RMBS
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Suit filed over alleged CMBS fraud
Sector developments and company hires
Suit filed over alleged CMBS fraud
Market Moves 27 June 2022
Kasowitz Benson Torres, as counsel to investment vehicles associated with Carl Icahn, has filed a complaint in Nevada state court against Rialto Capital Advisors for breach of contract and fraud. The case is in connection with Rialto’s servicing of a CMBS trust (COMM 2012-CR4) secured by the Prizm Outlets mall in Primm, Nevada, which .......
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Cost of living concerns
Inflation pressures to push up UK RMBS arrears
The cost of living is increasing at a rate not seen for decades, as consumer price inflation is on the rise and monetary policy tightens in response. Due to elevated levels of inflation, arrears in UK RMBS transactions are expected to increase over the coming 12 months.
“Most people expect some level of deterioration on asset performance towards .......
News Analysis 27 June 2022
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Changing the paradigm
John Pellew, principal, distribution and securitisation at A...
In isolation and in the absence of mitigating factors, non-performing loan and distressed assets are inherently high-risk investments, but that’s not the whole story.
While it’s true that we are dealing with defaulted loans and distressed assets, these assets are not sold in isolation or single units, and they are not sold because they have no value. They .......
Talking Point 23 June 2022
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EIOPA consults on securitisation review
Sector developments and company hires
EIOPA has published a consultation paper in response to the European Commission’s call for advice (CfA) to the joint committee (JC) of the European Supervisory Authorities (ESAs) regarding a review of the securitisation prudential framework (SCI 28 October 2021). Under the CfA, the Commission sought the assistance of the JC to assess the recent performance of the rules on capital .......
Market Moves 16 June 2022
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Doing the right things
Mark Davies, md, BCMGlobal Mortgage Services, answers SCI's questions
Q: How and when did BCMGlobal become involved in the securitisation market?
A: BCMGlobal services £3.2bn of securitised loans, totalling 23,000 borrowers, across circa 25 portfolios and 10 securitisation programmes. We act as a standby servicer for £7.1bn of securitised loans for 17 clients across 47 transactions. Our loan portfolios are domiciled and secured in the UK and Ireland.Provider Profile 9 June 2022
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Goodbye convention?
Demand for inclusive credit scoring intensifies
Institutional investors have joined the charge of securitisation professionals demanding more inclusive credit scoring methodologies, following the SFA’s call for the use of alternative credit scores amid enduring concerns over the wealth inequality gap in the US (SCI 6 April). A new study, commissioned by VantageScore Solutions and conducted by FTI Consulting, finds that institutional investors also desire more .......
News 6 June 2022
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MidOcean bags PE bigwig
Sector developments and company hires
Erik Oken has joined MidOcean Partners as chairman of its private equity business, based in New York. He will work directly with the firm’s private equity investment team, with the aim of adding valuable senior insights and oversight to its thematic investment approach. Prior to joining MidOcean, Oken spent over 30 years at JPMorgan, most recently serving as global .......
Market Moves 1 June 2022
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Fit for purpose?
ESAs urged to revive securitisation market
AFME and Paris Europlace have jointly called for the European Commission and co-legislators to step up efforts to finalise the European securitisation framework and make it “fit for purpose”. The move follows a High-Level Forum, which took place today (31 May), organised by the two associations to discuss the role that securitisation can play in helping to meet Europe’s .......
News 31 May 2022
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Portfolio progress
Business model rethink continues apace
The trend of banks rationalising their business models continues apace across Europe. This Premium Content article explores the role of securitisation in their portfolio optimisation efforts.
The need for banks to fundamentally rethink their business models emerged post-financial crisis and continues still across Europe. Beyond disposals of non-performing assets, this entails focusing on core strategies and markets, .......
News Analysis 25 May 2022
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Complex picture
European ABS/MBS market update
With two deals being pulled in the space of a week, the European ABS/MBS markets are facing thorny times. The current complex environment and volatility is set to hinder issuance in the short term.
Last Friday, HSBC announced it had to pull its UK student accommodation CMBS transaction – HXGN CMBS Finance 2022-1 – due to “exceptional market .......
News 20 May 2022
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'Investor-friendly' features introduced
Sector developments and company hires
Rising interest rates and widening spreads have spurred changes in US non-prime RMBS structures that introduce investor-friendly features for senior noteholders, Fitch reports. The move comes amid growing concern over coupon cap shortfalls and lower availability of excess spread.
