RMBS

  • Data integrity key to non-core divestments

    A common trend is emerging in loan book audits executed on behalf of asset purchasers in Ireland and Spain, according to Rockstead - the significant level of data integrity breaches. The firm says this problem could be easily overcome by the lender embedding data integrity within their servicing operations long before divestment becomes a reality.

    Rockstead notes that the first .......

    News Round-up 4 April 2013

  • New Dutch mortgage bonds on the cards?

    Ways of improving financing to the Dutch mortgage market are currently being considered by the country's authorities, in particular how to encourage increased participation from institutional investors. One proposal under discussion is the creation of a centralised Dutch mortgage bank (the NHI), which would issue multi-issuer standardised mortgage bonds (NHOs) explicitly wrapped by the state.

    The funding gap between Dutch .......

    News Round-up 4 April 2013

  • Freddie to issue modified pools

    Freddie Mac intends to start issuing pools of modified loans, which could offer a distinct investment opportunity. At the same time, the FHFA has announced a significant revision to the current modification process, which is set to increase the number of modifications executed and provide extra impetus to Freddie's plan.

    The FHFA's new guidelines - dubbed the streamlined modification initiative .......

    News 4 April 2013

  • NCUA settles with BofA

    The NCUA last week announced a settlement with Bank of America for US$165m for losses related to purchases of RMBS by failed corporate credit unions. The agency subsequently filed a petition with the Supreme Court of New York State to withdraw its objections against the US$8.5bn proposed Countrywide settlement (see also separate article on put-backs).

    NCUA has now successfully recovered .......

    Job Swaps 4 April 2013

  • Put-back progress

    RMBS repurchase cases move through courts

    Lawsuits resulting from RMBS representation and warranty breaches are taking longer to progress through the courts than was originally anticipated, although greater clarity on the outcomes is emerging. As well as the Countrywide and ResCap settlements, the door has now been opened for more monoline put-back cases to be brought.

    "Five years ago it looked like the repurchase process would .......

    News Analysis 4 April 2013

  • Servicing opportunities eyed in Spain

    Third-party non-performing loan servicers from outside Spain are seeking to establish platforms in the Spanish mortgage market that could bring additional specialist expertise to mortgage servicing, Fitch reports. The agency says that increasing use of specialised servicing platforms could be positive for RMBS portfolio performance, helping to achieve better recovery rates as delinquencies - and the resources required to deal .......

    News Round-up 3 April 2013

  • UK resi loss severities analysed

    Loan loss severities on UK repossessed properties have increased substantially alongside the proportion of loans suffering a loss, according to Fitch. Over 87% of properties taken into possession since 2008 have been sold at a loss to the lender, far higher than the 34% of repossessions prior to the financial crisis. The average size of the loss has also increased, .......

    News Round-up 3 April 2013

  • Freddie loan-level data welcomed

    Freddie Mac's public release of historical loan-level performance data on some of the mortgages it owns is an important step towards drawing private capital back to the US mortgage market, Fitch suggests. The agency says that the data helps pave the way for risk-sharing transactions that will allow the GSE to sell credit risk to the private market and to .......

    News Round-up 3 April 2013

  • New fund formed

    Deer Park Road Corp has confirmed the launch of its new ABS fund (SCI 4 December 2012), dubbed Burgess Creek Fund. The new fund will focus on bonds with steady monthly cashflow and high-yield characteristics, along with capital appreciation potential. The firm says that a number of investors have already expressed a strong interest in the strategy.

    .......

    News Round-up 3 April 2013

  • ARMOUR appoints strategy chief

    ARMOUR Residential Management, which manages ARMOUR Residential REIT and JAVELIN Mortgage Investment Corp, has appointed Desmond Macauley as director of mortgage strategy. He was formerly md in the RMBS strategy group at RBS and before that served as RMBS research vp at Merrill Lynch.

    .......

    Job Swaps 3 April 2013

  • Negative rating transitions 'less pervasive'

    Credit quality for global structured finance securities fell for the sixth consecutive year in 2012, again led by US RMBS, S&P reports. But downgrades were less pervasive and, with marginally improving global economic prospects and easing risks, the agency expects 2013 to mark a turning point for more stable credit performance.

    Going forward, S&P anticipates overall downgrade and default rates .......

