Participants in the non-agency mortgage-backed security market are largely opposed to the Federal Housing Finance Agency’s proposal to create a platform to issue standardized non-agency MBS. While the FHFA suggested that the platform could revive the non-agency market, industry participants suggest that many issues besides a platform are hindering non-agency MBS issuance. “Key elements of the platform that are advantages for government-sponsored enterprise securitizations, such as standardization ...

Redwood Trust could issue a seventh non-agency mortgage-backed security before the end of this year, according to officials at the real estate investment trust, and the company is ramping up to hit a pace of a new MBS every month. “In terms of the residential business, generally I would say the stars are aligning,” Martin Hughes, CEO of Redwood, said last week during a presentation to investors. He noted increased guaranty fees for the government-sponsored enterprises, a decrease in conforming loan limits ...

A subsidiary of Credit Suisse Group last week issued a non-agency jumbo mortgage-backed security, its third of the year and the first that did not include mortgages from the shuttered MetLife. The loans were acquired on a flow basis by DLJ Mortgage Capital, a Credit Suisse affiliate. CSMC Trust 2012-CIM3 is backed by $329.89 million of jumbo loans originated by 15 lenders, including Quicken Loans (35.2 percent), PHH Mortgage (19.7 percent) and First Savings Mortgage (16.8 percent). The average ...

Originations of non-agency jumbo mortgages through three quarters in 2012 increased by 23.3 percent compared with the same period in 2011. While 12 non-agency jumbo mortgage-backed securities have been issued this year, jumbo originations are largely being held in portfolio by banks competing for high-quality borrowers. An estimated $148.0 billion in non-agency jumbos were originated through the first nine months of 2012, including an estimated $52.0 billion in ... [Includes one data chart]

To effect the types of changes required in order to bring private capital back to the housing finance market, a “collaborative effort” among market participants, regulators and policymakers will be necessary, noted the head of the Federal Housing Finance Agency. FHFA Acting Director Edward DeMarco told attendees of a Securities Industry and Financial Markets Association conference in New York City late this week that the existing secondary market infrastructure is “broken” and it will take agreement among market participants to decide the changes necessary in order to mend it better than ever. “As we think about building a new infrastructure for the secondary mortgage market, we know...

A federal appeals court has agreed to hear Credit Suisse’s appeal of a lower court ruling which gave the go-ahead for a group of investors in an IndyMac Bank MBS to proceed as a class in its suit against the lender. The U.S. Court of Appeals for the Second Circuit said last week it would hear Credit Suisse’s appeal of a Manhattan federal judge’s ruling in June which granted a December 2010 request for class certification to investors as they allege Credit Suisse misled them about the quality of toxic loans underlying a $642 million MBS offering in 2006. The plaintiffs claim...

The Securities and Exchange Commission has quietly dropped an investigation of Wells Fargo in relation to certain MBS transactions that occurred during the recent financial crisis. In a recent SEC filing, Wells Fargo disclosed notification by the SEC staff on Nov. 20 that an investigation into possible investor fraud has been completed and that there would be no recommendation for any enforcement action. In February this year, the SEC served...

A close comparative look at the stimulus activity of the Federal Reserve suggests its support of the MBS market delivers more bang for the buck to the overall U.S. economy than its purchase of Treasury securities, according to a top Fed official. “[B]uying MBS has a different effect on the constellation of credit-market rates than buying Treasury securities,” Fed Governor Jeremy Stein said in a speech. Taking a look at what happened in the credit markets in the wake of the Fed Open Market Committee’s Sept. 13 announcement of a new program to purchase an additional $40 billion a month of agency MBS, Stein found...

A new non-agency jumbo MBS from a subsidiary of Credit Suisse Group includes some key differences compared with Redwood Trust deals, while pumping life into the non-agency market. DLJ Mortgage Capital issued a $329.89 million non-agency jumbo MBS late last week via a private placement; it was the company’s third of 2012. CSMC Trust 2012-CIM3 received a AAA rating from Standard & Poor’s with credit enhancement of 5.85 percent on the top-rated tranche. The new Credit Suisse deal included...

New issuance of agency MBS jumped dramatically in November, hitting its highest monthly production volume in over three years, according to a new Inside MBS & ABS ranking and analysis. Fannie Mae, Freddie Mac and Ginnie Mae combined for a whopping $199.34 billion in new single-family MBS during November, a 46.4 percent jump from the previous month. It was the highest monthly agency MBS output since June 2009, when $232.13 billion of MBS were issued. The November surge may reflect...[Includes one data chart]