The average daily trading volume in agency MBS climbed to $201.4 billion in February, the best reading in nine months and a sign that investors will still flock to government-backed products in times of uncertainty, especially extreme uncertainty. Late this week, market watchers expressed their concerns about the terrorist bombings in Belgium as well as continued worries about China’s slowing economy and sagging oil prices. In short order, they piled into MBS issued by Fannie Mae, Freddie Mac and Ginnie Mae. Barry Habib, who runs MBS Highway, a rate-lock service, told...

This week, the Supreme Court of the United States invited the U.S. Solicitor General to file a brief “expressing the views of the United States” in the Madden v. Midland Funding case, indicating the court is seriously considering taking the case. Assuming the Solicitor General obliges the high court, attorneys at the Pepper Hamilton law firm believe the brief likely will articulate the views of the primary banking agencies on whether SCOTUS should grant certiorari, along with their relative positions on the issues in the case. Madden involves...

Standard & Poor’s kept its position as the top provider of ratings for newly issued non-mortgage ABS last year, although the volume of deals the company rated fell 10.1 percent from 2014, according to a new Inside MBS & ABS analysis. S&P rated ABS bonds totaling $106.86 billion in new issuance in 2015, or 61.5 percent of deals for which rating information was available. That was down slightly from its league-leading 64.1 percent share of the rated 2014 ABS market. The company’s strong suits were credit card ABS and deals backed by vehicle loans and leases. Fitch Ratings finished...[Includes two data tables]

Five mortgage industry veterans – including two who worked in the Obama White House – this week floated a new plan aimed at preserving the government guaranty on conventional MBS and ending, once and for all, the uncertainly plaguing the secondary market. In a new white paper entitled “A More Promising Road to GSE Reform,” the authors aim to preserve the government-backed MBS market while merging Fannie Mae and Freddie Mac into a new institution called the National Mortgage Reinsurance Corp. But the proposal might be...

A federal appeals court in Washington, DC, ordered the transfer of a case challenging risk-retention rules to the district court because the petitioner sought review of an agency action “in the wrong court.” Writing for the majority, Judge Janice Brown of the U.S. Court of Appeals for the District of Columbia shifted the Loan Syndications and Trading Association’s (LSTA) challenge to the lower court for lack of statutory authorization to review the rule. “As it turns out, LSTA’s challenge on the merits will have to wait,” she wrote. Jointly prescribed by the Securities and Exchange Commission, Federal Reserve Board, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency, the credit risk-retention regulations required...

Proposed standards drafted by due diligence providers for how to handle TRID mortgage disclosure issues could be finalized as soon as next week, according to the Structured Finance Industry Group. TRID compliance violations uncovered by third-party due diligence firms are seen as a major contributor to the slowdown in non-agency mortgage-backed security issuance since the Consumer Financial Protection Bureau’s TRID rule took effect in October. And some have suggested ...

JPMorgan Chase is set to issue a $1.89 billion non-agency mortgage-backed security stocked with prime conforming mortgages and jumbo loans. The deal will allow Chase to sell credit risk on some of the mortgages the bank has originated and retained even though the loans were eligible for sale to the government-sponsored enterprises. Chase Mortgage Trust 2016-1 received preliminary AAA ratings from Fitch Ratings and Moody’s Investors Service last week ...

Issuance in the jumbo mortgage-backed securities market has nearly stopped in the first quarter of 2016, but not all issuers are ready to abandon the sector. “The securitization market has been slow to re-open but there’s a lot of optionality to that business to the extent that the banks’ lust for mortgages on their balance sheets changes in different interest rate environments,” said William Roth, CIO of Two Harbors Investment. “The ability for us to grow that business dramatically is there ...

A proposal this week for how to reform the government-sponsored enterprises included a provision that would allow for an adjustment of the agency share of mortgage financing via loan limits. The loan limit proposal would differ from current practices where the Federal Housing Finance Agency makes increases to the conforming loan limit based on home price trends. The proposal, “A More Promising Road to GSE Reform,” was authored by Jim Parrott, Lewis Ranieri ...

CORRECTION: An update to a story in the March 11 issue of Inside Nonconforming Markets with the headline “Banks’ First-Lien Holdings Increase in 2015” is available at http://www.insidemortgagefinance.com. The story and accompanying ranking were revised because the ranking initially showed numbers from the second quarter of 2015 for the fourth quarter of 2014. Five Oaks Investment said it recently determined ... [Includes five briefs]