Investment bankers that ply their trade in mortgage finance expect 2013 could turn out to be a strong year for mergers and acquisitions as current players, flush with cash, look to expand their franchises. But according to interviews conducted by Inside Mortgage Finance, “outside” money – including private-equity capital and hedge funds – might finally take the plunge this year as well. “PE firms are definitely looking,” said Chuck Klein, managing partner of Mortgage Banking Solutions. But he also cautions that hedge funds are hardly pushovers as buyers. “Hedge funds do...

Newcastle Investment Corp., a behind-the-scenes player in Nationstar’s recent purchase of $215 billion of servicing rights from Bank of America, plans to spin off part of its business into a new unit called New Residential Investment Corp. According to a filing with the Securities and Exchange Commission, NRIC will invest in MBS, excess mortgage servicing rights, nonperforming loans and other asset classes. The company hopes to complete the spin-off by the end of March. The shares, though, will be spun-off...

The Obama administration is making a renewed push in 2013 for a government-backed non-agency refinance program, potentially the third major phase of the Home Affordable Refinance Program. However, there appear to be numerous hurdles to using the government-sponsored enterprises to help refi non-agency borrowers and a similar proposal using the FHA has yet to gain widespread support in Congress. Under the latest HARP 3.0 proposal, Fannie Mae and Freddie Mac would refinance certain non-agency mortgages with negative equity, waive mortgage insurance requirements and charge the borrowers higher guaranty fees. The proposal would require approval from Congress. “After taking significant taxpayer bailouts, the GSEs’ fiscal condition is...

The securitization market generated $1.847 trillion in new residential MBS and non-mortgage ABS in 2012, reversing two straight years of declining volume, according to a new Inside MBS & ABS analysis and ranking. Last year’s output was up 41.2 percent from total issuance in 2011, and it marked the strongest annual new issuance volume since 2009. Total securitization volume rose modestly, by 2.3 percent, from the third quarter to the fourth quarter, and activity cooled significantly in December. As has been the case since the financial market meltdown in 2008, securitization was dominated...[Includes three data charts]

The Consumer Financial Protection Bureau has issued its long-awaited “qualified mortgage” ability-to-repay final rule that, as expected, includes an exception for Fannie Mae and Freddie Mac mortgages and does little to facilitate a rebound in the non-agency sector. Mortgage lenders will be presumed to have complied with the ability-to-repay rule if they originate “qualified mortgages” that prohibit or limit the risky features believed to have harmed consumers in the recent mortgage crisis. That means...

New York Mortgage Trust recently completed two unique short-term securitizations backed by residential and multifamily mortgages. Officials at the real estate investment trust said the deals provide NYMT with greater funding flexibility for future loan purchases. Shortly before the end of 2012, NYMT issued a security with a three-year term to finance residential mortgages owned by the REIT with an aggregate market value of approximately $59.6 million. NYMT said it received gross cash proceeds of approximately $38.7 million before deducting expenses associated with the private placement. “We believe...

Carrington Mortgage Holdings, which became a Ginnie Mae issuer last year, is eyeing the nonconforming market, but isn’t ready to commit to any securitization plans, at least not yet. Company Executive Vice President Rick Sharga told Inside MBS & ABS that “we’re looking at creating some non-agency products that serve borrowers whose credit has been damaged during the Great Recession, but who otherwise would be good loan candidates.” Sharga noted...

It is 2013 and courtrooms across the country continue to hum with investor disputes over issuer liability for MBS investments that went bad. In its third lawsuit against JPMorgan Chase since mid-2011, the National Credit Union Administration is seeking millions of dollars in damages in connection with the packaging and sale of $2.2 billion in MBS issued by the now-defunct Washington Mutual to three corporate credit unions long before it was acquired by JPMorgan in 2008. Filed in Kansas federal court, the NCUA lawsuit alleged...

Although Congress’ and the president’s just-in-time agreement to forestall the fiscal cliff crisis, at least for a while, provided some mortgage market-friendly results, MBS investors still face some challenges in 2013, analysts say. The American Taxpayer Relief Act, H.R. 8, includes a one-year extension through Dec. 31, 2013, of the Mortgage Debt Forgiveness Act that exempts loan amounts forgiven by lenders and foreclosures from taxable income. Deductions on mortgage insurance premiums for borrowers making below $110,000 were extended through 2013 and made retroactive to cover 2012, as well. “The combination of tax relief on mortgage insurance premiums and debt forgiveness should have...

Proponents of creating a covered bond market in the U.S. say the prospects of such a move have never looked better in the wake of legislative momentum in Congress, the off-year election year and the adoption of a covered bond framework in Canada. Last month, Canada’s national housing agency announced details of the legal framework for the issuance of Canadian covered bonds. Under the framework, registered covered bonds will be issued through a program that will be run by the Canada Mortgage and Housing Corp. The Canadian framework will operate...