Securitization

Standard & Poor’s warned that the entrance of new and lesser known special servicing operations can overcrowd the market and complicate the servicing process.

The REIT wants to service the GSE products through a subservicing firm called Cenlar.

Servicers have become more comfortable with disposing nonperforming loans through either asset or note sales.

A copy of the memo, written by MBA president David Stevens, says the rules “will likely be proposed with some comment period.”

CMBS data provider Trepp said that only 26.3% of the loans that reached their balloon date paid off in July.

Analysts said that the recent trends in the auto ABS sector represent a normalizing lending market after many years of disruption.

The Federal Housing Finance Agency on Wednesday slammed plans by some local governments to use eminent domain to refinance underwater mortgages.

The bank plans to complete its first Ginnie Mae HECM MBS deal next month.

Refinancing and purchasing activity were both lower in the week ending Aug. 3.

The rating agency said that a number of positive factors should offset the setback including the record high 2011 harvest, among other things.

Roughly 60% of the banks listed capacity constraints and cross-servicer refinance issues as hurdles to refinancing more loans under the program.

The CoreLogic house price index rose for the fourth consecutive month in June and the vendor’s chief executive expects prices will remain positive during the second-half of this year.

Dealogic said that U.S. marketed RMBS volume is currently at $186.2 billion for 2012 year-to-date, which down 34% compared with 2011 year-to-date at $282.6 billion and the lowest year-to-date volume since $167 billion issued in 2009

With the private-label RMBS market currently stalled and the number of foreclosed homes and distressed borrowers at or close to record highs, Fitch Ratings said that investor, lender, and government agency interest is “clearly strong” for converting single-family real-estate-owned (REO) inventory into rental properties and securitizing the cash flow streams.

SNR Denton has hired Kenneth Wright Jr. as a partner in its capital markets practice. Wright was previously at Skadden, Arps, Slate, Meagher & Flom and will be based in SNR Denton’s New York office.

Results from a recent survey by CRE Financial Council (CREFC) and Trepp about commercial mortgage investment point to robust performance within insurance portfolios. The survey used industry data from January 1 to December 31, 2011 to assess investment performance during the downturn and for overall benchmarking purposes.

Speeds on average increased more than expected on 30-year conventionals for the July prepayment report.However, it was a result of faster-than-expected speeds on moderately seasoned 4.5% and lower coupons as borrowers responded to record low mortgage rate levels and lenders to the easier-to-refinance credits. Further gains are expected in August as mortgage rates averaged 13 basis points lower to 3.55% in July with refinancing activity up 1.8%. In addition, the number of collection days rises to 23 in August from 21 in July, which will contribute to further increases in speeds/paydowns. Meanwhile, the higher coupon Home Affordable Refinance Program (HARP)-eligible cohorts were in line with expectations at around 2%-3%. For August, speeds are projected to increase around 4%-5% with the higher day count a significant contributor. In general, HARP refinance activity has been viewed as stabilizing around current levels.However, last week's announcement from the Federal Housing Finance Agency and Freddie Mac indicate additional tweaks are forthcoming to reach more HARP-eligible borrowers. "These factors indicate HARP activity could remain elevated for a longer time than originally anticipated," said Barclays Capital MBS analysts. "As a result, talk of burnout in HARP 2.0 speeds is likely premature." Noteworthy in this report is that barring the GSE buyouts in early 2010, the July report recorded the highest aggregate monthly speeds for 30-year MBS in the post-credit crisis era, said JPMorgan Securities analysts. For example, FNMAs printed at 28 CPR versus 27 CPR in November 2010, 25.2 CPR in November 2011 and 25.8 in March 2012. FHMLC Golds paid at 29.2 CPR in July which was below its November 2010 CPR of 31.3, but faster than November 2011's 26.2 and March 2012's 28.2. GNMA's prepayment experience was likely more surprising as speeds increased much less than expected on certain cohorts impacted by the decline in Federal Housing Administration mortgage insurance premiums for pre-June 2009 borrowers.For example, while speeds on 2009 and 2008 vintage 4.5s were close to expectations, speeds on 2003 through 2007 vintage 5% coupons rose between 11% and 53% versus a predicted surge of between 50% and 150%. Capacity constraints at the mortgage lenders are the most likely reason for speeds falling short of expectations and so further gains for the effected cohorts will likely show in August. The better credit-quality 4.5 cohorts were also likely easier/faster to refi. There were delinquency buyouts from Bank of America, but they appeared to be less than expected in 6.0% and 6.5% coupons and more focused in 5.5s.Specifically, 2009 and 2008 cohorts surged 53% to 31 and 42 CPR versus a projected 35%-40% gain to 28 and 38 CPR. Part of this surge was in BofA, as well as, GMAC pools which suggest delinquency buyouts, but also from Wells Fargo which was likely refis associated with the reduction in mortgage insurance premiums. Overall, eMBS reported speeds on FNMA MBS increased 8.6% to 26.7 CPR in July from 24.4; FHLMC was up 5.9% to 27.3 from 25.7, while GNMAs jumped nearly 14% to 20.3 from 17.5. Gross issuance totaled $128.3 billion, while paydowns were $131.3 billion. This resulted in net issuance of negative $3.1 billion. Influencing factors for this report included record low 30-year mortgage rates which averaged 3.68% in June, down 12 basis points from May, while the Mortgage Bankers Association's Refinance Index surged 18.7% on average. Day count was unchanged at 21 days.An updated prepayment outlook will be out in the next week, but one particularly strong influence in the months ahead will be the number of collection days. After increasing to 23 from 21 in August; September drops to 19, while October holds at 22. Heading into the July report, speeds for August on conventional 30s were projected to increase around 5% CPR on aggregate and decline 10% in September.

WASHINGTON – Freddie Mac reported a $1.2 billion second quarter profit this morning, meaning the housing giant will not require government bailout funds this quarter for the first time since its 2008 federal takeover.

A large majority of banks participating in the Home Affordable Refinancing Program have restricted their refis to mortgages they already service or own, according to a July survey of senior loan officers by the Federal Reserve.