Bank and thrift holdings of first-lien mortgages increased by 3.6 percent in the third quarter of 2012 compared with the third quarter of 2011, according to a new ranking and analysis by Inside Nonconforming Markets. The growth, outpacing portfolio runoff and an overall decline in mortgage debt outstanding, is tied to non-agency mortgages as well as agency-eligible loans being retained by banks. Industry participants are divided on whether the first-lien holdings will ... [Includes one data chart]

The guaranty fees charged by Fannie Mae and Freddie Mac are close to hitting a tipping point where non-agency mortgage-backed security issuance will be the more economic execution for new originations, according to some non-agency participants. “If the non-agency pricing is improving and the GSE pricing is worsening, at some point you’re going to hit a tipping point,” Luke Scolastico, a vice president at Credit Suisse, said last week at a panel discussion hosted by the American Securitization Forum ...

Investors in non-agency mortgage-backed securities are pushing back against a loan modification program proposed by the Obama administration that would target underwater loans backing their investments. “Quite simply, investors have already been significantly harmed by the poor performance of many of the mortgage loans in non-agency MBS, and the Market Rate Modification proposal would only increase the severity of losses suffered by institutional investors,” Tom Deutsch ...

The Consumer Financial Protection Bureau is considering expanding the size and scope of the exemption on its pending final rule regarding servicing practices, according to agency officials. The CFPB also downplayed concerns that the servicing rule will expand loss-mitigation options beyond those approved by mortgage investors. During a webinar this week hosted by Inside Mortgage Finance, Mitchell Hochberg, regulatory counsel at the CFPB, said the agency is “very heavily” thinking about ...

At least two nonprime industry veterans are out in the market actively trying to raise funds to start lending operations, according to interviews conducted by Inside Nonconforming Markets. Whether they will be successful is another matter. Jon Daurio, a founder and former top executive at the now defunct Encore Capital, is trying to raise $250 million and hopes to have much of the work tied to his capital raise completed by the end of the first quarter of 2013. Daurio has been working on raising money ...

Damage from Hurricane Sandy will have a negligible impact on mortgages in outstanding non-agency mortgage-backed securities, according to a new analysis by Opera Solutions. The servicing analytics provider said 45 non-agency MBS deals with $19.6 billion in outstanding balance have mortgages with exposure to significant damage from the storm and the likely affected balance is $6.0 billion. “Based on a detailed analysis of each portion of affected ZIP codes, the ultimate exposure is much lower ... [Includes four briefs]

The CFPB has proposed allowing banks, credit unions and other financial services companies to test new consumer disclosures on a case-by-case basis. The bureau would have to approve of the disclosure programs ahead of time. Under the proposal, the CFPB would exempt certain qualifying individual companies for a limited time from existing federal disclosure laws so they can research and test “informative, cost-effective disclosures.” The participating companies would then share their results with the agency so it...

The CFPB has a pretty full plate digesting hundreds of comments related to its mortgage servicing proposed rule, making it difficult to predict how the final product might end up as it presses to balance the industry’s legitimate concerns with the regulatory mandates of the Dodd-Frank Wall Street Reform and Consumer Protection Act. During a recent webinar sponsored by Inside Mortgage Finance, an affiliated publication, Mitchell Hochberg, counsel in the division of research, markets and regulations at the CFPB...

There was a pronounced difference of opinion between a leading industry attorney and a top official from the CFPB at a recent event over whether the bureau’s proposed mortgage servicing standards create a private right of action that could bring any foreclosure proceeding to a grinding halt. During a webinar sponsored by Inside Mortgage Finance, Larry Platt, financial services practice area leader with the law firm of K&L Gates, said, “The consequence of these regulations is to create a federal cause of action that...

The FHA this week announced additional measures to restore the financial health of its insurance fund and better protect consumers, including tighter underwriting on new FHA loans and elimination of a widely used standard fixed-rate reverse mortgage product. Acting FHA Commissioner Carol Galante unveiled the latest structural reforms in a Dec. 18 letter to Sen. Bob Corker, R-TN, who has repeatedly expressed concerns over the slow pace of reforms at FHA. The reforms address issues the senator raised with Department of Housing and Urban Development Secretary Shaun Donovan at a Dec. 6 Senate Banking, Housing and Urban Affairs Committee hearing on ...