Shellpoint Partners is preparing to issue new non-agency MBS as it filed a shelf registration statement this week with the Securities and Exchange Commission. Once approved, Shellpoint plans to issue non-agency MBS via Shellpoint Mortgage Acceptance, which it has nicknamed “Shelly Mac.” Non-agency MBS from the specialty finance company formed in 2010 with Lewis Ranieri as its chairman will differ in a number of ways from non-agency MBS issued by Redwood Trust. Instead of acquiring loans on a bulk or flow basis from lenders, Shellpoint said it only expects to securitize mortgages originated by its wholly-owned subsidiary New Penn Financial. “Shellpoint and New Penn Financial are...

The Commodity Futures Trading Commission late last week issued a temporary exemption for “securitization vehicles,” including MBS, from burdensome rules required by the Dodd-Frank Act regarding commodity pools. The exemption from rules for swaps lasts through the end of the year and was detailed in a series of no-action letters. Industry participants including the American Securitization Forum and the Securities Industry and Financial Markets Association requested the no-action letter from the CFTC for rules that went into effect on Oct. 12. The groups warned that applying the new regulation to MBS with simple interest rate swaps would harm the market for new issuance as well as outstanding securities. “This legal and regulatory uncertainty could have...

Mortgage real estate investment trusts that invest in MBS are likely to see their profitability reduced in coming quarters, largely as a result of the competition they’re facing from the Federal Reserve for assets to buy. Since the Fed’s Sept. 13 announcement that it would snap up an additional $40 billion of agency MBS a month as part of its latest quantitative easing, yields have dropped and spreads have narrowed, and that’s cutting into the earnings and dividends of mortgage REITs. Paul Miller, a securities analyst at FBR Capital Markets, agrees...

Optimism in the non-agency MBS market’s recent extraordinary performance continues as investors look beyond legacy MBS to new transactions, such as Redwood Trust’s Sequoia jumbo securitizations, according to analysts. A recent analysis by Bank of America Merrill Lynch expects lower-yielding asset classes to push investors toward the non-agency MBS sector, where volumes are expected to remain at healthy levels for the rest of 2012. Analysts, however, noted...

Just two institutions – Fannie Mae and Freddie Mac – end up securitizing the vast majority of conventional home loans, but a large universe of lenders deliver a significantly diverse supply of loans to the government-sponsored enterprises. A new Inside Mortgage Finance special report based on loan-level securities disclosures reveals that 1,848 different institutions delivered single-family mortgages to the two GSEs during the third quarter. They ranged in size from Wells Fargo, which delivered nearly a quarter of mortgages securitized by Fannie and Freddie during the period, to Wisconsin-based Universal Mortgage Corp., which sold one small $39,000 loan to Fannie during the period. The report, GSE Seller Profile: 3Q12, shows...

PNC Bank has sued Republic Mortgage Insurance Co. for refusing to pay claims and attempting to rescind coverage on thousands of legacy mortgage loans that came with the bank’s acquisition of National City Corp. in 2008. In a complaint filed in federal district court in Pittsburgh last week, PNC Bank alleged that the North Carolina mortgage insurer refused to honor coverage it sold to National City under a “flow” policy and “pooling” policy between 1989 and 2005 by increasing its rescissions and cancellations. The flow policy provided...

Unanticipated complications with the Dodd-Frank Act appear to have caused Fannie Mae and Freddie Mac to miss a Sept. 30 deadline set by the Federal Housing Finance Agency to initiate risk-sharing transactions with non-agency investors. However, FHFA officials said they continue to work with the government-sponsored enterprises on the issue. “Risk sharing is a complex process that requires time to assess market opportunities, structural considerations, make operational changes, and develop proper risk metrics and controls,” an FHFA spokesman said. “We are moving forward steadily and expect to continue making progress in the coming months.” FHFA officials would not comment...

New issuance of single-family MBS by Fannie Mae, Freddie Mac and Ginnie Mae jumped by 16.9 percent from the second quarter of 2012 to the third quarter, according to a new market analysis and ranking by Inside MBS & ABS. The three agencies issued a total of $436.0 billion of single-family MBS during the third quarter, raising year-to-date issuance to $1.194 trillion. That was up 45.6 percent from the first nine months of 2011. Over half (50.3 percent) of the agency production in 2012 has come...[Includes one data chart]

Certain aspects of the securitization process can and should be standardized to serve a “utility function” for the secondary mortgage market under a new proposed securitization platform drafted by the Federal Housing Finance Agency. Last week, the FHFA released a white paper detailing its proposed framework for a common securitization platform and model pooling and servicing agreement for review and public comment. The FHFA is working...

Some of the major players in what is likely to develop as the real estate owned rental securitization market are still unsure about how exactly the market will develop. However, investor interest in the REO rental sector is strong, even if securitizations will not receive AAA ratings. At a seminar this week hosted by the American Securitization Forum, Suzanne Mistretta, a senior director at Fitch Ratings, confirmed that the rating service will not give initial REO rental securitizations anything higher than a single-A rating. Fitch and others have been approached...