RMBS

  • Positive outlook for LatAm securitisation

    Prospects for the Latin American structured finance markets in 2014 are good, according to S&P. In particular, the agency expects demand among Mexican issuers and Brazilian investors to create new opportunities for dynamic securitisation structures.

    A rebounding Mexican economy is likely to increase funding needs for local issuers, while an anticipated slowdown in the Brazilian economy may spur investor demand .......

    News Round-up 31 January 2014

  • Third IABF sale announced

    The Dutch State Treasury Agency (DSTA) has launched its third competitive auction for the securities underlying the ING Illiquid Assets Back-up Facility. The auction will be conducted by BlackRock Solutions and comprise US$2.06bn current face across 234 non-agency RMBS.

    Eight broker-dealers have been invited exclusively to submit bids for the portfolio based on the strength of their reverse inquiries. They .......

    News Round-up 31 January 2014

  • Lehman settles with Fannie

    Lehman Brothers Holdings Inc's US$2.15bn settlement with Fannie Mae has been approved in the New York bankruptcy court. The GSE's original claim against the bank was for US$18.9bn, but it had since agreed that the reserve for its claim would be US$5bn.

    The agreement involves a sign-off among Lehman, Aurora Commercial Corp, Aurora Loan Services and Fannie Mae. The GSE .......

    Job Swaps 30 January 2014

  • Fed further reduces purchases

    The New York Fed is set to reduce its asset purchases next month by a further US$10bn, evenly split between agency MBS and Treasuries (SCI 19 December 2013). The bank now plans to buy US$30bn of agency MBS and US$35bn of Treasuries per month.

    The Fed will maintain its existing policies of reinvesting principal payments from its holdings of agency .......

    News Round-up 30 January 2014

  • Prior delinquents provide opportunities

    As part of a move to reduce its retained portfolios, Freddie Mac last year began securitisation programmes for current modified loans and re-instated loans (SCI 24 May 2013). The GSE's H pool, M pool and R pool securities represent new collateral types for agency RMBS that are expected to make attractive investments.

    Freddie Mac has only issued a small number .......

    News 30 January 2014

  • MI ratings to remain stable

    Moody's expects the ratings for Australian mortgage insurance (MI) companies to remain stable over the next 12 months. This is because MI companies are well-capitalised, have low and stable loss ratios, and retain their strong market positions.

    "We view the operating environment for the Australian MI industry as broadly supportive," says Ilya Serov, a Moody's vp and senior credit officer. .......

    News Round-up 29 January 2014

  • Borrowers 'still struggling'

    Recent US home price growth has been insufficient to help some borrowers still struggling to pay their mortgages, Fitch says. The agency notes that this is evidenced in the growing percentage of borrowers entering foreclosure with positive equity in their homes.

    Fitch estimates that the percentage of borrowers entering foreclosure with positive equity has roughly doubled in the last two .......

    News Round-up 29 January 2014

  • RMBS trading probes settled

    Jefferies Group has agreed to pay US$25m to settle US criminal and civil probes into RMBS trading abuses. The firm was investigated after former trader Jesse Litvak was charged with RMBS fraud a year ago (SCI 29 January 2013).

    Jefferies will pay US$11m to counterparties harmed in certain trades, US$10m to the US Attorney's Office and US$4m to resolve an .......

    Job Swaps 29 January 2014

  • RMBS cross trade charges settled

    A California-based investment adviser has been sanctioned for engaging in cross trading of RMBS which favoured certain clients over others and for concealing investor losses which resulted from a coding error. Western Asset Management Company has agreed to pay more than US$21m to settle with the US SEC and with the US Department of Labor.

    Western Asset engaged in illegal .......

    Job Swaps 28 January 2014

  • Asian ratings poised for positive performance

    S&P expects collateral performance and structural enhancement to underpin stable to marginally positive ratings performance for Asia-Pacific structured finance securities. However, tranches that have key rating dependencies on transaction counterparties could continue to be affected by the credit conditions that would impact the credit profiles of the counterparties, the agency says.

    The economic outlook is mixed across countries where outstanding .......

    News Round-up 28 January 2014

  • RMBS vet joins advisory

    Tanya Rajput has joined Opus Capital's client services group as a director. She was previously at Redwood Trust and before that worked at Arch Bay Capital, Washington Mutual and Countrywide.

