Freddie Mac this week issued $1.04 billion of mortgage-backed securities backed by modified loans.The notes are being pooled into new Freddie Mac “Fixed-Rate Modified Participation Certificates” with new "MA-MD" prefixes. The GSE bought the majority of these loans out of participation certificates when they were at least 120 days past due. A Freddie official said that it will not sell the new bonds in the open market and instead will hold them on balance sheet.

Fannie Mae’s and Freddie Mac’ conservatorships have caused the government’s involvement in the mortgage market to “balloon to unhealthy proportions” since the two GSEs entered government conservatorship in 2008, creating far-reaching effects on the private sector, crowding out potential capital and blocking real market competition, according to the Mortgage Bankers Association.The fix, the MBA suggests, calls for the Federal Housing Finance Agency to require the two GSEs to accept loans with deeper levels of credit enhancement in exchange for reductions in guaranty fees and other loan-level charges.“By requiring the GSEs to offer programs such as up-front risk sharing between lenders and the GSEs, the FHFA would be taking a big step in the right direction,” said MBA President and CEO David Stevens. “Ultimately, this would put private capital, not taxpayers, in the first loss position and would allow lenders of all sizes to compete, driving down costs for borrowers.”

The $443 million non-agency MBS, Chase’s second of the year, is set to receive AAA ratings with credit enhancement ranging from 6.90 percent to 10 percent for the top tranches.

Freddie Mac is creating a large MBS backed by reperforming mortgages. But don't look for the bond to be sold in the open market.

Mortgage bankers originated $54 billion of jumbo loans in the first quarter, a slight decline from the prior period but the second best showing in two years.

The two biggest components of the residential mortgage market – conventional loans below the conforming loan limits and government-insured mortgages – saw measurable declines in new originations in early 2013, according to a new Inside Mortgage Finance analysis and ranking. The conventional-conforming market – nearly all of which is financed through Fannie Mae and Freddie Mac securitization – fell to an estimated $333.0 billion during the first quarter of 2013. That was down 5.4 percent from the fourth quarter of last year, but the sector still accounted for a hefty 66.6 percent of total originations during the period. The conventional-conforming market share hasn’t changed...[Includes two data charts]

CashCall, one of the largest call center lenders in the U.S., is open for offers, Inside Mortgage Finance has learned.

Private capital could better find its way back into the mortgage market, with decreasing costs for taxpayers and borrowers, if Fannie Mae and Freddie Mac would offer risk-sharing options to lenders at the “point of sale,” according to the Mortgage Bankers Association. The MBA first floated the concept several weeks ago at its secondary market conference in New York. In a white paper released this week, the group called on the Federal Housing Finance Agency to require the two government-sponsored enterprises to accept loans with deeper levels of credit enhancement in exchange for reductions in guaranty fees and other loan-level charges. “This new structure would bring...

Republicans and even some Democrats in the House are calling for significant changes to the Consumer Financial Protection Bureau’s ability-to-repay rule, but legislative changes appear unlikely as Democrats oppose most of the GOP proposals. One bill that is furthest along the uncertain legislative process is HR 1077, the “Consumer Mortgage Choice Act,” which would exempt certain fees from the 3 percent cap on points and fees for qualified mortgages under the ATR rule. The bill has 34 co-sponsors, including nine Democrats. Sens. Joe Manchin, D-WV, and Mike Johanns, R-NE, introduced companion legislation in the Senate last week. The bills have...

Whichever way the U.S. Supreme Court rules on the constitutionality of presidential recess appointments, the decision would probably cause more uncertainty and turbulence in the industries the ruling will likely affect, according to legal and policy analysts. SCOTUS is considering a petition filed last month by the Obama administration and the National Labor Relations Board to review a controversial ruling by the District of Columbia Court of Appeals that calls into question the validity of President Obama’s appointment of three new members of the board in January. In Noel Canning v. NLRB, the plaintiff challenged...