It looks like the Securities and Exchange Commission has yielded to the majority view of the other federal regulators and agreed to a simplified qualified residential mortgage definition that could make it easier for issuers of non-agency MBS. The SEC dropped its insistence on a downpayment requirement, according to an account this week in the Wall Street Journal. In exchange, the other federal agencies involved in the rulemaking agreed to revisit the QRM issue two years after the final risk-retention rule goes into effect. Deals backed...

WinWater Home Mortgage, a New York-based conduit managed by several Wall Street veterans, is ready to market its first jumbo MBS, but has also made inquiries about non-prime transactions as well, according to traders and lenders familiar with the company. WinWater plans to issue a $249.47 million jumbo MBS, according to a presale report released late this week by Kroll Bond Rating Agency. Not only is the bond WinWater’s first deal, it represents the first new issuance in the sector since late April when Credit Suisse came to market. The average combined loan-to-value ratio on the deal is...

The International Organization of Securities Commissions is working on a set of “good practices” to provide to the vast majority of the world’s securities regulators as part of an effort to prompt securities investors to reduce their reliance on credit ratings. While participants in the U.S. structured finance industry suggest that reliance on credit ratings diminished after the financial crisis, many funds continue to have guidelines that reference credit ratings. Some investors, for example, couldn’t buy into risk-sharing transactions from the government-sponsored enterprises unless the deals received investment-grade ratings. IOSCO recently issued...

The volume of outstanding commercial MBS continues to hit record highs and the number of active lenders is near levels seen before the financial crisis. While issuers suggest that the industry is much different than in 2007, there are concerns about looser underwriting. Some $86.48 billion in commercial MBS was issued in 2013, according to the Inside Mortgage Finance MBS Database. And while issuance in the first quarter of 2014 was lower than three of the four quarters in 2013, Standard & Poor’s projected this week that issuance of commercial MBS could hit $90.0 billion this year. The issuance has been prompted...

A North Carolina federal judge announced from the bench this week he is considering dismissing a Justice Department fraud case against Bank of America, citing a less than overwhelming preponderance of evidence. U.S. District Judge Max Cogburn said during a hearing that he is leaning toward shutting down the DOJ’s case as per the March recommendation of U.S. Magistrate Judge David Cayer, who found that the Justice Dept. has failed to prove the bank made “material” false statements to the Federal Housing Finance Board. “DOJ may not have...

Real estate investment trusts that specialize in the MBS market held $261.0 billion of mortgage securities in their portfolios at the end of March, according to a new Inside MBS & ABS analysis. That was down 1.4 percent from the end of the fourth quarter. REITs have been de-leveraging and scaling back their MBS holdings since the third quarter of 2012, when the Federal Reserve began its massive spending spree in the agency MBS market. A few REITs began rebuilding...[Includes one data chart]

As safe as the qualified mortgage space might appear to be, there have been a number of challenges to address and overcome for smaller institutions originating QM loans intended for sale in the secondary market, according to a representative of one such lender at the American Bankers Association’s 2014 regulatory compliance conference in New Orleans this week. Bruce Schultz, senior vice president and head of secondary mortgage operations for SpiritBank, a family-owned community bank in Tulsa, OK, told attendees he’s heard from several industry peers who have expressed the view that the secondary market ‘would be a slam-dunk’ for his institution under the QM rule because “‘you’ve got automated underwriting.’” Maybe not...

American Capital Agency Corp., the second-largest REIT MBS investor, reported a sharp 14.6 percent drop in its holdings during the first quarter. But officials are upbeat about the future.

“This appears to be very good news and is a credit to our collective work with the Coalition for Sensible Housing Policy,” the National Association of Realtors told its members.

Up until the housing crash of 2008, it was not uncommon for many warehouse lenders to extend lines of credit to buy MSRs or finance the holding of the asset.