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A Deal to Reinvent the Subprime Mortgage-Backed Security

By Matt Scully

If you thought the subprime mortgage-backed security was an artifact of the past, think again. Nomura Holdings and Angel Oak Capital have a deal that may help revive the part of the market that went bust during the crisis. Their success could encourage more banks to dip their toes back into riskier mortgages.


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Latest News

B2R Launches First-Ever Multi-Borrower Rental Securitization

– The transaction is expected to consist of $230 million in pass-through certificates rated by at least two rating agencies and backed by 144 single-family residences, two- to-four-unit properties, condos, townhomes and multifamily properties.

Orchard Teams with Kabbage to Sell Consumer Loans

– Lending analytics firm Orchard Platform has cut a deal with alternative small-business lender Kabbage to allow institutions to invest in the latter's relatively new line of consumer loans.

Citigroup Lines Up Latest High LTV, Low Amortization CMBS

– The $1.2 billion Citigroup Commercial Mortgage Trust 2015-GC29 is backed by loans with an average LTV of 104.6%; many pay no interest for all or part of their terms.

Higher Enhancement No Help for Wells Fargo's Latest CMBS

– The sponsor is paying interest of swaps plus 115 basis points on the 10-year senior tranche of Wells Fargo Commercial Mortgage Trust 2015-LC20. That's the same level as the senior tranche of Deutsche Bank's latest conduit.

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Featured Articles

Snow Bank: Boston Takes Another Look at Catastrophe Bonds

– The Massachusetts Bay Transportation Authority had previously looked into cat bonds and decided not to pursue issuance, according to deputy general manager and chief financial officer Jonathan Davis. Then came 110 inches of snow.

Here's What Happens to European ABS as Interest Rates Turn Negative

– In theory, asset-backed investors could be forced to pay for the privilege of holding these securities. Sounds crazy, but it's enough of a concern that several new deals contain provisions putting a floor on interest rates.

Leveraged Loan Settlement Times Improving, But Miles to Go

– Prolonged trade settlement times are a thorn in the side of the leveraged loan market; there are some recent signs of improvement, though settlement times still vary widely by agent bank.

Simon’s Macerich Bid Could Hit 18 CMBS

– There are 17 loans secured by Macerich shopping centers packaged into 18 commercial mortgage-backed securities. Bondholders would be wise to watch how Simon Property Group's takeover bid unfolds.

B of A Puts Countrywide Behind It, But Not MBS Woes

– A New York appeals court on Thursday overturned Judge Barbara Kapnick's ruling from last year that delayed the bank's $8.5 billion agreement with investors. Just three more large legal overhangs to go.

European CLO Managers' Lament: No Market for Sterling Tranches

– Many would love to do more multi-currency deals, which would make it easier, and cheaper, to source collateral. But there’s not much demand for sterling tranches.

American Homes 4 Rent Deflates Balloon Repayment Risk

– American Homes 4 Rent’s latest transaction, AH4R SFR 2015-1, deals with one of the biggest risks inherent in single- family rental bonds: balloon repayment risk.

With Ocwen, Enforcement Is a Balancing Act

– State attorneys general continue to aggressively investigate Ocwen Financial's mortgage servicing practices, but they are also mindful that too much enforcement could cripple the company and cause major headaches for millions of homeowners whose loans Ocwen services.

What Auto Bubble? Exeter Looks to Deflate Critics

– The chief executive officer of Exeter Finance responds to critics who argue that it's become too easy for Americans with low credit scores to finance a car purchase

For Grexit Securitization Fallout, Look to Argentina

– If you want an idea of what a Grexit would do to the roughly $16.7 billion of securitizations out there backed by assets in Greece, a good place to start is Argentina circa 2002-2003.

B of A Bids Adieu to Its Student Loans (Or Does It?)

– Bank of America is following Wells Fargo by putting out for sale the last of its federally guaranteed student loans; it may well repurchase them one day if they are securitized.

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In the news: European CLO Managers' Lament: No Market for Sterling Tranches

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Current Issue

With Ocwen, Enforcement Is a Balancing Act

State attorneys general continue to aggressively investigate Ocwen Financial's mortgage servicing practices, but they are also mindful that too much enforcement could cripple the company and cause major headaches for millions of homeowners whose loans Ocwen services.

Current Issue