Investments

Freddie Mac Q1 earnings increase driven by tax reform

Will not make payment to Treasury
While tax reform may have forced the GSE to make a draw from the Treasury during the fourth quarter, this quarter, the tables have changed. Freddie Mac announced the changes to the tax law helped drive its first-quarter growth. But it’s still not making a payment to the Treasury. Here’s why.
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From HW Magazine

How can we revive the private label MBS market?

Unresolved issues defy easy answers
One of the things that has bedeviled mortgage financing post-crisis has been the absence of the private label mortgage backed securities market. During the peak years, private label MBS issuance topped $1 trillion. In 2017, only $70 billion of private label RMBS were issued, although that is a big increase from 2016.
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Mortgage REIT merger: Two Harbors acquiring CYS Investments

Companies plot expansion into agency RMBS
Nearly two years ago, Two Harbors Investment Corp., a mortgage REIT, shuttered its mortgage securitization business, wherein the company bought jumbo mortgages and securitized them. And now, the company is preparing to expand its agency RMBS business by acquiring CYS Investments, a fellow mortgage REIT that specializes in investing in agency RMBS backed by fixed-rate single-family residential mortgage loans, adjustable-rate mortgages and hybrid ARMs.
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Waterton plans $2.5 billion investment in multifamily housing

Announces closing of $920 million investment fund
Waterton, a national real estate investor and operator, is planning to invest more than $2.5 billion in multifamily housing over the next two years after closing its largest-ever investment fund. According to David Schwartz, Waterton’s chief executive officer, chairman, and co-founder, the firm has big plans for Venture XIII, which is the firm’s largest fund ever.
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Point secures $150 million commitment to buy equity from homeowners

Atalaya Capital Management agrees to buy $150 million in shared equity investments
Point, a financial technology platform that offers homeowners the opportunity take equity out of their home without taking on new debt, is set to grow thanks to a $150 million commitment from Atalaya Capital Management, a private investment firm. Under the agreement, Atalaya and Point entered into a forward flow purchase program wherein the investment firm is committing to buy as much as $150 million of Point’s shared equity instruments.
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Citi’s slightly higher earnings pulled down by mortgage revenue in Q1

Causes retail banking to increase just 4%
Citigroup reported Friday a slight increase in its earnings from last year, but this was not thanks to its mortgage banking revenues, which actually pulled earnings down slightly. While the bank doesn’t say much on its mortgage activity, Citi did report that if it excludes mortgage revenues, its retail banking revenue increase doubles.
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Regions Bank invests in Kevin Costner-backed mortgage startup Lender Price

Will also begin using Lender Price to improve bank’s digital lending process
When a fintech startup announces a new investor, the investor is usually an equity firm or some other private investor. Lender Price, a mortgage and consumer digital lending technology platform provider, is going about things a little differently. The company’s lead investor is none other than Kevin Costner (yes, that one), and now, the company has a new investor, a prominent depository institution.
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Private capital interest in mortgages growing? Angel Oak closes its largest securitization

More than 80% of loans are non-QM
Earlier this year, Angel Oak Capital Advisors, an investment management firm that specializes in mortgage credit, raised $291 million to invest in mortgages that don’t fit inside the Qualified Mortgage box. Apparently Angel Oak’s investors aren’t the only ones interested in non-QM loans. Angel Oak announced this week that it closed its largest securitization to date, a $328.78 million offering comprised largely of non-QM mortgages.
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