Despite lower mortgage rates, MBS prepayment speeds slowed across the board in December, particularly for the recent low coupons, while speeds for higher coupons were up slightly, according to securitization analysts. Researchers varied slightly in their estimates, saying speeds for 30-year Fannie Mae securities slowed 2-6 conditional prepayment rate for the recent low coupons (3.5-4.5 percent from 2011 and 2010). Barclays Capital analysts attributed the slowdown to reduced refinancing activity during the December holiday season. The weighted average CPR for all Fannie Mae MBS declined to...

Fannie Mae and Freddie Mac issued $261.59 billion in single-family mortgage-backed securities during the fourth quarter of 2011, a booming 47.6 percent improvement from a modest third quarter that followed two straight quarterly declines during the first six months of 2011.The recently completed October-December cycle represented the highest quarterly production level of the year, but it still came up 21.2 percent short of the volume generated during the fourth quarter of 2010.For the year, GSE single-family securitizations were down 12.7 percent from the volume generated during 2010.

The Federal Home Loan Banks continue to show an investment preference for Fannie Mae and Freddie Mac mortgage-backed securities during the third quarter of 2011, posting a modest increase from the previous quarter, according to a new analysis by Inside The GSEs based on data from the Federal Housing Finance Agency.Ginnie Mae securities, meanwhile, remained popular within the FHLBank system during the three-month period ending Sept. 30, 2011.GSE MBS accounted for 68.9 percent of combined FHLBank MBS portfolios, up 1.7 percent from the second quarter of 2011. The Finance Agency’s data do not separately break out Fannie and Freddie volume or share.

It started last week with an unsolicited white paper outlining “a framework for thinking about certain issues and tradeoffs that policymakers might consider” and blossomed into a coordinated assault by the Federal Reserve on the housing slump that won’t go away. Having purchased over $1 trillion in mortgage securities in an effort to drive mortgage interest rates to all-time lows, the Fed appears to be using its speechmaking and paper-writing powers to try to get the rest of Washington moving on housing. In addition to the policy paper, Fed officials in the past week have made three speeches on...

The securitization market produced $1.182 trillion of new residential MBS in 2011, a sharp 16.6 percent decline from the year before, according to a new Inside MBS & ABS analysis. Despite a strong finish in the fourth quarter, when MBS production rose 33.8 percent from the previous three-month period, mortgage securitization activity fell for the second year in a row and reached the lowest annual output in over a decade. The non-mortgage ABS market was relatively stronger. Total issuance for the year came to $126.8 billion, a 15.7 percent increase over 2010. Most of the...(Includes one data chart)

The Federal Housing Finance Agency’s announcement last week that Fannie Mae and Freddie Mac will increase their guarantee fees on new single-family MBS is likely just the first step in a progression of fee hikes over the next two years, MBS analysts predict. The across-the-board 10 basis point increase in guarantee fees for single-family MBS will take effect April 1, according to announcements by the two government-sponsored enterprises this week. The fee hike implements provisions in the Temporary Payroll Tax Cut Continuation Act of 2011, H.R. 3765, passed by Congress and signed by...

The mortgage securitization and servicing industries say proposed changes to the servicing compensation model for Fannie Mae and Freddie Mac securities would have a negative effect on liquidity in the to-be-announced market, hurt investors in agency MBS and increase the cost of mortgage credit for borrowers. The Federal Housing Finance Agency released a discussion paper last fall that outlined two potential new approaches to servicing compensation: a fee-for-service approach favored by the two government-sponsored enterprises, and a reserve account approach developed by lender...

Gibbs & Brun, the Houston-based law firm that spearheaded a massive investor lawsuit against Bank of America, has drawn a bead on Wells Fargo. The company announced this week that its non-agency MBS investor clients have asked two trustees – U.S. Bank and HSBC – to investigate whether ineligible mortgages were pooled in some $19 billion of Alt A and jumbo MBS issued by Wells Fargo between 2005 and 2007. Some 48 securitization trusts are covered by the action, and Gibbs & Brun said it represented investors who collectively held over a quarter of the voting rights in those trusts. “Clients...

MBS issued or guaranteed by the U.S. government will continue to maintain a zero-risk weighting under the Federal Reserve’s proposed supervisory rules for large bank holding companies, but that won’t necessarily include Fannie Mae or Freddie Mac MBS. The Fed proposal includes a wide range of issues such as capital, liquidity, credit exposure, stress testing, risk management and early remediation. It applies to bank holding companies with assets of $50 billion or more and non-bank institutions that could pose systemic risk to the financial system. The proposal reflects substantially all of the...

Issuance of non-agency mortgage-backed securities supported by newly originated mortgages will remain muted in 2012, according to industry analysts. A number of factors have combined to limit non-agency MBS issuance, including economic issues, regulatory issues and uncertainty regarding reform of the government-sponsored enterprises. Only two non-agency securities backed by new loans were issued last year – a total of $665.2 million in jumbo MBS from Redwood Trust. “The trickle of deals should continue into 2012,” according to analysts ...