    News Round-up 2 April 2013

  • RFC issued on affordable housing criteria

    S&P is requesting comments on its proposed methodology for rating US municipal affordable multifamily housing bond transactions. The proposed methodology will cover bonds supported by unenhanced affordable housing projects, federally subsidised projects and privatised military housing projects, as well as bonds backed by multifamily loan pools.

    The proposed criteria would affect no more than 450 rated issues, comprising about 160 .......

    News Round-up 2 April 2013

  • RMBS servicer transfers analysed

    A research report published by Opera Solutions argues that transferring US RMBS portfolios to new servicers is working. The study shows that new acquirers more actively manage their portfolios, resulting in faster liquidations and better performance on modified loans. It indicated increased stability in the RMBS market overall.

    The study follows 12 banks and loan servicers from both sides of .......

    News Round-up 2 April 2013

  • SAECURE surprise for Euro RMBS

    This week's SAECURE 13 deal seems to have caught many European RMBS traders by surprise, coming out of the blue in an otherwise pretty quiet week. The market has held fairly steady over the last few weeks as supply remains low, although developments in Cyprus have had an effect.

    "In the prime RMBS space we are seeing very small movements. .......

    Market Reports 28 March 2013

  • Second CRA takes MBIA action

    Moody's has placed on review for downgrade the ratings of 148 classes of US structured finance securities wrapped by MBIA Insurance Corporation and its affiliated insurance companies. The securities impacted include certain RMBS, ABS and CDOs.

    S&P recently lowered ratings on a raft of RMBS insured by MBIA (SCI 18 March) and Moody's placed the ratings of MBIA Corp itself .......

    News Round-up 27 March 2013

  • Basel Committee proposes exposure controls

    The Basel Committee on Banking Supervision has published a proposed supervisory framework for measuring and controlling large exposures, including securitisations. It aims to ensure greater consistency in the way banks and supervisors measure, aggregate and control exposures to single counterparties.

    The proposed standard would supplement the existing risk-based capital framework by protecting banks from substantive losses caused by the sudden .......

    News Round-up 27 March 2013

  • Fitch makes Alt-A rating changes

    Fitch has taken various rating actions on 10,133 classes in 772 US Alt-A RMBS transactions. The vast majority of tranches - 9,735 - have been affirmed, but there were also 49 classes upgraded, 346 downgraded and three classes with ratings withdrawn.

    The rating upgrades reflect the improving performance of the seasoned collateral, driven by positive selection on the remaining borrowers .......

    News Round-up 26 March 2013

  • Structural flaws limit RMBS ratings potential

    JPMorgan's first post-crisis RMBS, JPMMT 2013-1, would not be rated Aaa by Moody's. The rating agency explained last month that US RMBS with weak structural frameworks would not achieve top ratings (SCI 26 February 2013) and says this transaction contains several structural weaknesses that expose investors to risk of losses.

    The collateral in JPMMT 2013-1 consists of high quality loans .......

    News Round-up 26 March 2013

  • UK scheme is RMBS positive

    The UK government's plan to stimulate mortgage lending is credit positive for RMBS, argues Moody's. The government has announced a three-year scheme aimed at boosting high-LTV residential mortgage lending.

    The Help to Buy scheme starts in January 2014. It will involve the government partially guaranteeing up to £130bn of high-LTV loans for home purchases, which is 2.8 times the total .......

    News Round-up 25 March 2013

  • Fitch downgrades distressed bonds

    Fitch has downgraded 704 distressed bonds in 285 US RMBS transactions to single-D. They were all previously rated double-C or single-C and have either incurred a principal write-down or are interest-only classes that have a notional balance off a class that incurred a principal write-down.

    Of the 704 affected classes, 428 are Alt-A, 249 are prime, and 15 are subprime, .......

    News Round-up 25 March 2013

  • REIT eyes further purchases

    Two Harbors Investment Corp intends to use share sales proceeds to make further RMBS purchases. It has generated around US$763m by offering 57,500,000 shares and will also target prime jumbo residential mortgage loans, credit sensitive residential mortgage loans and mortgage servicing rights.

    Credit Suisse Securities is acting as the lead book-running manager for the offering. Barclays Capital, Bank of America .......

    News Round-up 25 March 2013
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