A three-judge federal panel this week heard a rare interlocutory appeal by one of the defendants in a series of lawsuits that the Federal Housing Finance Agency has filed in connection with non-agency MBS purchased by Fannie Mae and Freddie Mac. Lawyers for UBS Americas argued before the Second Circuit Court of Appeals that it should reverse the May ruling by Manhattan Federal Judge Denise Cote denying the banks motion to dismiss the FHFAs lawsuit as time-barred under the statute of repose. The FHFA sued...
New York Attorney General Eric Schneiderman said he plans to file more lawsuits against non-agency MBS issuers using the Martin Act, which allows platform-wide cases as opposed to cases focused on specific deals. Its not about one deal or five deals or 10 deals, its about the entire course of conduct, he said last week after filing a platform-wide lawsuit against Credit Suisse Securities. The lawsuit was filed as part of the RMBS Working Groups efforts, including a similar lawsuit Schneiderman filed in October against JPMorgan Chase. The actions you have seen...
Ginnie Mae is beefing up its staff to handle increased securitization volume, a growing number of applications for new issuer approval, and closer monitoring of current participants in the Ginnie Mae program, according to a top agency executive. The agency plans to have 130 market professionals on staff by 2013, up from 70 in 2010, to ensure compliance of new and current participants with existing guidelines and the agencys adaptation to a changing MBS market, said Michael Drayne, senior vice president at Ginnie Maes Office of Issuer and Portfolio Management. We have been given...
The American Securitization Forum has published an implementation guide to the due diligence requirements for securitization positions under the market risk rule issued by the federal bank regulators in August, as well as guidance the Office of the Comptroller of the Currency put out this past June. One of the primary purposes behind the rule and the guidance was to lessen industry dependence on credit ratings and to promote instead greater reliance upon proper due diligence. With the adoption of the final rules, market participants have been working...
The Home Affordable Refinance Program surged to a record 286,044 loans during the third quarter of 2012, but volume began to slow in September, according to an Inside MBS & ABS analysis of new data released by the Federal Housing Finance Agency this week. HARP business was up 17.8 percent from the second quarter to the third, based on loan count, but overall refinance activity at Fannie Mae and Freddie Mac was up 21.8 percent for the same period. The program for underwater Fannie and Freddie borrowers saw a huge increase in volume at the start of the year as lenders implemented a series of changes in the program. Activity surged again in the second quarter when loan-to-value limitations were largely taken out of the equation. But HARP volume fell off...[Includes one data chart]
Fannie Mae and Freddie Mac have reduced their dependency on U.S. government support, but there may be restructuring issues within the budget talks to resolve the looming fiscal cliff, according to Fitch Ratings. Fitch this week affirmed its AAA rating for both Fannie and Freddie even as its outlook for the two GSEs remains negative. However, the rating agency warned that its outlook for Fannie and Freddie depends upon the economy and the ability of political leaders to come to an accord on taxes and government spending before years end.
Both Fannie Mae and Freddie Mac retained their dominant shares of mortgage-backed securities with a bit of a boost during the third quarter of 2012, according to an Inside The GSEs analysis.The two GSEs issued a combined $335.4 billion MBS during the third quarter, compared to $273.9 billion during the previous quarter. Fannie and Freddie saw an ample 54.7 percent increase in MBS issuance during the first nine months of 2012 compared to the same period a year earlier.
UBS Americas took its challenge to the first of a long line of mortgage-backed securities lawsuits brought by the Federal Housing Finance Agency to a federal appeals court this week, arguing the GSE conservator waited too long before filing charges that the company misled Fannie Mae and Freddie Mac in selling toxic non-agency MBS to the two GSEs.
Valuation of mortgage servicing rights has been challenging for many market participants, particularly with the incredible pace of change occurring in the mortgage servicing industry. Hence, it is important for servicers to have the basic building blocks to a solid MSR valuation process and a full understanding of the company for pricing and valuation purposes, suggests a recent study from PricewaterhouseCoopers. PwC noted that MSR valuations for seasoned portfolios have dropped ...
While the nine rating services registered as Nationally Recognized Statistical Rating Organizations were largely compliant with Securities and Exchange Commission regulations and recommendations, the agency found some significant issues with the ABS rating process. In a review covering the governments 2012 fiscal year ending in September, the SEC said one of the top three firms appeared to change its method for calculating a key financial ratio in rating certain asset-backed securitizations, but failed for several months to publicly disclose the change and its effects on the ratings. The agency includes non-mortgage ABS, commercial MBS and non-agency MBS in a single category of asset-backed securitizations. Further, it appears the NRSRO did not consistently apply...