As such, many issuers have reduced the aggregate servicing fee to 25bp (which historically has been 50bp), while some have introduced .......
Market Moves 11 May 2022
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Servicer strategies
BNPL affordability dynamic eyed
The rapid growth of the buy now, pay later (BNPL) sector (SCI 25 March), coupled with heightened costs of living, is altering the affordability dynamic within existing RMBS portfolios. Against this backdrop, investors are being encouraged to question servicers about their strategies for BNPL schemes.
“From a securitisation point of view, there aren’t huge issuances at the moment - and .......
News 10 May 2022
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Warehouse woes?
Turnkey solution offered amid labour shortages
US mortgage warehouse lenders face an increasing competitive landscape, with labour shortages posing an additional challenge. Against this backdrop, turnkey solutions could help lenders scale their businesses.
“The mortgage warehouse financing competitive landscape is increasing. The workplace environment is also evolving; many employees are looking for remote or hybrid working arrangements. Our clients have noted that it is .......
News 5 May 2022
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MSCI and MarketAxess collaborate
Sector developments and company hires
MSCI has announced its entry into a strategic collaboration with MarketAxess to establish new portfolio analytics solutions and fixed income indexes. The two firms hope to improve the fixed income investment process, empower investors, and drive innovation through their collaboration by developing portfolio optimisation, trading, and analytics tools. The collaboration will rely on MarketAxess’ fixed income indexes and AI-informed pricing .......
Market Moves 29 April 2022
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Full steam ahead
European ABS/MBS market update
With seven deals marketing, the European and UK primary ABS/MBS markets are set for bustling days ahead. While the market remained relatively unmoved either side of the Easter break, this strong surge in deals all scheduled for next week will certainly test investors’ appetite.
“With so many deals being announced, the doors are clearly open,” notes one European .......
News 22 April 2022
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ESG cat bond fund launched
Sector developments and company hires
Paschal Brooks and Justin Hull have co-founded Sustain ILS Management. Headquartered in New Jersey, the firm is an independent investment manager with a focus on sustainability and ESG within the catastrophe bond and reinsurance sectors. Brooks was previously ceo of AlphaCat Capital, which he joined in December 2011 as a portfolio manager. Before that, he worked at Goldman Sachs and .......
Market Moves 21 April 2022
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Dead CIRT
Fannie Mae places 4th CIRT of 2022
Fannie Mae has placed its fourth CIRT deal of 2022, a little over a week after its fourth CAS transaction of the year, the GSE announced today (April 19).
The transaction, designated CIRT 2022-4, transferred $844.8m of mortgage credit risk to 22 insurance and reinsurance firms.
The reference pool for CIRT 2022-4 is comprised by 76,600 mortgages with an unpaid principal balance .......
News 19 April 2022
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Landmark ruling
HEAT decision "watershed" for RMBS litigation
The New York Court of Appeals last month issued a landmark ruling in a case involving US Bank National Association versus DLJ Mortgage Capital, relating to the Home Equity Asset Trust (HEAT) 2007-1 transaction. The precedent-setting decision has ramifications for dozens of other US RMBS repurchase cases pending in the lower courts by significantly limiting the legal exposure of .......
News Analysis 13 April 2022
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Dutch courage
European ABS/MBS market update
The European and UK ABS/MBS markets are looking to take full advantage of a recent surge in activity. This week, with a number of deals due to price, the market will try to maintain its strong momentum into the Easter break.
After feeling the full effects of macro volatility, the European and UK ABS/MBS markets have over the .......
News 12 April 2022
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Going Dutch
Unprecedented RMBS issuance from the Netherlands
A new Dutch prime RMBS issuer has hit the market, following a slow-down in issuance across the segment in recent years (SCI 26 January 2021). The Athora Group is debuting Prinsen Mortgage Finance 1, as the Dutch RMBS market experiences unprecedented levels of activity this week (see SCI’s Euro ABS/MBS Deal Tracker).
The deal’s seller and .......
News 7 April 2022
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Mind the gap
Alternative data, RMBS to help address wealth inequality
Securitisation could prove a useful tool in addressing the growing wealth inequality gap. Indeed, the technology is already channelling capital towards underserved communities, aided by CDFI-backed RMBS and alternative data being used to calculate credit scores.
Elen Callahan, head of research at the Structured Finance Association, believes that the use of alternative data to assess consumer credit scores .......
News Analysis 6 April 2022