A spinoff product of the Federal Home Loan Banks’ Mortgage Partnership Finance Program experienced explosive growth in lender participation resulting in a record 2012, according to the FHLBank of Chicago. The MPF Xtra program, launched in 2008 to serve as a conduit for Fannie Mae loans, saw its volume increase from $2.8 billion overall during 2011 to $6.9 billion at year-end 2012, noted the Chicago FHLBank in its fourth quarter 2012 earnings report.
The majority of financial institutions defending themselves against a massive litigation initiative by the Federal Housing Finance Agency on behalf of Fannie Mae and Freddie Mac for toxic mortgage-backed securities purchased by the GSEs launched a counteroffensive this week by urging a federal appeals court to intervene in their favor against the “unfair” trial judge. Fifteen banks, including JPMorgan Chase, UBS Americas, Citigroup, Deutsche Bank and Bank of America, filed a joint petition with the Second Circuit Court of Appeals in New York complaining that U.S. District Judge Denise Cote has engaged in a “one-sided” approach designed to force a settlement rather than “foster fair and reasonable determination of the issues.”
The GSEs continued to reduce their footprint in global debt markets during the fourth quarter of 2012, with debt outstanding and issuance down from the previous quarter and from the same period a year ago. Fannie Mae’s, Freddie Mac’s and the Federal Home Loan Banks’ combined debt outstanding was $1.867 billion during the period ending Dec. 31, 2012, down 2.5 percent from the third quarter and down 11.6 percent from the fourth quarter 2011, while the GSEs issued a combined total of $598.8 billion in new debt during the fourth quarter.
Two banks re-entered the non-agency mortgage-backed security market in late March after years of holding such originations in portfolio. JPMorgan Chase issued a $616.26 million non-agency jumbo MBS and EverBank Financial is set to issue a $307.36 million non-agency jumbo security. The banks join Redwood Trust, which was the only non-agency jumbo MBS issuer in 2010 and 2011, and Credit Suisse, which resumed non-agency jumbo MBS issuance in 2012. The banks issued non-agency jumbo MBS even though they ...
The use of premium pricing to induce more borrowers to opt for FHA streamline refinancing may be a boon for FHA borrowers but clearly a bane for investors in Ginnie Mae mortgage-backed securities, according to Barclays Research analysts. There are indications that more FHA lenders are resorting to premium pricing, in which borrowers pay a higher mortgage rate in return for lowering the cost of obtaining the loan. Its use seems to be increasing, which also raises the risk of Ginnie Mae prepayments, said ...
The Internal Revenue Service issued an opinion this month stating that real estate owned costs do not need to be capitalized. Lawyers at Shumaker, Loop & Kendrick said IRS memorandum AM2013-001 appears to reverse an IRS opinion issued last year which stated that costs associated with REOs must be capitalized. “Historically, many banks have deducted expenses associated with other REO property currently rather than capitalizing them,” Shumaker, Loop & Kendrick said. However, in the last few years ...
According to an analysis by Fitch Ratings, the overall charges for a simple jumbo non-agency MBS across all note-holders would increase to between 6.3 percent and 8.2 percent under the new proposal.
Moody’s said the JPMorgan Mortgage Trust 2013-1 has a weak representations and warranties framework, a restrictive rep and warrant enforcement mechanism and a lack of risk retention by Chase.
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