The Securities and Exchange Commission this week proposed a new method for determining whether non-agency MBS will enjoy certain federal exemptions without relying on credit ratings. The SEC and other agencies in recent years have been gradually eliminating references to credit ratings in a variety of regulations affecting...

Representatives of the securitization industry are raising concerns that some key aspects of the risk-retention proposed rule that federal bank regulators are working on might bring the secondary mortgage market to a grinding halt, and are urging regulators to remove or clarify some proposals. Much of the concern has to do with...

Bank of America successfully turned back a class-action lawsuit filed by disgruntled investors in Countrywide MBS, but new cases stemming from the collapse of the non-agency mortgage market continue to be filed. According to Judge Mariana Pfaelzer’s dismissal order in the U.S. District Court of the Central District of California, BofA and its...

Fannie Mae and Freddie Mac in 2010 continued to take a beating from their MBS guarantees on high-risk mortgages, but the performance of these loans did improve somewhat last year, according to a new report from the Federal Housing Finance Agency. Since the beginning of 2008, the two government-sponsored enterprises have burned through...

Federal banking regulators extended the comment period for their controversial risk-retention proposal to Aug.1 after meeting with the American Bankers Association, the Mortgage Bankers Association, the National Association of Realtors and consumer groups last Thursday. The proposed rule generally would require sponsors of asset-backed securities to hold on to a minimum 5 percent of the credit risk of the assets underlying their securities. Among the most controversial aspects of the proposal is its...

The chairman of the House Budget Committee said this week that a full and transparent accounting of the cost to taxpayers of the federal takeover of Fannie Mae and Freddie Mac is the first, best step to determine how to wind down the two government-sponsored enterprises.During a hearing on taxpayer exposure in the housing markets relating to Fannie, Freddie and the FHA, Rep. Paul Ryan, R-WI, took aim at the White House’s plan for a post-GSE mortgage market. “While the Treasury Department has put forward a ‘framework for reform,’ the Obama administration still...

The Financial Industry Regulatory Authority last week fined Credit Suisse Securities and Merrill Lynch for alleged misrepresentation of delinquency data and inadequate supervision of subprime residential MBS that ended up misleading investors about the performance of pool assets. “FINRA found that in 2006, Credit Suisse misrepresented the historical delinquency rates for 21 subprime RMBS it underwrote and sold,” the independent regulator said in a statement. “Although Credit Suisse knew...

New issuance in the agency MBS market declined again in May, falling to the lowest monthly production level since the depths of the global liquidity crisis over two years ago. According to a new Inside MBS & ABS analysis and ranking, Fannie Mae, Freddie Mac and Gin-nie Mae issued a combined total of $71.05 billion of new single-family MBS last month, a decline of 7.7 percent from April’s production. May marked the fifth consecutive decline in monthly agency MBS volume since last year’s refinance boom peaked in December. It was also the lowest monthly production level since... [Includes one data chart]

Fannie Mae this week nearly doubled the total output of the non-agency MBS market in 2011 with a new REMIC backed by FHA home-equity conversion mortgages. The government-sponsored enterprise provided a guaranty wrap on Mortgage Equity Conversion Asset Trust 2011-1, a $9.26 billion transaction backed by HECM loans originated and serviced by Bank of America. Through the first four months of the year, total non-agency MBS production came to just $9.98 billion – most of which were re-securitizations. Fannie said it intends to...

A revival in the non-agency MBS market may still be years away because of competing and seemingly contradictory government objectives for housing finance, according to a new analysis from Standard & Poor’s. The government is doing many things all at once to resuscitate the housing market and hasten economic recovery, but those efforts may actually place recovery on a slow track, said Erkan Erturk, an S&P research analyst and author of the report. Erturk concludes that the housing downturn drove the securitization market away from...