Moody’s Investors Service analysts said that they expect rehabilitated FFELP SLABs pools to experience a higher net loss rate versus pools of non-rehabilitated FFELP loans.
Moody’s analysts said that even though rehabilitated FFELP loans have the same degree of federal guaranty and are probably going to have similar or lower net reject rates, this collateral type will probably default at a considerably higher rate compared with those that are non-rehabilitated.
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Liability management exercises are driving defaults and complicating recoveries in collateralized loan obligation pools.
The rating agency said CLO diversity insulates them from sector-specific shocks, fortifying them against the current weakness in software.
The drop in the annual metric for FHA loans was the biggest in over four years but other performance indicators ICE Mortgage Technology tracked were mixed.
First-loss risk prompts Ellington's migration to the mezzanine level, although some secondary-market equity gets thumbs up.
However, for the second quarter, increased home purchase mortgage activity contributed to an industry-wide 11% increase in agency securitizations, BTIG said.
