Royal Bank of Canada this week issued the first covered bond registered with the Securities and Exchange Commission. The $2.50 billion transaction was backed by a pool of Canadian mortgages, issued in U.S. dollars and received AAA ratings from major rating services. The SEC registration allowed RBC to sell pieces of the covered bond to non-institutional investors in the U.S. “The sale of covered bonds to retail investors will modestly expand the investor base, in our estimate,” said Howard Esaki, global head of structured finance research at Standard & Poor’s. The covered bond has...

Waypoint Real Estate Group confirmed this week that it received a $65.0 million loan from Citigroup to finance rentals of real estate owned properties. Industry analysts suggest that the financing from Citi is the first for the emerging sector from the debt markets and securitization of REO rental proceeds is expected soon. Officials at Waypoint said they could issue an REO rental security fairly quickly. However, before the Citi deal they noted that they were seeing better terms from balance-sheet lenders than from REO rental securitization. The rating services have issued...

The most pressing concern of the Federal Housing Finance Agency’s efforts to develop a post-Fannie Mae and Freddie Mac secondary mortgage market infrastructure is engineering a state-of-the-art securitization platform that could be used by either company, as well as private issuers, the agency head noted during a speech last week. Speaking at the National Association of Federal Credit Unions Congressional Caucus, FHFA Acting Director Edward DeMarco said the agency’s “immediate priority” is a single, common platform, not a single government-sponsored enterprise security. “A cornerstone of what we are seeking to build is...

Banks and thrifts held a record $158.5 billion of non-mortgage ABS in their investment portfolios as of the midway point in 2012, according to a new Inside MBS & ABS ranking and analysis. The depository institutions increased their ABS holdings by 3.1 percent during the quarter, pushing them past the previous record of $154.9 billion at the end of 2009. Bank and thrift ABS holdings have jumped by 14.1 percent since the fourth quarter of 2011. The biggest chunk of bank ABS holdings is...[Includes one data chart]

The Federal Reserve’s plan to purchase an additional $40 billion in agency MBS per month, above and beyond the $25 billion to $30 billion the Fed has been buying, will primarily benefit the agency MBS sector but could also spur revitalization of the non-agency market, analysts say. The open-ended plan, in effect until the U.S. economy and employment picture show significant improvement, adds some $480 billion in annual demand for agency MBS, a market that is on track to produce about $1.5 trillion in gross issuance. “The pressure on asset values to richen further will be substantial,” said analysts at Bank of America/Merrill Lynch. The additional MBS purchases and ongoing principal investments will...

House Financial Services Committee member John Campbell, R-CA, last week introduced H.R. 6397, the Defending American Taxpayers From Abusive Government Takings Act, legislation that would prohibit the origination of taxpayer-guaranteed mortgages in jurisdictions of the country where the power of eminent domain would be used to seize mortgages. If Campbell’s legislation is enacted – which is unlikely in the few days remaining in the legislative calendar of the 112th Congress, but probably will be resurrected in the 113th – it could prove fatal to a controversial eminent domain mortgage seizure plan proposed in recent months by Mortgage Resolution Partners. MRP’s plan would involve...

Fannie Mae and Freddie Mac mortgages originated in five states that have unusually slow foreclosure timelines would be subject to an additional, upfront guaranty fee, according to a proposal unveiled late this week by the Federal Housing Finance Agency. If implemented, the Finance Agency’s proposal would target five states – Connecticut, Florida, Illinois, New Jersey and New York – for an additional, one-shot guaranty fee of between 15 and 30 basis points in 2013. “The size of the fee adjustments are intended to reflect the disparity in costs, as compared to the national average,” explained the FHFA.

Although all of Fannie Mae’s nearly 700 real estate-owned properties sold earlier this month as part of the Federal Housing Finance Agency’s first announced REO pilot transaction moved at near or above market value, a market analyst says it remains to be seen whether this deal is the shape of things to come. San Diego-based Pacifica Companies LLC was the winning bidder of 699 Fannie properties throughout Florida. The firm paid $12.3 million for a share in a joint venture with Fannie, resulting in an estimated transaction valuation to the GSE of $78.1 million or nearly 96 percent of the properties’ estimated value, according to the transaction summary.

Fannie Mae announced this week it has tapped Bradley Lerman to be the GSE’s new executive vice president, general counsel and corporate secretary. Lerman, 56, joins Fannie Mae from Pfizer where he was senior vice president, associate general counsel and chief litigation counsel.Lerman replaces Timothy Mayopoulos, who was promoted to CEO in June.

The Federal Housing Finance Agency is currently pondering how, or whether, the GSE conservator will intervene in the controversial and ever more contentious proposal to use local eminent domain laws to effect principal reduction for homeowners by seizing mortgage loans. Early last month, the FHFA cited “significant concerns” about the eminent domain proposals, warning that “action might be necessary” on its part to avoid a risk to the safe and sound operations of Fannie Mae and Freddie Mac, as well as to avoid taxpayer expense. Some 74 organizations and members responded to FHFA’s request for input and submitted comment letters. “The acting director will consider the input received in making a final decision,” said a Finance Agency spokesman.