    .......

    Job Swaps 28 January 2014

  • Current loan sales slammed

    SN Servicing Corporation's recent sale of both current and delinquent mortgage loans from scratch and dent RMBS trusts exposes the transactions to market value risk and raises concerns about potentially high losses in the deals, Moody's notes in its latest ResiLandscape publication. In one of the trusts - Security National Mortgage Loan Trust 2002-2 - investors lost US$8.1m as a .......

    News Round-up 27 January 2014

  • RMBS loss severities up

    US RMBS loss severities rose last quarter, following six straight quarters of declines, according to Fitch's latest quarterly index for the sector. Home price growth began to slow in 4Q13, while timelines continued to lengthen.

    "Judicial foreclosure states were a particular problem spot with respect to longer timelines last quarter, even as timelines in non-judicial states start to level off. .......

    News Round-up 24 January 2014

  • Fir Tree launches tender

    Fir Tree Partners has commenced a cash tender offer through its affiliate FT RMBS in connection with six RMBS that are subject to the proposed US$4.5bn JPMorgan settlement. The transactions involved are SACO 2006-3, 2006-5, 2006-6 and 2007-2, as well as BSMF 2006-SL1 and JPMAC 2006-WMC4.

    "We believe Fir Tree is offering a better recovery with a more certain payment .......

    News Round-up 23 January 2014

  • GNMA prepayments examined

    Ginnie Mae loan-level disclosures indicate that FHA-to-conventional refinances are a meaningful contributor to GNMA prepayments, Barclays Capital RMBS analysts note. They suggest that long-term GNMA new production discount speeds could be 3-4 CPR faster than their conventional counterparts.

    The loan-level data allows voluntary and involuntary prepayments to be attributed precisely to specific loan types. A Barcap analysis of the data .......

    News 23 January 2014

  • Jumbo CPR assumptions 'aggressive'

    The 15% CPR pricing speed assumption used for most US RMBS prime jumbo deals issued in 2012 and 2013 is aggressive and may underestimate extension risk in new issue prime jumbo securitisations, say Wells Fargo analysts. They suggest that a pricing speed range of 5%-10% CPR would be a better approximation.

    A bear steepening of the yield curve is expected. .......

    News Round-up 22 January 2014

  • Affordability surveyed

    Fitch expects house prices to increase modestly in the US and remain broadly flat in Canada in 2014. Meanwhile, Australian housing remains expensive by many global measures and slight nominal price increases are possible in Japan and South Korea.

    Fitch believes that most of the US will see continued home price growth, reflecting market momentum, the effects of inflation, the .......

    News Round-up 22 January 2014

  • Euro residential performance diverging

    The outlook for all major European residential mortgage markets has improved or stayed the same compared with a year ago, but performance among countries is diverging, Fitch notes. The agency expects house price affordability in some cities to be stretched further over 2014, given near-term expected house price increases.

    The divergence in European markets reflects country-specific property cycles and factors .......

    News Round-up 21 January 2014

  • QM rules to limit credit expansion

    The continued normalisation taking place in the US housing market provides scope for mortgage credit to expand from its current tight levels. However, Dodd-Frank ATR/QM requirements pose challenges for credit to expand to pre-crisis levels.

    Barclays Capital RMBS analysts believe that the majority of credit expansion is likely to come from QM loans, where some flexibility remains regarding FICOs and .......

    News 21 January 2014

  • Servicer stability examined

    Three US mortgage servicers - Ocwen, Nationstar and Walter Investment Management - have significantly grown their servicing portfolios over the past two years. Moody's focuses on the servicing stability of these three entities in its latest Servicer Dashboard publication.

    The agency notes that the three servicers have undergone rapid transformations, which continue to pose significant operational risks that constrain their .......

    News Round-up 21 January 2014

  • CFPB rules take centre stage

    From a US residential mortgage servicing perspective, last year will be remembered as a year of regulation and consolidation. However, going into 2014 the Consumer Financial Protection Bureau (CFPB) will take centre stage as the ability-to-repay (ATR), qualified mortgage (QM) and servicing rules go into effect, according to DBRS.

    The agency believes that the issuance of the ATR and QM .......

    News Round-up 20 January 2014
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