RAIT Financial Trust, Philadelphia, is funding roughly $60 million to $70 million a quarter in multifamily and low-balance commercial loans, product that is winding up in MBS issued by Barclays Capital and Citigroup Securities. According to Jason Stewart, an analyst with Compass Point Research & Trading LLC, the company also has a line of credit from Credit Suisse, and is working on a $100 million to $150 million deal that could be ready by the third quarter. A publicly traded real estate investment trust, RAIT is...

Credit quality for global structured finance securities fell for the sixth consecutive year in 2012, again led by U.S. residential MBS, according to Standard & Poor’s. Looking at downgrade and default trends from 1978 through 2012, S&P found that downgrades were less pervasive last year than in previous years. Nonetheless, the mild but slow global economic recovery continues to hurt the performance of MBS and other structured finance securities for the sixth straight year. Its lagging effect means that credit quality may continue to see moderate deterioration, the rating agency said. While poor credit quality appears...

Wells Fargo and JPMorgan Chase continue to post strong residential finance profits, but there is a growing worry that the "mortgage party" may be drawing to a close.

The unrelenting campaign by liberal Democrats and progressive activists to depose the Federal Housing Finance Agency’s acting director could backfire by making him politically untouchable, while the badgering directed at the Obama administration threatens to alienate the very man they seek to convince to act in their favor, according to industry observers. According to a memo released late this week that was prepared by New York Attorney General Eric Schneiderman’s legal team, President Obama has the power to replace FHFA Acting Director Edward DeMarco without congressional approval. “We conclude that the president has the authority to remove the acting director at will, and there is a strong argument that he has the authority to designate a new acting director, although the answer to that question is less certain,” noted Schneiderman’s memo.

Fannie Mae’s and Freddie Mac’s recent, unambiguous return to profitability will diminish an already waning urgency among Capitol Hill lawmakers to proceed with legislative GSE reform as the companies’ profits flow into the U.S. Treasury by the billions, industry experts warn. Fannie announced last week that the GSE expects to remain profitable “for the foreseeable future” after posting record-shattering quarterly and yearly earnings for the period ending Dec. 31, 2012. In the wake of Fannie’s announcement, the White House this week said that from January 2013 to the end of 2023 the two GSEs could send $183.3 billion to the Treasury.

Freddie Mac this week hired former Chase Home Finance CEO David Lowman to head its single-family division, where he will help shape the GSE’s policies and programs that affect seller/servicers. Lowman will officially take the post May 20, the company said. Lowman is joining Freddie at a time of rapidly improving earnings. But he also must deal with several key issues facing seller/servicers, namely tight underwriting standards, changing delivery requirements and continued griping over buybacks. One current colleague of Lowman’s amusingly quipped: “I wonder what he thinks about buybacks now?”

The Home Affordable Refinance Program will continue for another two years as the number of HARP refis for deeply underwater borrowers continued to represent a “substantial portion” of total HARP volume in January, the Federal Housing Finance Agency announced this week. HARP had been scheduled to expire at the end of this year before the FHFA’s directive to Fannie Mae and Freddie Mac to extend the program through Dec. 31, 2015. “FHFA determined that extending the program now will provide additional opportunities to refinance, give clear guidance to lenders, and reduce losses for Fannie Mae, Freddie Mac and taxpayers,” said the Finance Agency.

Although Fannie Mae posted stellar – and record – earnings last week, the best is yet to come thanks to a $58.9 billion allowance for “deferred tax assets” the GSE is likely to capture when it releases earnings for the first quarter of 2013, a number that will be revealed some time in May. In its 10-K filing for 2012, Fannie did not absolutely say it will move to capture the DTA allowance in the first quarter, but notes that “if and when the valuation allowance is released, it will be included as income.” The GSE said it did not take the DTA in 2012 because it has not been steadily profitable for a long enough period of time. It noted that the decision was “complicated.”

GSE single-family securitizations rose just under 1.0 percent during the first three months of 2013, compared to the previous quarter, yet it was the single highest level since the second quarter of 2009 as mortgage lenders delivered $355.8 billion in home loans to Fannie Mae’s and Freddie Mac’s securitization programs, according to a new Inside The GSEs analysis. Fannie and Freddie activity peaked in January with GSE volume declining slightly in both February and March. January’s huge increase compared to the previous month may reflect lenders’ intent to hold secondary market sales until the new GSE representation and warranties went into effect on Jan. 1.

The Federal Housing Finance Agency’s oversight of the 12 Federal Home Loan Banks’ growing amount of advances to insurance companies should be improved to include tighter coordination with state regulatory authorities, according to the agency’s official watchdog. The FHFA Office of Inspector General’s recent audit noted FHLBank advances to insurance company members have dramatically increased even as overall advances have declined in recent years. From 2005 through 2012, the volume of FHLBank advances to insurance companies increased “over fourfold” from $11.5 billion to $52.4 billion.