Avalos’ resolution targets approximately 300 underwater private-label security loans that were made on homes “particularly concentrated in San Francisco’s historically black, Latino and Asian working class communities.”

A spike in issuance of jumbo mortgage-backed securities in the last days of the second quarter of 2014 wasn’t enough to boost issuance to the meager levels seen in the previous quarter, according to a new ranking and analysis by Inside Nonconforming Markets. Some $1.25 billion in jumbo MBS were issued in the second quarter, a 24.9 percent decline from the previous quarter. Four issuers brought deals to the market during the quarter ... [Includes one data chart]

Securitization, particularly non-agency securitization of subprime and Alt A mortgages, has been widely blamed for the recent financial crisis, although less-studied home-equity loans also may have contributed, according to a government working paper. Results suggested that securitized home-equity loans have higher default risk and produce greater loss severity than similar loans held in portfolio by lenders, according to authors Michael LaCour-Little, a professor of finance at California State University at Fullerton, and Yanan Zhang, a financial economist at the Office of the Comptroller of the Currency. The authors sampled...

Freddie Mac announced this week it has obtained insurance to cover some $285 million of losses on a pool of home loans as part of a risk-sharing effort encouraged by the government-sponsored enterprises’ regulator. The performance of these deals has been “stellar,” according to one analyst. The policies, tied to loans the GSE bought or guaranteed in the second quarter of 2013, were obtained under Freddie’s Agency Credit Insurance Structure. First rolled out in November 2013, this week’s most recent ACIS deal – the largest to date – demonstrates...

Senate Banking Committee Approves HUD, FHFA IG Nominees. The Senate Committee on Banking, Housing and Urban Affairs recently approved the nomination of Julian Castro as the next secretary of the Department of Housing and Urban Development. Castro, D, is the incumbent mayor of San Antonio, TX. The panel also approved the nomination of Laura Wertheimer as inspector general of the Federal Housing Finance Agency. The Senate has yet to confirm their nominations. Meanwhile, HUD Secretary Shaun Donovan’s nomination for director of the Office of Management and Budget was approved by the Senate Committee on Homeland Security and Governmental Reform on June 25. FHA Policies on Arm’s Length Transactions and Compliance with State Laws. The FHA is developing guidance to address concerns that laws in certain states may conflict with its arm’s length transaction requirements for preforeclosure/short sales. Until the guidance is issued, FHA lenders should seek guidance and assistance from the FHA National Servicing Center in matters of ...

Issuance of real estate mortgage investment conduits securities backed by agency MBS declined by 14.4 percent from the first quarter to the second, according to a new Inside MBS & ABS analysis. Fannie Mae, Freddie Mac and Ginnie Mae issued a total of $51.5 billion of REMICs during the second quarter. That left year-to-date production at $111.8 billion midway through 2014, down 25.8 percent from the same point last year. Ginnie remained...

The FHA is seeking comment on two new sections of a proposed single-family handbook for mortgage lenders. The handbook is in development. Once completed, it will serve as the centralized source of current and future FHA policies. Agency staff is collating policies from several handbooks, rules, mortgagee letters, notices and other sources to incorporate into the handbook. The FHA is publishing two new sections, “Doing Business with FHA – FHA Lenders and Mortgagees” and “Quality Control, Oversight and Compliance,” for comment. The “Doing Business” section lays out the requirements for FHA lender approval, including eligibility requirements, application processes, operating requirements and post-approval changes. The section also contains the recertification process as well as processes for applying for ...

The issue of eminent domain is rearing its head again, compelling mortgage and securitization industry groups to once more mobilize their resources to deep-six the latest initiatives. The most recent manifestation of a resurgent interest in eminent domain is in California, where John Avalos, a member of the San Francisco Board of Supervisors, has sponsored a resolution seeking to enter the city into a joint powers authority agreement with Richmond, CA, a vehicle by which both cities could seize underwater but performing mortgages using eminent domain. Avalos’ resolution targets...

The credit quality of the collateral backing the most active types of structured finance securities is slipping, but remains above pre-credit crisis levels, according to Moody’s Investors Service. In a report issued last week, Moody’s cited several trends that signal the potential for higher credit risk, but the rating service said that many sponsors are building in subordination levels and other structural features that result in higher credit quality. “The degree of weaker underwriting and collateral quality in structured transactions varies...

MBS prices have been hovering around their highs for the year and could stay that way through the fall with minor corrections occurring along the way. “Prices have risen even on the good economic news,” said Joe Farr, director of sales and marketing for MBSQuoteline. “But they fell by about 1 percent over the past week.” Recently, when the Consumer Price Index rose, there was...