Asset Securitization Report - April 2018

Nonbanks are originating more commercial mortgages on fixer-uppers in response to a sharp drop in the cost of funding in the securitization market. These deals are said to be "vastly different" than other CRE instruments that sustained big losses in the crisis — so far.

"Golden" shares with veto power over bankruptcy filings are commonly used as a backup measure for special purpose vehicles, but there are several issues to be addressed as case law develops.

Department of Education Secretary Betsy DeVos says the companies hired by the government to service its own loans should only be subject to federal oversight.

An affiliate of the private-equity firm Angel Oak is packaging bank-issued sub debt to minimize risk for bondholders. It recently completed its first securitization and has plans to issue two deals a year.

Demand for hotel rooms is running high, and mortgage bond investors are lining up to finance acquisitions and upgrades of even the largest resorts.

Timothy Bowler, president of the ICE Benchmark Administration, which has been responsible for calculating the index since mid-2013, argues that there is a strong case for keeping it going.

So far, consumers have not had much voice in the discussion of a suitable replacement for the benchmark rate; lenders and servicers want to limit any harm, and their liability.

Acting commissioner Dana Wade said the agency is "vigilantly" watching whether it needs to take action on PACE assessments placed on mortgages after they are endorsed by the agency.

Greenworks CEO Jessica Bailey said execution was good enough that it made economic sense; the company also wanted an early reading from rating agencies and investors.

LendingClub, Marlette and others are looking at additional changes to both their securitization and whole-loan sale programs that could further broaden their investor bases.