Moody’s Investors Service this week warned of increasing complexity in the structures of new jumbo MBS. However, losses on the deals will only occur in “low probability scenarios” and issuers have yet to bring back all of the non-agency MBS features seen before the financial crisis. Moody’s said complex cash-flow structures in new jumbo MBS can increase risks on senior bonds in the event of high mortgage losses. The features include super-senior support bonds, exchangeable securities, principal-only bonds, and pool interest-only bonds. “These securities pose...
“Our tool puts valuable information into the hands of the public in an accessible way," said CFPB Director Richard Cordray. But will consumers use this information against mortgage lenders?
The Federal Reserve’s relentless acquisition of agency MBS has been the biggest factor in the changing complexion of the MBS investor picture, far outstripping the tortoise-like pace at which the market has expanded this year. The Fed increased its agency MBS holdings by 12.8 percent during the second quarter of 2013, according to a new Inside MBS & ABS profile of investor classes in the mortgage securities market. The central bank added $137.2 billion to its agency MBS holdings during the quarter, and its gross acquisitions totaled $466.6 billion since the beginning of the year. That represented...[Includes two data charts]
A federal district court judge in Manhattan this week rejected Wells Fargo’s plea to dismiss a lawsuit alleging it lied about the quality of home loans submitted to the Department of Housing and Urban Development for FHA insurance over a 10-year period. District Court Judge Jesse Furman allowed government claims under the Financial Institutions Reform, Recovery and Enforcement Act of 1989 to proceed but ruled that legal injury claims based on events that transpired before June 2009 were time-barred and that the government had waited too long to file a lawsuit. The judge also threw out claims of negligence and unjust enrichment. The government filed...
The number of loans repurchased by lenders from Fannie Mae and Freddie Mac fell sharply during the second quarter from the record level set during the first three months of 2013, according to a new Inside Mortgage Finance analysis of repurchase disclosures by the two government-sponsored enterprises. In filings with the Securities and Exchange Commission, the two GSEs reported a total of $2.81 billion of mortgage repurchases during the second quarter, down 78.7 percent from the first quarter of 2013. GSE buybacks hit a record $13.21 billion in the first three months of 2013 as Fannie and Bank of America resolved their dispute over legacy loans sold to the GSE by Countrywide Financial. The settlement also helped wipe out...[Includes one data chart]
The House Republic legislation to eliminate the government-sponsored enterprises and replace them with private capital has no chance of passing in the Senate, according to Sen. Bob Corker, R-TN. He said the bipartisan approach he crafted with Sen. Mark Warner, D-VA, has a better chance of passing through Congress and maintaining wide availability of 30-year fixed-rate mortgages. “Going to a completely privatized system today to me is not something that has one chance of passing,” Corker said late last week in a conversation with Warner, hosted by Zillow. Corker was referring to H.R. 2767, the Protecting American Taxpayers and Homeowners Act, which the House Financial Services Committee approved in July. The bill isn’t on the House’s fall legislative agenda. “What Mark and I have done is...
Although Nationstar Mortgage has delayed loan closings in certain production channels due to what it calls a “switch” in document custodians, it continues to tap the capital markets for debt and servicing advances. This week alone, the nation’s sixth largest residential servicer priced $225 million in senior notes, and inked a deal for a new $1 billion servicing advance facility with Wells Fargo serving as trustee and Barclays Bank as the administrative agent. The lender is actually Barclays. A spokesman for the nonbank told...
If mortgage lenders don’t have enough to worry about with six new major mortgage rules from the Consumer Financial Protection Bureau that all take effect in January, they also face a heavier Home Mortgage Disclosure Act reporting burden and perhaps a greater litigation threat from some developments at the bureau. Last week, as the Federal Financial Institutions Examination Council was releasing the 2012 HMDA data, the CFPB came out with a set of online HMDA tools to enable consumers to explore mortgage application and loan data at a local level. “Just as the real estate motto ‘location, location, location’ was...
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