During the past three years, the GSEs have steadily increased their commercial mortgage-backed security issuance, assuming a role of dominance that private investment banks once held, concluded a recent report by Standard & Poor’s Ratings Services.

Fannie Mae and Freddie Mac loan modification and overall loss mitigation activity declined again in the second quarter, driven by decreases in completed loan mods and forbearance plans and continuing a downward trend begun a year ago, a new analysis of data from the Federal Housing Finance Agency by Inside The GSEs finds. Total loss mitigation activity – total home retention efforts and foreclosure alternatives combined – slipped 1.5 percent in the second quarter of the year to 246,879 and was down 34.3 percent from year ago levels. Our analysis was based on the FHFA’s Second Quarter 2011 Foreclosure Prevention & Refinance Report.

Mortgage lenders and servicers with large portfolios of seriously delinquent home loans have turned to “liquidating trust” structures as a financing alternative – with good results, according to credit rating agency DBRS. So far, the performance of six nonperforming loan securitizations with 14 outstanding tranches rated by DBRS has been stable and largely within expectations at the time of rating, said Quincy Tang, the rating agency’s senior vice president of structured finance. As of Sept. 6, all rated classes of one transaction (Residential Loan Trust 2008-2) have been paid in full, said Tang. The Class A notes in...

The official watchdog of the Federal Housing Finance Agency says it will monitor and continuously assess the performance of its audits, evaluations and investigations of the Finance Agency over the next couple of years.The FHFA’s Office of Inspector General, which released its new strategic plan for the 2012-2014 fiscal years last week, said it has developed four core strategic performance goals: adding value, operating with integrity, promoting productivity and valuing employees.

With the mortgage finance industry in turbulence and a fast-changing regulatory landscape, banks have been forced to reevaluate how they optimize processes and become more cost-efficient, making “operational certainty the need of the hour,” according to an expert at a webinar held this week by NelsonHall. The market is seeing an increase in defaults but a decrease in mortgage originations, noted Sandip Sahni, practice head of business process services at Tata Consultancy Services. This has led to mortgage providers having to deal with fluctuations in volume and costs, and in response, service providers are creating more...

The roiling mortgage lending marketplace continues to present some lenders with even more challenges that force the adoption of coping strategies to cut their losses, while opening up fresh opportunities for others to deploy the next phase in their long-term strategic plans. loanDepot.com, based in Foothill Ranch, CA, the latest start-up by the founders of E*TRADE Mortgage and LendingTree Loans, falls into the latter category, recently launching its new national expansion plan with the opening of a new origination center in Franklin, TN, just outside of Nashville. Company President Tomo Yebisu said Franklin was chosen because of...

For a growing number of lenders, the decision to adopt a mortgage pipeline hedging strategy is fast becoming less of an innovative option and more about adapting to a business necessity to stay ahead of the curve, according to a white paper by MCT Trading Inc. MCT, a San Diego-based risk management and advisory services company, details in its recently issued paper the intricacies for mortgage bankers considering the switch from a best efforts delivery platform to a mandatory delivery model. "There are a number of different pitfalls lenders need to be cognizant of when making the move from best efforts loan sales to...

State regulators are gradually working through the pile of licensing applications submitted by mortgage companies and loan originators. The total number of unique entities holding state licenses increased 7.2 percent during the second quarter, reaching 140,421, according to an Inside Mortgage Trends analysis of data from the National Mortgage Licensing System. The vast majority of those licenses (76 percent) are held by individual loan officers. Regulators still had some 35,024 licensing applications pending at the end of June, but that was down 23 percent from the previous quarter. And the number of new applications submitted during...

Securitization participants and financial services providers flatly rejected a proposal to create an independent federal board that would assign credit rating agencies to initially rate non-agency MBS, ABS and other structured finance transactions. In separate comments, two industry trade groups and Fitch Rating Services opposed the proposal, which is being studied by the Securities and Exchange Commission. The Dodd-Frank Act instructs the SEC to study the concept and report back to Congress by July 2012 with its recommendations for regulatory or statutory changes. The idea of establishing a board to oversee credit rating agencies and address...

Mortgage securitization rates remained at record levels through the first half of 2011, reflecting a sharp decline in new primary market production and a surge of agency issuance early in the year. A new Inside MBS & ABS analysis reveals that mortgage securitization activity in the first half of 2011 equaled 96.0 percent of loans originated during the same period. That compares to an 84.9 percent securitization rate for all of 2010 and an 85.6 percent rate – the record high – back in 2009. Because it can take weeks or even months before a newly originated mortgage hits the capital markets as collateral backing an MBS, there is a significant slippage between... [Includes one data chart]