are] going to be around until Oct. 18 or 19, which is when Senate Majority Leader Mitch McConnell said he wants to keep folks around to work on nominations and other measures they need to clear,” Kilmer said. “There is time and, more to the substantive point, the bill passed the House.” H.R. 6737 would provide a technical fix so that certain VA refinance loans would be eligible for pooling in a Ginnie Mae mortgage-backed security. The bill was reported out of committee by a unanimous 49-0 vote, and was approved quickly by the House ...

October 5, 2018 - Inside FHA/VA Lending

Solid Gains in Purchase-Mortgage Business Offset 3Q18 Refi Slump

Ginnie Mae issuance of single-family mortgage-backed securities rode a homebuying wave during the third quarter of 2018, according to a new Inside FHA/VA Lending ranking and analysis. Ginnie issuers produced $105.63 billion of new MBS backed by forward mortgages during the July-September cycle, a 7.1 percent increase from the second quarter. That brought year-to-date production to $296.88 billion – down 11.3 percent from the first nine months of 2017. Purchase mortgages provided the boost for the Ginnie market. Some $75.69 billion of FHA and VA purchase mortgages were pooled in Ginnie MBS in the third quarter, a sturdy 13.1 percent increase from the previous period. Purchase loans accounted for 75.1 percent of FHA and VA loans securitized in the third quarter, compared to 64.7 percent for all of last year. Although production of these loans has gone up since the first quarter, year-to-date volume ... [Charts]

October 5, 2018 - Inside Nonconforming Markets

Expanded-Credit MBS Issuance Up in 3Q18, Prime Non-Agency MBS Declines

Issuance trends for non-agency mortgage-backed securities stocked with newly-originated mortgages were mixed in the third quarter, according to a new ranking and analysis by Inside Nonconforming Markets. Issuance of prime non-agency MBS declined significantly on a sequential basis in the third quarter. And for the first time, expanded-credit MBS issuance volume topped prime non-agency MBS activity. Some $3.58 billion of expanded-credit MBS was ... [Includes one data chart]

October 5, 2018 - Inside MBS & ABS

As Primary Market Originations of Non-QM Loans Keep Growing, More REITs Plan to Enter the Fray

Real estate investment trusts, searching for yield, are looking to expand their role in the non-qualified mortgage market, with an eye toward providing greater liquidity to nonbank originators.


With loan volumes declining, does your shop have plans to enter the non-QM lending market in 2019?

Yes, definitely. A solid move forward.
Yes, but only incrementally.
We’re pondering a move into non-QM, but haven’t made up our mind.
No, definitely not. We view it has too risky.

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