How to simplify the appraisal process for everyone in today’s hot market

The housing market isn't slowing down anytime soon, and appraisers need to make sure they have the right tools to manage the high demand.

Who’s afraid of the PSPA?

Stakeholders are divided over whether, in light of proposed changes to its capital rule, the FHFA should retool its agreement with the U.S. Treasury and remove policies some say never belonged there in the first place.

Back to the Future of Mortgage Lending

This webinar will discuss what’s to come in the future of mortgage lending by analyzing past trends in the industry, evolving consumer behaviors and demographics of the industry’s production capacity.

Logan Mohtashami on jobs data and the bond market

In this episode of HousingWire Daily, Logan Mohtashami discusses what the jobs data, changes in the bond market, and the Omicron variant could mean for housing.

Investments

Royal Bank of Scotland won’t get in way of ‘artificially engineered’ CMBS market

In September, the Royal Bank of Scotland[stock RBS][/stock] recommended that investors “take some chips off the table,” thinking that commercial mortgage-backed securities rallied too far too fast

After witnessing the increase in total CMBS returns in September, driven, it says, by a frantic search for yield, folks at RBS are thinking again.

“This was clearly premature as a combination of global central bank stimulus compressing yields and a shortage of higher quality assets triggered an investor feeding frenzy driving valuations through many historical measures of fair value,” RBS’ sales and trading desk says.

Total returns increased by an average of 1.9% with longer duration and higher beta bonds outperforming, they say. The only index to realize a monthly decline was the VIX at -1.7%, with the other 18 indices gaining anywhere from 0.1% (AAA.3) to 4.2% (AM.4). At the same time, volatility increased an average of 3.5%, ranging from a decrease of 1.7% (VIX) to an increase of 7% (AJ.4), they add.

“While a host of daunting macroeconomic and geopolitical risks continue to lurk in the background, who are we to stand in the way of artificially engineered markets where fundamentals potentially no longer matter?” RBS asks.

Sixty-eight percent of CMBS loans that reached their balloon date in September paid off, creating the highest pay-off rate in four years. And the number of CMBS loans in special servicing fell significantly over the past two years

RBS reveals that in this “bizzaro market we are inclined to hold our nose and reluctantly recommend long positions over the short term in higher beta and longer duration positions.”

Barring a significant macro shock to the system, it believes these assets will continue to outperform in the near term as market participants continue their unquenchable search for short term yield.

jhilley@housingwire.com

 

 

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