Issuers of MBS and ABS are concerned about new liabilities they are likely to face if they have to disclose loan-level information at issuance under a rule recently proposed by the Securities and Exchange Commission. In February, the SEC proposed requiring issuers to disclose loan-level data to investors on issuers’ own websites instead of on the Electronic Data-Gathering, Analysis, and Retrieval system, better known as EDGAR, the current platform for SEC-required disclosures. The comment period on the proposal was scheduled to close March 28. Preliminary comment letters submitted...

It’s too soon to reduce agency loan limits, according to numerous trade groups involved in the securitization and mortgage origination markets. Momentum in Congress also appears to be moving toward maintaining the high-cost loan limits, a category of loans that was created in 2008 on an “emergency” basis. In December, the Federal Housing Finance Agency issued a request for input on a proposal to set loan purchase limits for Fannie Mae and Freddie Mac. Ed DeMarco, the FHFA’s acting director at the time, was considering reducing the loan amount eligible for purchase by the government-sponsored enterprises from $625,500 in high-cost areas to $600,000 and reducing the national loan purchase limit for the GSEs from $417,000 to $400,000. DeMarco said...

With just one accord this week, the Federal Housing Finance Agency more than doubled the amount it has recovered on behalf of Fannie Mae and Freddie Mac from issuers and underwriters that sold subprime and Alt A MBS to the government-sponsored enterprises. Bank of America agreed to a $9.3 billion settlement that covers its own dealings as well as those of Countrywide Financial and Merrill Lynch, which it acquired in 2008. The agreement covers some $57 billion of MBS issued or underwritten by these firms. BofA did not admit...[Includes one data chart]

Investors plan to increase their holdings in what are known as esoteric ABS – such as container, timeshare, whole business and franchise loans, structured settlements and solar and renewables – more so than consumer or commercial ABS, according to a new survey from the DBRS credit rating agency. Higher-yield opportunities are likely a key reason investors will look toward esoteric assets in a period of exceptionally low interest rates, the survey found. “Over the next 12 months, market participants are...[Includes two data charts]

The private equity plaintiffs allege that the Treasury’s change in the dividend structure of its preferred stock leaves the GSEs with no funds to pay anything to junior shareholders.

In the end, it's all about yield, which is why investors are going after "esoteric" ABS. Will non-prime MBS ever stage a comeback, even a mini-comeback?

Speculation continues to grow concerning which nonbanks have looked at buying PHH Mortgage. Our sources caution that “looking” doesn’t mean a deal is close. PHH is based in Cherry Hill, NJ, not too far from Philadelphia. One advisor suggested we look at who has been flying in from points south.

Lenders are discovering hidden gold in their mortgage servicing rights these days. But even with the run-up in values, many lenders are choosing to keep their servicing, some because it maintains relationships with customers who have additional valuable banking needs, and others to avoid the regulatory headaches associated with servicing transfers. Some lenders are taking a middle path, selling the asset but continuing to work the loans as subservicer. During a webinar sponsored by Inside Mortgage Finance this week, Mark Garland, president of MountainView Servicing in Denver, noted that there are far more sellers today than even one year ago. In the first three months of 2014, 36 deals went to auction with $98 billion in unpaid principal balance. That compares with the 13 deals ($146 billion) auctioned during the same period last year, although $100 billion of that was in one deal. “Despite strong demand and pricing levels, sellers are vetting...

Then again, some lenders are taking a middle path, selling the MSR asset but continuing to work the loans as a subservicer.

The cost of borrowing for many homebuyers could rise as a consequence of the Senate’s newest housing finance reform legislation if it’s enacted as is, according to an analysis by Barclays. The bill, filed last week by Sens. Tim Johnson, D-SD, and Mike Crapo, R-ID, would replace Fannie Mae and Freddie Mac with a new mortgage-backed securities program for conventional mortgages that requires private investors to take the first 10 percent of losses. The Barclays analysis found...