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.
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...
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...
The Federal Housing Finance Agency’s lawsuit against UBS Americas and, by extension, more than a dozen other big banks, in connection with non-agency MBS purchased by Fannie Mae and Freddie Mac will continue after a federal appeals court flatly denied UBS’ bid to dismiss the case. The Second Circuit Court of Appeals upheld a lower court ruling that denied UBS’ motion to dismiss the FHFA’s suit as time barred. In the summer of 2011, the FHFA filed 18 lawsuits in Manhattan federal court against UBS and other big banks on behalf of the GSEs, alleging violations of the federal Securities Act of 1933 for approximately $200 billion in MBS sold to Fannie and Freddie in the years prior to the mortgage market meltdown. The UBS appeal argument largely revolves...
Over the past five years, lender captives paid $706 million in losses. Most of these captives were domiciled in the U.S. and sponsored by mortgage lenders, receiving $2.92 billion in ceded premiums.
Primary market originators and due diligence providers say the elusive market in private placement MBS deals has been gaining strength this year. “We’re seeing three to five private deals a month,” said Jeff Taylor, managing partner of Digital Risk, a New York-based risk management and due diligence firm. As for the underlying product, it’s across the board, he added. “It can be jumbo, nonperforming, and re-performing.” But the deals are also much smaller than the rapidly growing public MBS deals. Digital Risk, which conducts due diligence reviews on the underlying collateral, said...
Closing issues are the most significant concern that makes real estate agents reluctant to recommend lenders to buyers, according to a new survey by Campbell Surveys and Inside Mortgage Finance Publications. Real estate agents control or influence 45 percent of homebuyer decisions on lender choice, according to the survey. Insight from real estate agents could be key as the mortgage market shifts from a focus on refinances to an emphasis on purchase mortgages. Real estate agents prefer...
Consumer advocates are calling on the Obama administration to extend the Home Affordable Modification Program beyond the end of this year. While HAMP is far from meeting performance goals set by the administration, consumer advocates claim the program is favorable to proprietary loan modifications completed by servicers. “Extending the HAMP program for several years – or, at a minimum, for one year – would greatly assist the housing market in general and neighborhoods most affected by high foreclosure rates in particular by helping more homeowners avoid foreclosure,” 36 consumer groups, including the Center for Responsible Lending and the National Consumer Law Center, said in a recent letter to Jacob Lew, secretary of the Treasury Department. In January 2012, the Obama administration announced...
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