Items Tagged with 'RMBS'

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S&P: Mortgage-backed security market making a comeback in 2017

First quarter issuance doubled 2016’s total
Back in February, DBRS predicted that the residential mortgage-backed security market could see a resurgence in 2017 thanks to rising interest rates, which both drive down refinances and make securitization a more financially appealing option. As it turns out, that’s exactly what’s happening.
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Wells Fargo to face another lawsuit over defective mortgage securities

One of last remaining suits from financial crisis
Mega bank Wells Fargo is still not done working through the aftermath of the financial crisis. A judge ruled recently that plaintiff can move forward with a lawsuit against the bank over faulty residential mortgage-backed securities. Will Wells Fargo soon be done dealing with settlements from the crisis?
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Regulators deny JPMorgan Chase, Redwood Trust securitization innovation

Private market risk-sharing effort rejected by OCC
Last year saw a bit of innovation in the private-label securitization market, as JPMorgan Chase launched a new securitization option where some of the risk on non-agency mortgages is transferred to the private market through a risk-sharing deal. But, the Office of the Comptroller of the Currency rejected the innovative securitization structure. What does it mean going forward?
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Fed's Bullard says GSE reform could lead Fed to dump Fannie, Freddie holdings

Federal Reserve Bank of St. Louis president on future of housing
While it's clear the Trump administration plans to move on GSE reform, what isn’t known yet is just what those plans will look like. Further, what impact will those plans put on the country’s financial system? One area where the Trump administration’s GSE plans could reverberate is on the Federal Reserve and its mortgage bond holdings.
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Mortgage-backed security market to make a comeback in 2017

Higher interest rates facilitate return of securitization economics
While the housing market slowly recovered after the recession, the residential mortgage-backed security market did not. There were several reasons for the stagnation, including the market dominance from the GSEs. However, the RMBS market is preparing to make a comeback in 2017.
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Mortgage bond trader Jesse Litvak convicted of fraud, again

Found guilty on one count after Appeals Court tossed conviction on 10 counts
The tale of Jesse Litvak may finally be moving toward an ending, as a federal jury on Friday found the former Jefferies managing director and mortgage-backed securities trader guilty on one count of fraud. It's a significant difference from Litvak's previous conviction, when a jury found him guilty on 15 counts of fraud.
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RBS sets aside $3.8 billion more for RMBS settlement with DOJ

Getting closer to the finish line?
It appears that despite a new administration running the ship in Washington, D.C., the federal government still plans to seek restitution for the events that led to the financial crisis, or at least that’s what one foreign bank thinks. Royal Bank of Scotland said Thursday that it is setting aside $3.8 billion to be used to settle with the government.
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Morningstar: Here's the impact of rising interest rates on mortgage-backed securities

Prepayments will slow, default risk could rise
The latest data from Freddie Mac, released Thursday, showed that mortgage interest rates are on the rise again. What will the impact of rising interest rates be on mortgage-backed securities, especially private-label mortgages? A new report from Morningstar has the answers. And here they are.
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Societe Generale fined $50 million for pre-crisis RMBS fraud

Lied to investors about quality of underlying loans
In its last few days, the Obama administration announced multibillion dollar settlements with two foreign banks, Deutsche Bank and Credit Suisse, for each bank’s mortgage securitization practices leading up to the housing crisis. And on Friday, as most people focused on the inauguration of Donald Trump, the Obama administration announced one last settlement with a foreign bank for its pre-crisis activities – France’s Societe Generale.
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