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Tag Archives: RMBS

Moody’s Takes a Closer Look at the Dynamics of Mortgage Re-Defaults

Moody's Investors Service studied two million loans backing residential mortgage-backed securities (RMBS) pools and found that a loan that is modified and then reported as current is three times as likely to default over the ensuing twelve months as a current loan that has not been modified. The agency's also put the practices of eight major servicers under the microscope. It found that six-month re-default rates vary considerably, from 20 percent for Citi and Litton to 33 percent for Bank of America.

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Moody’s Outlines Credit Concerns in Rating RMBS Resecuritizations

Moody's Investors Service has outlined several credit concerns that have led the agency to decline to give its highest ratings to resecuritizations of U.S. residential mortgage-backed securities (RMBS). Moody's says such denials are becoming more and more common. Among the agency's primary concerns are ambiguities in legal documents and uncertainties resulting from foreclosure irregularities.

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Fed’s Mortgage Investments Result in Record Returns

Income and expense data released by the Federal Reserve this week shows the central bank is earning a pretty penny from its investments in mortgage securities. The Fed began buying mortgage bonds from Fannie Mae, Freddie Mac, and Ginnie Mae in November of 2008 to help prop up the nation's deteriorating mortgage markets. In 2009, Fed officials reported that these efforts, combined with its purchases of Treasury securities, yielded a $46.1 billion profit. In 2010, earnings on those investments jumped to $76.2 billion.

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Losses on Private-Label Mortgage Securities to Increase: Moody’s

As the backlog of foreclosures continues to drive down housing prices, losses on private-label residential mortgage backed securities (RMBS) will increase in 2011, according to Moody's. The forecast for more red ink seeping from home loans sold to investors comes despite the fact that the agency believes the rate at which loans become delinquent will decline during the year. Moody's expects flaws in foreclosure practices that have recently come to light to delay foreclosures by three to six months, further extending the window of losses for investors.

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StellarOne Resolves Repurchase Claims With Primary Mortgage Investor

Lenders across the country are facing demands from mortgage investors to buy back faulty loans. Analysts praised Bank of America's settlement with the GSEs earlier the month for setting a precedent that other banks could follow to reconcile with investors, but some community lenders are already ahead of the game. StellarOne Corporation in Virginia says it has reached an agreement with one of its primary mortgage investors to resolve repurchase and indemnification claims to the tune of $1.45 million.

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Amherst Securities Adds New Executives to Mortgage Sales Division

Amherst Securities Group, a financial services provider to institutional investors in the mortgage sector, has hired three mortgage industry veterans for its sales division. Peter Davidson, Chris Heaney, and Chris O'Neill will help expand Amherst's client base and build on the services provided to existing clients. The company says their combined industry expertise and established client relationships across a wide range of accounts will deepen Amherst's presence in the mortgage-backed securities (MBS) space.

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Industry Responds to Massachusetts Foreclosure Ruling

The Friday ruling by the Massachusetts Supreme Court that invalidated two foreclosures by U.S. Bank and Wells Fargo has prompted an outpouring of responses from the industry, and many are wondering if the ruling will have far reaching effects on other foreclosure sales. The Supreme Court ruled the banks did not have the legal right to foreclose on homes in the state because they did not have proper documentation to prove they owned the mortgages at the time of foreclosure.

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Massachusetts Court Voids Foreclosures, Citing Note Transfer Errors

The Massachusetts Supreme Court ruled Friday that U.S. Bank and Wells Fargo did not have the legal right to foreclose on two homes in the state, invalidating the lenders' seizure of the properties and raising further questions about foreclosure documentation - this time related to the proper transfer of ownership on mortgages packaged as securities. Analysts warn that the decision could have far-reaching implications on loans that have already been liquidated, those in the process of foreclosure, and sales of bank-owned homes.

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SEC Subpoenas Big Banks’ Mortgage Securitization Documents

The Securities and Exchange Commission (SEC) is reportedly investigating lenders' procedures for packaging home mortgages into securities bonds for sale to investors. Reuters, citing two sources familiar with the probe, says the SEC sent subpoenas last week to Bank of America, Citigroup, JPMorgan Chase, Goldman Sachs, and Wells Fargo. The subpoenas focus on the earliest stage of the mortgage securitization process, in particular, the role of master servicers.

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Mortgage Banker Profits Rise with Secondary Market, Refinancing Gains

Independent mortgage banks and their subsidiaries made an average profit of $1,423 on each loan they originated in the third quarter, thanks to a surge in refinance activity and growing demand for mortgage-backed securities, the Mortgage Bankers Association (MBA) reported Tuesday. The third quarter's per-loan profit represents a jump of more than 55 percent from the $917 independent mortgage lenders made on each loan in the second quarter of this year.

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