Interest shortfalls in the residential MBS space continued to drift higher across different collateral types, tranche types and vintages throughout 2013, according to Morningstar Credit Ratings. “As of the December 2013 remittance cycle, nearly one out of five deals (19.1 percent) in our sample experienced a shortfall in at least one tranche,” Morningstar said in a recent report. Interest shortfalls take place...

Investors hoping to cash in on some of the huge returns realized by speculators in legacy nonprime MBS likely have missed the boat. Moreover, principal reductions on the remaining underlying loans are now deemed a credit negative. Trading in on vintage non-agency securities has been light of late. According to a recent report from Bank of America Merrill Lynch, the rally in such securities “has reached the ninth inning.” BAML notes...

Although the city of Richmond, CA, is still toying with the idea of using eminent domain to seize underwater mortgages out of non-agency MBS trusts, it has yet to receive final approvals to do so. Moreover, even though speculation is mounting that its “partner” in the controversial tactic, Mortgage Resolution Partners, might be going away, the city’s mayor said she hasn’t given up. In an interview with Inside MBS & ABS this week, Mayor Gayle McLaughlin noted that “Eighteen elected officials I have talked to have shown an interest” in the concept. Those officials include representatives from San Pablo, CA, San Francisco, and smaller cities around Los Angeles. She also has spoken with officials in Irvington and Newark, NJ. Wall Street has lobbied...

What’s the best way to entice a workaholic mortgage loan officer who knows how to bring home the bacon? Answer: Pay them a huge signing bonus.

More homebuyers opted for adjustable-rate mortgages as interest rates increased during 2013, although most of these loans remain in portfolio. ARMs accounted for 11.7 percent of mortgage originations in the third quarter of 2013, according to Inside Mortgage Finance, up from a share of 9.8 percent in the third quarter of 2012. Quarterly originations of ARMs have stayed relatively steady in recent years and hit $54 billion in the third quarter of 2013. But ARMs remain relatively rare in [Includes two data charts]

Significant investments in mortgage servicing rights appear to have paid off for Two Harbors Investment, a real estate investment trust. PennyMac Mortgage Investment Trust is also turning profits due to MSRs, servicing and a correspondent operation. Two Harbors this week reported net income of $239.4 million for the fourth quarter of 2013, rebounding from a net loss of $192.7 million in the previous quarter, both based on generally accepted accounting principles. During the fourth quarter, Two Harbors ...

Two pages of data showing the top 30 sellers of agency mortgages in 2013 with a break-out for each lender listing average credit scores, debt-to-income ratios, loan-to-value ratios, loan size, purchase-mortgage share and refinance share. All characteristics are shown for the origination channel (retail, correspondent and broker) at each lender.

January 2014 marked the fourth month in a row where combined agency securitization included more purchase-money mortgages than refinances, according to Inside MBS & ABS.

Some 18 lenders contributed to the security, all of which were disclosed – somewhat uncommon for jumbo MBS.

Also, the CFPB is considering requiring more underwriting and pricing information, such as the interest rate, total origination charges, and discount points.