Now that Bank of America has inked a long-rumored deal to sell mortgage servicing rights on some $308 billion of distressed mortgages to Nationstar and Walter Investment Management, the question becomes how much more the bank may unload. The answer may be quite a lot. Paul Miller, an analyst with FBR Capital Markets, said that he anticipates the megabank will sell between $300 billion and $400 billion of MSRs by the time 2013 ends. According to Miller, the “to be sold” product includes $100 billion of Ginnie Mae servicing, $150 billion of Fannie Mae MSRs and $100 billion to $200 billion of Freddie Mac servicing. A BofA spokesman declined...[Includes one data chart]

The Consumer Financial Protection Bureau this week spread a huge safety net under the agency mortgage market, ruling that loans deemed suitable for Fannie Mae, Freddie Mac, the FHA and the Veterans Administration will be “qualified mortgages” that provide strong protection against litigation for mortgage lenders. The CFPB’s long-awaited ability-to-repay final rule provides a safe harbor for loans that meet its QM definition and also are not considered “higher-priced mortgages” under an older Truth in Lending Act regulation promulgated by the Federal Reserve back in 2008. That rule classifies first mortgages as higher-priced if the annual percentage rate exceeds the average offered rate for comparable loans by 1.5 percentage points or more. Generally, the CFPB final rule defines...

Fannie Mae and Freddie Mac in 2012 combined for the third biggest year ever in single-family mortgage-backed securities issuance, according to a new Inside Mortgage Finance market analysis and ranking. Together, the two government-sponsored enterprises pumped out a whopping $1.266 trillion in new single-family MBS last year, a 48.2 percent increase over their total production back in 2011. It marked the biggest annual output by the two GSEs since they set the all-time record of $1.912 trillion back in 2003. Last year’s total came up just short of the second biggest annual issuance on record – $1.270 trillion – set in 2002. Heavy refinance activity was...[Includes three data charts]

Heavy refinance volume pushed both Fannie Mae and Freddie Mac single-family mortgage securitization up appreciably during the fourth quarter of 2012, helping to close out a post-crisis record year for GSE mortgage-backed security business, according to a new Inside The GSEs analysis.Fannie and Freddie issued $352.51 billion in single-family MBS during the fourth quarter, a 5.2 percent increase from the previous period and the biggest quarter in over three years.

Proponents of creating a covered bond market in the U.S., as well as a potential competitor for the Federal Home Loan Bank System, are hopeful that Canada’s recent establishment of a covered bond legal framework will lend legislative momentum to push such a bill through Congress this year. A spokesman for Rep. Scott Garrett, R-NJ, told Inside The GSEs this week that the chairman of the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises will re-file his bill, the U.S. Covered Bond Act, in the near future. “With the federal government backing over 90 percent of the mortgage market, we must seek creative ways to enable the private sector to provide additional mortgage, consumer, commercial, and other types of credit,” Garrett said in a statement. “I look forward to working with my colleagues in the House and Senate to ensure we pass covered bond legislation in the 113th Congress.”

Damage from Hurricane Sandy will have a negligible impact on mortgages in outstanding non-agency mortgage-backed securities, according to a new analysis by Opera Solutions. The servicing analytics provider said 45 non-agency MBS deals with $19.6 billion in outstanding balance have mortgages with exposure to significant damage from the storm and the likely affected balance is $6.0 billion. “Based on a detailed analysis of each portion of affected ZIP codes, the ultimate exposure is much lower ... [Includes four briefs]

Investors in non-agency mortgage-backed securities are pushing back against a loan modification program proposed by the Obama administration that would target underwater loans backing their investments. “Quite simply, investors have already been significantly harmed by the poor performance of many of the mortgage loans in non-agency MBS, and the Market Rate Modification proposal would only increase the severity of losses suffered by institutional investors,” Tom Deutsch ...

Fannie Mae and Freddie Mac, under directions from the Federal Housing Finance Agency, are close to issuing risk-sharing transactions, according to market participants. The securities will be structured to allow non-agency investors to take subordinate risk on government-sponsored enterprise mortgage-backed securities and will likely help set GSE guaranty fees going forward. Martin Hughes, CEO of Redwood Trust, said his company is currently under a non-disclosure agreement regarding risk-sharing ...

The guaranty fees charged by Fannie Mae and Freddie Mac are close to hitting a tipping point where non-agency mortgage-backed security issuance will be the more economic execution for new originations, according to some non-agency participants. “If the non-agency pricing is improving and the GSE pricing is worsening, at some point you’re going to hit a tipping point,” Luke Scolastico, a vice president at Credit Suisse, said last week at a panel discussion hosted by the American Securitization Forum ...

Credit Suisse’s jumbo conduit is increasing its acquisitions and looking to issue more non-agency jumbo mortgage-backed securities, according to Luke Scolastico, a vice president at Credit Suisse. “We’re buying loans every day,” he said last week at a panel discussion hosted by the American Securitization Forum. “More last month than the month before, and more that month than the month before.” Credit Suisse has issued $1.50 billion in non-agency MBS so far in 2012. While the first deals ...