Banks and thrifts held a record $1.491 trillion of residential MBS in portfolio as of the end of June, according to a new Inside MBS & ABS analysis and ranking of call report data. That was up 1.6 percent from the end of the second quarter and marked the fourth consecutive period of growth in the industry’s MBS holdings. Banks and thrifts owned about 22.8 percent of the estimated $6.535 trillion of MBS outstanding at the end of the second quarter. All the growth came in investments in agency structured finance transactions, mostly REMICs. Bank and thrift holdings of agency REMICs jumped 8.6 percent in the second quarter to $459.9 billion, or 30.8 percent of... [Includes two data charts]

Even as the MBS market warily watches reports that the White House is considering mortgage refinancing as part of a broad effort to stimulate the housing industry and the economy at large, analysts offered mixed assessments of the effectiveness of the most likely option. Industry observers say the most likely scenario would involve a change in the pricing policies of Fannie Mae and Freddie Mac, a move that would not require...

The American Securitization Forum this week announced a credit risk-retention model which, it claims, imposes requirements more powerful than those proposed by federal regulators. The “ASF Model Residential Mortgage-Backed Securities Principles” spell out steps for investigating, resolving and enforcing remedies in connection with representations and warranties in non-agency MBS transactions involving newly originated mortgages. Essentially, the ASF model requires...

The Securities and Exchange Commission this week asked for public comment as it begins to reconsider whether mortgage real estate investment trusts and other mortgage-related pools that acquire mortgages and mortgage-related instruments should remain exempt from the requirements of the Investment Company Act. The SEC said it is concerned that some mortgage-related pools, as pooled investment vehicles, may raise...

The Securities and Exchange Commission is weighing possible changes to a key rule that allows MBS and ABS issuers to avoid being classified as investment companies. Although the agency’s primary focus is on whether it should ditch existing references in the exemption to credit ratings, officials are also looking at other potential changes. Rule 3a-7 was promulgated nearly 20 years ago so that asset-backed securities issuers would not be classified...

The sharp drop in mortgage origination activity during the second quarter had a bigger impact on retail loan production, according to a new Inside Mortgage Finance ranking and analysis. But a much bigger change lies ahead as Bank of America this week announced plans to get out of the wholesale correspondent market. The company was the second largest correspondent lender in the industry during the first half of 2011, acquiring $49.23 billion in production. That represented a significant 8.3 percent of total home mortgage origination over the first six months of the year and nearly a quarter of industry-wide production in the correspondent channel. In a statement, BofA said...[Includes six data charts]

After declining steadily since the end of 2009, overall mortgage delinquency rates spiked higher during the second quarter of 2011, according to the Inside Mortgage Finance Large Servicer Delinquency Index. The index, which covers all loans in default status plus foreclosure and is not seasonally adjusted, rose from 10.31 percent at the end of March to 10.58 percent at the midway point in the year. All of the increase came in the…

Only about 18 of the 247 “high cost” metropolitan markets will avoid seeing their FHA loan limits lowered at the end of this month, when the emergency loan-limit adjustments for the FHA, Fannie Mae and Freddie Mac are set to expire, according to a new analysis by Inside Mortgage Finance. All 24 metro markets that now have loan limits of $729,750 (or higher in Hawaii) will see their limits dropped to at least $625,500, and some of these areas in California will see...

Law enforcement and regulatory officials may be undermining their odds of reaching a foreclosure-practices settlement with the mortgage industry because they’re grasping for too much, too soon, letting the perfect become the enemy of the good, according to some political and legal observers. Attorneys general in all 50 states and the Department of Justice and other federal agencies continue to investigate alleged irregularities in the foreclosure practices of top servicers, including Bank of America, which is...

Fannie Mae and Freddie Mac last week both “de-listed” PMI Mortgage Insurance Co. as an eligible private MI, a further blow to a private MI business that has been driven to the brink by the housing market collapse. Republic Mortgage Insurance Corp. was forced to stop writing new business this week as North Carolina regulators declined to extend a waiver of risk-capital ratios under which it had remained in the market. Together, PMI and RMIC accounted...