As default rates on vintage non-agency MBS have improved, performance and investor proceeds this year will largely be based on servicers’ actions, according to Standard & Poor’s. Loss mitigation, work-out timelines and other servicer behaviors are of particular concern for investors. S&P said its outlook for performance of vintage non-agency MBS is stable. Feedback from servicers indicates that the number of new loan modifications on mortgages in non-agency MBS this year will be near levels seen last year and well below activity in 2010. Instead of quantity, S&P said, servicers have focused on quality. “It appears...

Standard & Poor’s was the most active rating service in the non-mortgage ABS market during the first quarter of 2013, according to a new Inside MBS & ABS analysis, while DBRS continued to dominate the non-agency MBS space. S&P rated a total of $31.9 billion of newly issued ABS during the first three months of the year, or 67.8 percent of total issuance. That was up from the company’s 58.1 percent share of ABS ratings for all of 2012. S&P was particularly strong in rating credit card ABS, covering 86.1 percent of that market after grading just 50.3 percent of last year’s card deals. Because nearly all public deals have multiple ratings, the sum of the ratings by firms exceeds...[Includes two data charts]

The retained mortgage portfolios of Fannie Mae and Freddie Mac continued to decline through natural attrition during the first quarter of 2013, falling by 4.9 percent from the previous quarter, according to an Inside MBS & ABS analysis of earnings reports released by the two government-sponsored enterprises this week. Fannie and Freddie held $1.13 trillion in mortgage assets as of the end of March. With heavy refinance activity, the rate of decline in early 2013 was faster than it had been; GSE holdings were down 13.6 percent from year-ago levels. There was...[Included one data chart]

Fannie Mae’s and Freddie Mac’s multifamily businesses hold “little inherent value” and would be less viable absent the government guarantees the two government-sponsored enterprises currently enjoy, according to the Federal Housing Finance Agency. In a new report, the agency also noted that the sale of the GSEs’ multifamily businesses would yield “little or no value” to the U.S. Treasury or to taxpayers, while at the same time it could be a huge disruption to the commercial real estate markets. “The new ‘stand-alone’ businesses would primarily depend...

Bank of America and MBIA announced a settlement this week of a long-running dispute regarding representations and warranties on mortgages securitized by Countrywide Financial. The settlement benefits non-agency MBS wrapped by MBIA, according to industry analysts. The settlement applies to all outstanding rep and warrant claims and all other claims between the bank and bond guarantor. BofA agreed to pay MBIA approximately $1.6 billion in cash and remit to MBIA all of the outstanding notes in the firm that BofA acquired in December. BofA also will terminate...

Ginnie Mae President Ted Tozer said the agency wants to phase out the Ginnie I MBS program.

The first GSE risk sharing transaction is likely to be a senior-subordinate structure and be issued as a credit-linked note.

Although it's unlikely that Fannie Mae and Freddie Mac will engage in principal reductions anytime soon, a new report from CBO says it could do some good.

Will investors in GSE stock sue the federal government for "sweeping" earnings out of Fannie Mae and Freddie Mac? Meanwhile, PennyMac worries about its "Countrywide" problem.

Whether or not President Obama’s pick to become the new permanent director of the Federal Housing Finance Agency overcomes the long odds and expected Republican opposition to win Senate confirmation, it’s a win-win for the White House, say industry observers. Last week, Rep. Mel Watt, D-NC, a 20-year House veteran, all of it spent serving on the Financial Services Committee, was selected by Obama to become the new FHFA director, replacing FHFA Acting Director Edward DeMarco, who has served as the agency’s acting head since September 2009. Although Watt had been on the short list of FHFA nominees, it was widely believed that Moody’s Analytics’ Chief Economist Mark Zandi would be the president’s pick, largely because Zandi was seen as “confirmable” by both Democrats and Republicans.