Read the latest articles and press releases about securitization and structured finance.

Industry News

FHFA: House Price Index Up 0.8% in July

On September 26, the FHFA released its national house price index for July 2023. According to the index, average home prices rose 0.8% from June to July 2023, and 4.6% on a year-over-year basis.

Industry News

CFPB Releases Annual Mortgage Market Activity Report for 2022

On September 27, the CFPB released its annual report on residential mortgage lending trends for 2022. The report notes that the average monthly principal and interest payment for a new 30-year fixed-rate mortgage originations increased more than 46% year-over-year, owing to high home prices and mortgage rates.

Industry News

Rising Insurance Costs Adding to CRE Challenges

According to the WSJ, commercial real-estate (CRE) insurance costs have risen 7.6% annually on average since 2017. Citing data from Moody’s Analytics, natural disasters, inflation, and a shrinking reinsurance market have pushed insurance premiums to record levels.

Industry News

GSEs, Ginnie Mae Expand Respective Social Bond Initiatives

On September 14, Ginne Mae announced the launch of a social bonds label for single-family MBS. Separately, on September 18, both Fannie Mae and Freddie Mac announced the expansion of single-family social disclosures for Super and Mega MBS pools.

Industry News

FHFA Announces Public Engagement Process for Updated Credit Score Requirements

On September 11, the FHFA announced next steps in the adoption of new credit score requirements by Fannie Mae and Freddie Mac. The FHFA is forming stakeholder forums and listening sessions to solicit additional public engagement during the transition.

Commercial Real Estate Poses Risk to Small and Regional Banks

According to the Wall Street Journal, U.S. banks doubled their commercial real estate (CRE) lending between 2015 and 2022, with many loans originated by small and medium-sized banks. According to WSJ analysis, bank’s total exposure to CRE—including indirect exposure such as bank lending to CRE financial companies, investments in CMBS, and foreclosed CRE properties owned by banks—is approximately $3.6 trillion.

Investors Prepare for CRE Opportunities

According to the Wall Street Journal, investors are finding opportunities in commercial real-estate (CRE). CRE owners have started to sell distressed properties at lower prices. Investor opportunities may continue to rise as CRE values have fallen 10-15 percent from Q3 2022, with the potential to fall up to 25 percent.

Large REITs Slow Commercial Mortgage Loan Origination

Mortgage real-estate investment trusts (REITs), which typically originate about $10 billion in loans per quarter, have significantly pulled back due to the downturn in the CRE sector. Mortgage REITs are scaling back originations to protect their balance sheets amidst the most challenging CRE market in decades.

Downturn in the CRE Market Trickles into Apartment Building Sector

Apartment buildings, though typically viewed as a lower-risk commercial real-estate (CRE) investment, have not been immune to the recent downturn within the sector. The issue doesn’t wholly lie in lack of demand, but rather in rising debt costs associated with higher interest rates.

Industry News

Home Insurance Companies Struggle with Lower Profitability and Rising Costs

According to the Wall Street Journal, home insurers have struggled to maintain profitability throughout five of the past six years due to increased claims and inflation. To encourage profitability, home insurers are attempting to pass a portion of costs to consumers through raised premiums and deductibles, as well as other subsequent policy adjustments.

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