Agency MBS issuance rebounded from a sluggish April to yield $125.4 billion in new production last month, according to a new Inside MBS & ABS ranking and analysis. May issuance was up 14.8 percent from the previous month as 2012 continued to run well ahead of the pace set last year. A total of $619.4 billion of agency single-family MBS were issued during the first five months of the year, an increase of 26.9 percent over the same period in 2011. Production last month was a solid rebound from April’s sluggish $109.2 billion in total agency MBS issuance, but it was well short of...(Includes two data charts)

Non-agency mortgage-backed security investors are hoping to influence the implementation of the recent $25 billion foreclosure settlement and ward off similar agreements in the future. They raised concerns this week at a hearing before the House Financial Services Committee’s Subcommittee on Capital Markets and Government Sponsored Enterprises. “As it stands, it will damage residential MBS markets further,” said Vincent Fiorillo, a trading/portfolio manager at Doubleline Capital, on behalf of the Association of Mortgage Investors. “By adding yet another risk premium to government intervention, it will further...

The Obama administration is on the same page as Fannie Mae and Freddie Mac’s regulator in its desire to shift some of the mortgage credit exposure the government-sponsored enterprises hold to private investors. But exactly how to develop some sort of GSE risk-sharing program continues to bedevil policymakers, a Treasury Department official noted last week. Michael Stegman, a special advisor to Treasury Secretary Timothy Geithner, explained in a speech to real estate professionals that the Treasury is “actively engaged in helping to make this [GSE risk sharing] initiative work” but the...

A federal judge in Los Angeles has dismissed a number of claims in an American International Group lawsuit against Bank of America over mortgage securities issued by Countrywide Financial, although AIG has promised to continue its legal efforts to recoup more than $10 billion in MBS losses. U.S. District Judge Mariana Pfaelzer of the Central District of California in a new ruling dismissed AIG’s federal securities-law claims because they were filed too late – more than three years after the MBS were first sold. AIG filed suit against BofA as Countrywide’s owner and Merrill Lynch in New York state court...

The settlement baked into the Residential Capital bankruptcy agreement is facing new challenges, including one from Warren Buffet’s Berkshire Hathaway and another from unsecured creditors. When ResCap announced its bankruptcy last month, it did so with a plan to sell its mortgage origination platform and servicing rights to Nationstar Mortgage, a division of Fortress Investment Group, for $4 billion and its portfolio loans to its parent company Ally Financial. Part of the deal is a release of legal liability for Ally, which will pass along some of its lingering obligations – like follow through on the...

In an effort to standardize its commercial mortgage-backed security rating criteria, Standard & Poor’s plans to establish a single, all-around framework for rating U.S. and Canadian CMBS transactions. The credit rating agency is seeking comment on proposed criteria for structuring a new CMBS rating framework, which would be used to evaluate stand-alone, large loan and conduit/fusion CMBS transactions. Based on a representative sample of CMBS deals, a modest, limited impact on ratings may be expected on 25 percent of rated CMBS tranches, S&P said. The proposed criteria generally assume a...

Competition for non-agency jumbo originations is increasing, according to industry participants. The interest, largely from big banks looking to hold jumbos in portfolio and real estate investment trusts looking to securitize the assets, has led to a decline in interest rates.“All of a sudden it’s the asset of choice because big banks are uncomfortable with other assets, so they’re coming at jumbo home mortgages,” Jim Herbert, CEO of First Republic Bank, a lender that has long-focused on jumbos, said ... [Includes one data chart]

More than 1,800 comment letters were apparently not enough. The Consumer Financial Protection Bureau reopened the comment period last week on the pending ability-to-repay rule, with an emphasis on data relating to debt-to-income ratios. The rule will define “qualified mortgages” and the Dodd-Frank Act mandates that it be finalized by January 21, 2013. Data on agency mortgages helped prompt the request for comments, and the CFPB said it is hoping for similar data on mortgages in non-agency mortgage-backed securities ...

Non-agency mortgage-backed security investors and politicians on both sides of the aisle were critical this week of the recent $25.0 billion servicing settlement. The settlement requires principal reduction loan modifications on mortgages held in five banks’ portfolios and allows the servicers to receive credit for reducing principal on mortgages in non-agency MBS. Vincent Fiorillo, a trading/portfolio manager at Doubleline Capital, noted that the Association of Mortgage Investors is not opposed to principal reduction mods ...

Walter Investment Management is scheduled next week to begin subservicing the first batch of up to 30,000 mortgages in non-agency mortgage-backed securities for Bank of America. The transfer will mark the latest shift from BofA to subservicers as part of a still-disputed $8.5 billion proposed settlement with non-agency MBS investors. Nine subservicers were approved as part of the settlement: Acqura Loan Services, Bayview Loan Servicing, FCI Lender Services, Nationstar Mortgage, Residential Credit Solutions ...