One ad on the radio sounds like The 60 Plus Association is doing the Lord’s work for the pension funds of fire fighters and policemen. After all, public pensions owned GSE stock prior to the crash and lost a bundle.

Mortgage bankers have been complaining loudly about escalating compliance costs since the CFPB opened its doors in 2011. Some smaller nonbanks have cited those rising costs as one reason they might be forced to merge with better capitalized institutions.

“Watt will want to draw a line of demarcation between him and DeMarco,” said one source. “Going forward, I think we’ll see an emphasis on average credit scores funded and even servicing performance.”

The only spurt of growth in the MBS market was in the non-agency sector, where new issuance was up 36.5 percent from the fourth quarter.

“When a servicer recognizes losses on loans previously modified with forbearance, it could significantly impact cash flows across the capital stack,” writes Bank of America Merrill Lynch.

The Securities and Exchange Commission late last week gave the securities industry another month to file comments on a proposed rule that most participants already know they don’t like. Comments were originally due March 28 on the SEC’s latest proposal to require asset-backed securities issuers to make loan-level details about pending issues available to investors on their own websites, rather than the agency’s Electronic Data-Gathering, Analysis and Retrieval system. On the day the comment period ended, the SEC extended it to April 28. Many issuers and large banks think...

Allonhill LLC, a Denver-based due-diligence firm that served both Wall Street and primary market lenders, recently filed for bankruptcy protection, just days after losing a civil case where it was found liable for breach of contract and fraud, and ordered to pay its former client, Aurora Bank FSB, more than $25 million in damages. Last year, Allonhill’s owners – including principal Sue Allon – sold most of the firm’s assets to Stewart Title. From a legal standpoint, it was not a “franchise” deal, which means Stewart should not be on the hook for any actions of the corporate entity. However, the case may be...

A North Carolina federal magistrate has recommended that a Justice Department fraud case against Bank of America be dismissed, but he also said a separate Securities and Exchange Commission lawsuit against the bank based on a different federal law should proceed. The DOJ last August filed suit against BofA under the Financial Institutions Reform, Recovery and Enforcement Act, accusing the bank of defrauding investors in the sale of $855 million of non-agency MBS. Last week, U.S. Magistrate David Cayer of the U.S. District Court for the Western District of North Carolina found that the government failed to prove the bank made “material” false statements to the former Federal Housing Finance Board. The DOJ claimed...

Leading secondary-market representatives told the Financial Industry Regulatory Authority they generally support its goal of mitigating the counterparty credit risk borne by participants in the “to be announced” market and reducing the potential for systemic risk. But they are opposed to FINRA’s proposal to require maintenance margin to attain that aim – something the Treasury Market Practices Group has already considered and rejected. Issued back in January, FINRA’s proposed amendments stipulated that for bilateral transactions in covered agency securities with non-exempt accounts, FINRA members must collect, in addition to variation margin, maintenance margin equal to 2 percent of the market value of the securities. If sufficient margin is not collected, the member would have to deduct the uncollected amount from the member’s net capital at the close of business following the business day on which the deficiency was created. Additionally, if the deficiency in margin is not resolved...

At least 46 vintage non-agency MBS took principal forbearance-related losses in March, according to industry analysts. The losses are a concern for investors because they were taken without warning, based on forbearance that happened well before March. Most of the deals taking retroactive forbearance losses in March were issued by Bear Stearns from 2005 through 2007 and were largely serviced by JPMorgan Chase, according to analysts at Bank of America Merrill Lynch and Barclays Capital. Write-downs on the deals were as high as 6.8 percent for a single month. “When a servicer recognizes losses on loans previously modified with forbearance, it could significantly impact...