Committee Chairman Tim Johnson, D-SD, said the structure of the government guaranty for MBS “must be explicit, appropriately priced, and stand behind private capital that is not guaranteed.”

Citigroup Global Markets Realty is preparing to issue a non-agency jumbo mortgage-backed security next week, according to a preliminary term sheet provided to Inside Nonconforming Markets. The issuance would come just two weeks after Shellpoint Partners scrapped a planned jumbo MBS because of tepid investor demand. Blackstone is also offering the first securitization backed by rental proceeds from real estate owned properties and Freddie Mac is preparing its second non-agency risk-sharing transaction ...

The Federal Housing Finance Agency will announce 2014 loan limits for the government-sponsored enterprises near the end of November and provide lenders at least six months before the expected reductions take effect. “FHFA will follow its practice of announcing the 2014 conforming loan limits in late November, at which time further information will be provided on potential reductions in the size of loans the GSEs will guaranty going forward,” said Edward DeMarco, acting director of the FHFA ...

JPMorgan Chase’s settlement with the Federal Housing Finance Agency regarding representation and warranty claims on non-agency mortgage-backed securities could prompt large settlements by other banks, according to industry analysts. Chase agreed last week to pay $4.0 billion to settle claims on $33.8 billion of non-agency MBS purchased by Fannie Mae and Freddie Mac. The securities were issued between 2004 and 2007 by Chase, Bear Stearns and Washington Mutual. The settlement sets a “relatively high bar” for ...

Wells Fargo originated nearly one out of every five jumbo mortgages completed in 2012, according to a new analysis and ranking by Inside Nonconforming Markets of Home Mortgage Disclosure Act data. Wells had a 17.8 percent share of the $220.51 billion in non-agency jumbo mortgages originated last year, more than double its nearest rival. The origination volumes are based on one-unit conventional loan limits for specific metropolitan statistical areas and the $417,000 conforming loan limit [Includes one data chart] ...

A number of small subprime lenders report that they see strong demand from borrowers as well as investors looking for the strong, if risky, returns offered by subprime lending. At least two life insurance companies have approached Citadel Servicing about buying some of its new subprime loan production, according to company CEO Dan Perl. In an interview with Inside Nonconforming Markets, Perl declined to identify the insurance companies, but said he believes a market will soon develop for subprime mortgages ...

As credit standards continue to tighten in the face of soon-to-be-implemented regulations, potential nonprime borrowers will increasingly find themselves marginalized in the mortgage market, according to Lewis Ranieri, the former Salomon Brothers vice chairman who helped pioneer mortgage-backed securities four decades ago. In a new white paper Ranieri co-authored, he makes the case that mortgages with credit scores below 680 are currently considered subprime, while the subprime cutoff before the ...

Lenders are urging federal regulators to conform the definition for qualified residential mortgages with the qualified mortgage standards established by the Consumer Financial Protection Bureau. While regulators suggested that stricter standards for QRMs would prompt securitizations of non-QRMs, lenders warn that such standards would be onerous and likely significantly reduce non-agency mortgage originations and securitization. The Dodd-Frank Act requires federal regulators to establish risk-retention ...

Originations of nonconforming mortgages will likely be constrained by the weight of Fannie Mae and Freddie Mac as Congress takes three years or longer to enact reform legislation that will likely be implemented over a long-term transition plan, according to industry experts. The baby steps that have been taken this year – a GOP reform bill approved by the House Financial Services Committee and a bipartisan approach in the Senate – provide some momentum for resolving the five-year conservatorship of the two ...

Federal regulators issued guidance last week stating that they don’t anticipate elevated fair lender risk for lenders that choose to offer only mortgages deemed by the Consumer Financial Protection Bureau to be qualified mortgages. The guidance was prompted by concerns from lenders that would rather not originate non-QMs. “The agencies recognize that some creditors might be inclined to originate all or predominantly qualified mortgages, particularly when the ability to repay rule ... [Includes two briefs]