Standard & Poor’s said it is working with the Securities and Exchange Commission to address issues raised by the enforcement staff in connection with botched ratings of several commercial MBS transactions in 2011. A spokesperson for S&P said the rating agency and its parent company, McGraw Hill Financial Inc., are cooperating with the SEC after receipt of a “Wells Notice” last week indicating both companies may soon be the target of a regulatory enforcement action. The SEC notice is...

Mortgage buybacks and indemnifications may be off their peak in terms of volume, but they are widely expected to continue for the foreseeable future, industry experts said this week. But the good news for the industry is that there are a variety of defenses and coping strategies available, depending on the particulars of a given situation. Amanda Raines, a partner in the Washington, DC, office of the BuckleySandler law firm, told participants of an Inside Mortgage Finance webinar this week that more buybacks are definitely on the way. “The Department of Justice is still making financial fraud a priority,” she said. Raines noted...

Next week, Nationstar Mortgage reports its second quarter results. If the company misses the targets set by investment bankers, it could be a blood bath…

Efforts to reform the non-agency market may be gathering momentum as the Structured Finance Industry Group is set to reveal its preliminary recommendations for changes to non-agency mortgage-backed securities and comments on the sector’s reform are due to the Treasury Department shortly. Industry participants have plenty of suggestions for how to fix the market, but any revival looks to be years away. On Aug. 4, the SFIG will release “green papers” as part of its Project RMBS 3.0 initiative ...

Two Harbors Investment is preparing to issue a $267.67 million jumbo mortgage-backed security, according to a preliminary term sheet obtained by Inside Nonconforming Markets. The deal is scheduled to close Aug. 5, nearly a year after the only other jumbo MBS issued by Two Harbors. Agate Bay Mortgage Trust 2014-1 is backed by 30-year fixed-rate mortgages from a variety of lenders, led by RPM Mortgage with a 12.8 percent share, New York Community Bank ...

While banks have plenty of capacity to retain jumbo mortgages in portfolio, the top two contributors to jumbo mortgage-backed securities issued in the second quarter of 2014 were actually banks, according to a new ranking and analysis by Inside Nonconforming Markets. First Republic Bank and JPMorgan Chase were the top two contributors to the scant four jumbo MBS during the quarter. And since the start of 2013, three of the top five ... [Includes one data chart]

The risk-retention standard federal regulators are leaning toward establishing isn’t what was intended under the Dodd-Frank Act, according to one of the main authors of the DFA. Barney Frank, a former Democrat congressman from Massachusetts, said aligning the definition for qualified mortgages with the definition for qualified residential mortgages would be a “grave error.” The DFA required federal regulators to establish standards for QRMs ...

Statebridge Company has received a mid-tier rating for subservicing mortgages from Fitch Ratings. The nonbank servicer was established in 2008 and is owned by FrontRange Capital Partners, along with Kevin Kanouff, Statebridge’s CEO and David McDonnell, the servicer’s managing director.As of the end of the second quarter of 2014, Statebridge subserviced $1.08 billion in mortgages, according to Fitch ... [Includes five briefs]

JPMorgan Chase and Wells Fargo have both paid major settlements regarding FHA lending, and both have curtailed their participation in the program, according to a new analysis of Ginnie Mae data by Inside FHA Lending. During the first six months of 2013, Chase accounted for 11.8 percent of the FHA mortgages in newly issued Ginnie mortgage-backed securities. During the first half of 2014, its volume of FHA loans in Ginnie pools was down 75.8 percent from the same period last year, and its share of the market sank more than half, to just 5.1 percent. Jamie Dimon, Chase’s president and CEO, recently questioned why the bank should stay in the FHA business when legal costs are so high. The Ginnie data show it ... [1 chart]

Ginnie Mae is taking its issuer approval process online effective Sept. 1, 2014. Entities seeking to become an approved issuer of Ginnie mortgage-backed securities must file their applications electronically through the new Application Connection (AC), which is on the agency’s website. Ginnie Mae will no longer accept paper applications after July 31 as it shifts from the old to the new system. The agency is strongly encouraging potential applicants to complete two required courses through the Ginnie Mae Online University before filling out an application to become a Ginnie Mae MBS issuer. The courses are “Ginnie Mae 101” and “Applying to Ginnie Mae.”The two mandatory courses and the Ginnie Mae Online University provide free training and how to apply for approval, as well as the role and responsibilities of a Ginnie Mae issuer in ...