As Democrats in Congress worked on reforms after the financial crisis, issuers of MBS and ABS repeatedly warned that regulatory uncertainty would hurt the market. With Republicans now looking to roll back parts of the Dodd-Frank Act, industry participants are pushing for risk-retention requirements to remain in place, again citing the potential impact of regulatory uncertainty. “It’s foolish to think that we would try to tear it all down,” said Howard Kaplan, a partner at the law firm of Deloitte & Touche, during this week’s SFIG Vegas conference. Among many other changes, the CHOICE Act from Rep. Jeb Hensarling, R-TX, would repeal...

CFPB analyst Megan Thibos reminds consumers that, “During the foreclosure crisis, many borrowers with subprime mortgages faced sharply increased mortgage payments and were unable to make those payments.”

Fannie Mae, Freddie Mac and Ginnie Mae produced a combined $96.70 billion of new single-family MBS during February, a sharp 27.9 percent decline from the previous month, according to a new ranking and analysis by Inside MBS & ABS. February’s issuance was the lowest monthly volume since March of last year. All three agencies saw substantial declines in gross MBS issuance, led by Fannie’s 31.9 percent drop. Still, agency MBS production in the first two months of 2017 was...[Includes two data tables]

Secondary market gains headed south in the final three months of 2016, and so far it’s not looking too bright for the first quarter of 2017, which has about four weeks to go before it’s a wrap. According to a new report from Piper Jaffray, gain-on-sale margins declined to an average of 94 basis points in the fourth quarter, compared to a more robust 106 bps in the third. Piper said GOS is currently tracking at about 88 basis points. The research firm’s coverage universe includes...

Late last month, Fairholme Capital chief Bruce Berkowitz sent out a press release reassuring his shareholders that the hedge fund’s bet on owning the junior preferred stock of Fannie Mae and Freddie Mac will prevail, eventually. Among other things, the veteran equity-fund manager extolled the government-sponsored enterprises’ massive fourth quarter profits of almost $10 billion, called them “indispensable” to the mortgage insurance industry and reminded readers they continue to fulfill “their historic role of insuring adequate levels of liquidity to lenders of all sizes.” He also mentioned...

Fannie Mae announced its second deal using credit insurance risk transfer on the front end of the transaction. Most of the government-sponsored enerprise’s CIRT transactions have involved insurance contracts on pools of loans that have already been securitized. The new front-end CIRT deal will shift a portion of the credit risk on about $15 billion worth of single-family loans, significantly larger than Fannie’s first test of the structure back in October, which involved about $3.7 billion of single-family loans. This CIRT, like the first one, will be...

Go figure: An "app" company called Snap that may never make a nickel is now worth more than Fannie Mae and Freddie Mac...

Most major jumbo servicers increased their portfolios in 2016, according to a new ranking and analysis by Inside Nonconforming Markets. A group of 30 servicers handled an estimated $921.10 billion in jumbo mortgages as of the end of the year, up 8.7 percent from the end of 2015. Wells Fargo was the top jumbo servicer, with a $279.97 billion portfolio at yearend. While Wells steadily built up its jumbo servicing throughout the year, it lost some ... [Includes one data chart]

The FHA is nearing full implementation of a new loan review system (LRS) for managing FHA’s Title II single-family quality-control processes. No specific implementation date has been set but it could be sometime in the second quarter, the agency said. The LRS builds on FHA’s efforts to align the documentation of loan-review results. In addition, it incorporates the Single-Family Housing Loan Quality Assessment Methodology or defect taxonomy.The FHA said the new system would not be used to manage any aspect of the agency’s standard loan origination or endorsement processes. Rather, it would be used to review of test cases submitted by lenders seeking unconditional direct-endorsement authority. It would be used as well for various post-endorsement reviews of forward single-family loans. After the ...

Relators in a False Claims Act lawsuit must allege misconduct that has not already been publicly disclosed or risk dismissal of their qui tam claims, according to the U.S. Appeals Court for the Sixth Circuit. In U.S. ex rel. Advocates for Basic Legal Equality, Inc. v. U.S. Bank, the court ruled that whistleblowers cannot raise “substantially the same allegations or transactions” that have been previously alleged in an action or claim and publicly disclosed. The qui tam plaintiff must be the original source of the allegations, the court said. Only certain disclosures trigger the prohibition, the court noted. They include disclosures “in a federal criminal, civil or administrative hearing in which the government or its agent is a party,” or in a Government Accountability Office or other federal report, hearing, audit or investigation, or from the news media. n this case, the relator/plaintiff alleged that U.S. Bank initiated foreclosure proceedings ...