Commercial banks and savings institutions held a total of $1.528 trillion in residential MBS in portfolio as of the end of the second quarter, down 2.1 percent from the end of March, according to a new analysis and ranking by Inside MBS & ABS. Combined bank/thrift investment in MBS has been under steady pressure since the Federal Reserve resumed buying massive amounts of new agency MBS. The second-quarter decline brought the industry’s total MBS portfolio to its lowest point in two years. The one area where banks and thrifts have beefed up...[Includes two data charts]

As Fannie Mae prepares to emulate the risk-sharing bond recently issued by Freddie Mac, concerns are arising that the government-sponsored enterprises are giving away a bit too much yield. Former GSE officials who have looked at Freddie Mac’s recent $500 million Structured Agency Credit Risk bond say the debt offering is a good investment for investors who are taking little risk while garnering a nice yield. According to Freddie Mac’s July offering circular on its STACR deal, the notes are divided...

At $20.7 billion, non-agency pass-through MBS accounted for just 1.4 percent of total bank and thrift MBS investments.

Freddie Mac’s multifamily K-Deals are “a model for the future of mortgage securitization,” according to David Brickman, a senior vice president overseeing multifamily activities at the government-sponsored enterprise. However, the risk-sharing deals face regulatory hurdles and differ in a number of ways from practices in the residential mortgage securitization market. While Brickman pushed K-Deals as a model, it wasn’t the design used in the Structured Agency Credit Risk risk-sharing transaction Freddie issued in July. K-Deals include subordinate bonds that are not guaranteed by the GSE, while the STACR transaction was unsecured corporate debt based on a reference pool of mortgages with Freddie taking a small first-loss position followed by two non-guaranteed tranches. When Freddie issued the STACR transaction, the GSE stressed...

Home Loan Servicing Solutions is preparing to issue a $350 million servicer advance receivable ABS, according to a presale report issued late last week by Standard & Poor’s. With the deal, $5.3 billion in mortgage servicer advance ABS will have been issued this year, according to the rating service. S&P has been the dominant rating agency in servicer advance ABS. Erkan Erturk, senior director of global structured finance research at the rating service, said issuance of servicer advance ABS is on track to reach the $7.0 billion in issuance S&P predicted at the beginning of the year. HLSS Servicer Advance Receivables Trust Series 2013-T6 received...

Lew Ranieri's company, Shellpoint, is coming to market with its second jumbo MBS deal of the year.

As leaders of the Senate Banking, Housing and Urban Affairs Committee double down on their efforts to craft a bipartisan mortgage finance reform bill, experts told lawmakers during a hearing this week that any reform effort must preserve the “smooth functioning” of the to-be-announced market. Given that it is reliant on MBS guaranteed by the government, the TBA market is “extremely sensitive” to any changes to the role that the government will have in the future housing finance system, according to Richard Johns, executive director of the Structured Finance Industry Group. “SFIG believes...

Banks, investors and their allies opposed to the City of Richmond, CA, using eminent domain to seize underwater mortgages, refinance and repackage them for sale to other investors were scheduled to have their first hearing in court at week’s end. Current investors, through trustees Wells Fargo and Deutsche Bank AG, have sued in U.S. District Court to block the plan. Parties in Wells Fargo Bank, National Association, as Trustee, et al., plaintiffs, vs. City of Richmond, California, a municipality; and Mortgage Resolution Partners LLC, defendants, Case No. CV-13-3663-CRB, were to appear Sept. 12 and Sept. 13, before Judge Charles Breyer of the U.S. District Court for the Northern District of California in San Francisco. The Securities Industry and Financial Markets Association and the U.S. Chamber of Commerce jointly submitted...

The Federal Home Loan Bank of Chicago will issue Ginnie Mae MBS backed by mortgages originated by member financial institutions, the two entities announced jointly this week. The new conduit product, called the MPF Government MBS, is an offshoot of the Chicago FHLBank’s Mortgage Partnership Finance program. The new product is intended to provide smaller mortgage lenders that lack direct access to the secondary mortgage market another option for their customers. Lenders will be...

Wall Street believes that housing/GSE reform legislation should provide for the creation of a single agency MBS.