Fitch Ratings has combined its criteria for rating residential mortgage originators and third-party due diligence involved in non-agency MBS issuance. The company said the move does not involve any material changes to its rating methodology. All originators contributing loans to non-agency MBS rated by Fitch are subject to periodic reviews by the rating service that can lead to adjustments in loss estimates for the deals or even cause the company not to rate a transaction at all. The rating service will look at the performance history of the loan originator, including repurchase requests...

Western Asset Management, a real estate investment trust, has announced a $160 million initial public offering to finance purchases of agency MBS. The Pasadena, CA-based company, a fixed-income subsidiary of Legg Mason, plans to raise cash by offering 8.0 million shares to investors at a price of $20. It also plans to offer 2.2 million units, consisting of a share and a warrant to half a share, and 46,043 shares in concurrent private placements. According to Renaissance Capital, the REIT will command a market value of $207 million after the offering. JPMorgan Chase, Deutsche Bank...

Participants in the startup of the new central counterparty for agency MBS trades realized a sharp reduction in costs and operational risks, according to the CCP’s sponsor, the Depository Trust & Clearing Corp. The first settlement cycle run through the CCP resulted in a 70 percent reduction in the volume of pools and payments needed to settle all the trades, said the DTCC. The central counterparty began operation on April 2. In the first trade cycle, the CCP was able to reduce some 43,000 pool allocations to fewer than 13,000 through netting, the sponsor reported. As the month went along and...

The volume of commercial mortgages in special servicing has continued to decrease since its peak, with more loans getting transferred out than loans transferred in, thanks in great part to a large number of loan resolutions, says a new report on commercial MBS by Fitch Ratings. Special servicers decide whether to liquidate loans or modify them, with all active special servicers ultimately liquidating a larger proportion of loans than returning them to master servicing, according to the Fitch report. In total, 71 percent, or 4,160 loans, were liquidated while 1,672 were returned to master servicing. Of...

In an effort to aggressively expand the recently retooled Home Affordable Refinance Program, Fannie Mae is encouraging lenders to make the most of HARP 2.0’s looser rules on marketing directly to eligible borrowers. The government-sponsored enterprise created “outreach materials” to help jump-start lenders’ marketing efforts to would-be borrowers who aren’t aware they may qualify for a HARP refinance. “Fannie Mae developed these model ‘HARP Materials’ to facilitate borrower consideration of HARP refinancing options that may be available through participating lenders and servicers...

New issuance of agency MBS declined sharply in April as refinance activity in the primary market began to slow down despite concerted efforts by many lenders to ramp up Home Affordable Refinance Program business. A new Inside MBS & ABS analysis and ranking reveals that a total of $109.2 billion of single-family agency MBS was issued last month, down 29.2 percent from March. It was the lowest monthly output since October of last year, when the refi market started to gather momentum. The decline was all attributable to Fannie Mae and Freddie Mac, which pick up more refinance...(Includes one data chart)

Freddie Mac reported net income of $577 million for the first quarter of 2012 and nearly enough other comprehensive income (OCI) to offset its required dividend payment to the government. The government-sponsored enterprise piled up $1.21 billion in OCI largely from improved values on its mortgage securities holdings. Net income was down from $619 million in the fourth quarter partly because of higher derivative losses. Total comprehensive income came to $1.79 billion, a little short of the GSE’s $1.81 billion dividend payment. Freddie...

NMI Holdings, Inc. has raised $550 million in initial capitalization to provide private mortgage insurance on loans sold to Fannie Mae and Freddie Mac. The money was raised through the sale of common stock in a private offering underwritten and placed by Arlington, VA-based investment bank FBR, which reportedly has a less than 5 percent stake in the new company. FBR declined to comment on the NMI transaction, citing restrictions on what it and NMI can disclose or say over the next couple of months. NMI is currently working on obtaining approvals from state insurance regulators across the country and approvals...

Although the Obama administration has failed to put forth any definitive proposal for mortgage finance reform and Congress has made little progress on the issue, some researchers are urging policymakers to reduce the role of government as much as possible. “I would dearly love to get rid of the government guarantee,” said Anthony Sanders, professor and senior scholar at George Mason University’s Mercatus Center during a panel discussion in Washington, DC, regarding the future of the government-sponsored enterprises. He added, however, that housing policy must carefully avoid creating a market...

Mortgage industry officials are urging the Consumer Financial Protection Bureau to give the industry plenty of time to implement the extensive – and inter-related – changes that are required under the Dodd-Frank Act. Two of the biggest anxieties these days are the rules on “qualified mortgages” and “qualified residential mortgages” being developed by federal regulators. Another is the CFPB project to integrate Truth in Lending Act/Real Estate Settlement Procedures Act mortgage disclosures. In addition to the fact that none of these rules have been made final, there’s a good deal of angst over how they...