Japan became the biggest overseas investor in U.S. MBS and ABS markets last year, moving past mainland China to head the ranking, according to final Treasury Department data. Japanese investors held $199.7 billion of U.S. MBS and ABS as of the midway point in 2012, the one time a year when Treasury releases detailed foreign holdings of U.S. long-term securities. That was up 21.3 percent from June 2011, when Japan held just $164.7 billion of MBS and ABS. The Japanese increased...[Includes one data chart]

During an Inside Mortgage Finance webinar on Thursday, participants from expressed frustration on the ability to get new jumbo MBS deals because of the recent rapid rise in rates.

Investors in vintage non-agency MBS could take $7.8 billion in losses due to previously undisclosed principal forbearance on top of the $1.0 billion in losses uncovered this month. However, a survey suggests that servicers don’t intend to pass the losses through to investors. The losses recognized in May were reported after Ocwen Financial took over servicing from Homeward Residential. Analysts warned that other servicing transfers could prompt similar losses. Bank of America Merrill Lynch said...

The City Council of North Las Vegas, NV, is the latest local jurisdiction to be drawn by the eminent domain siren song of Mortgage Resolution Partners, despite the near-certain prospects of eventually crashing upon the rocks of opposition from federal agencies. Last week, the city council voted four-to-one in favor to approve a two-month advisory services agreement with MRP to advise the city on the seizure of mortgage loans through the use of eminent domain. Under the parameters of the agreement, MRP is to inventory potential loans in North Las Vegas that could be affected by its program, at no cost to the city, and to design a program for those loans that are inventoried. That program is to be brought back before the city council within 60 days at its Aug. 21, 2013, meeting. Also, the agreement prohibits...

Assured Guaranty Municipal Corp. will terminate a lawsuit it has pending against Flagstar Bancorp and will not pursue any future related claims under a settlement agreement the two entities announced last week. Under the agreement’s terms, Flagstar will pay Assured $105 million to settle the suit filed by the Bermuda-based bond insurer in 2011 related to $902 million of non-agency MBS it insured in 2005 and 2006 that were backed by home-equity lines of credit. The suit claimed the HELOCs did not comply with the representations and warranties made by the bank. In February, a New York federal judge ruled...

The veteran Congressman who would be the first permanent, Senate-confirmed director of the Federal Housing Finance Agency was vague and at times on the defensive during his confirmation hearing this week as Republican senators repeatedly questioned what in his resume makes him qualified to preside as regulator and conservator of Fannie Mae and Freddie Mac. Rep. Mel Watt, President Obama’s nominee to succeed FHFA Acting Director Edward DeMarco, told members of the Senate Banking, Housing and Urban Affairs Committee that the Finance Agency under his leadership would “rigorously follow” the agency’s statutory role in an “open and transparent manner working with all stakeholders.” “You can also be assured...

“This has been a particularly challenging week,” said Peter Sack, a managing director at Credit Suisse, during a webinar hosted this week by Inside Mortgage Finance. The yield on the benchmark 10-year Treasury has increased significantly in the past month, making pricing on non-agency jumbo MBS unattractive for issuers. In addition to issuing its own jumbo MBS, Credit Suisse has served as an underwriter on a number of deals, including the non-agency MBS from Shellpoint Partners that priced this week after a slight delay due to rapidly increasing interest rates and other pricing metrics. Analysts at FBR Capital Markets said...

The SEC will push for admissions of guilt as part of settlements of lawsuits it files against private industry, including participants in the MBS market.

It appears that Cerberus is going down the mortgage aisle one more time. Let's hope it doesn't end like GMAC. Meanwhile, jumbo MBS market seizes up, temporarily.

Participants in the non-agency mortgage-backed security market are concerned about the strength of the sector as interest rates and other pricing metrics have increased significantly in recent weeks. “When the 10-year Treasury rate started to rise recently and the mortgage interest rate spread out by 20 basis points, the non-agency MBS market spread out by 50 basis points,” said Lewis Ranieri, chairman of Ranieri Partners, at a forum hosted by the Bipartisan Policy Center last week. “And given there’s ...