Springleaf Finance completed another subprime mortgage-backed security comprised of vintage performing loans this week, its second such MBS in eight months. However, the firm is facing significant financial difficulties and stopped offering mortgages at the beginning of the year. The $473.01 million subprime MBS received a AAA rating from Standard & Poor’s, just like Springleaf’s $496.86 million subprime MBS in September. As with the previous security, the latest MBS was backed by seasoned performing loans, an average of six years-old in this case ...

First Republic Bank – the primary source of loans for Redwood Trust non-agency mortgage-backed securities – has received high marks for its jumbo originations. FRB’s originations are concentrated around San Francisco, largely for wealthy borrowers. After relying on CitiMortgage for all of the loans in its first post-bust non-agency MBS issuance, Redwood has relied heavily on FRB. The lender accounted for a slight majority of the four securities totaling $1.41 billion Redwood has issued in 2011 and at the beginning of 2012 ...

The FHA and Ginnie Mae continue to face risk-management challenges despite steps they have taken to better assess, manage and minimize risk, according to an updated report from the Government Accountability Office. The report said recommendations the GAO made in a previous assessment to improve risk management have not been fully implemented at either of the agencies. Both agencies, however, said efforts are underway to implement GAO recommendations. The FHA is getting more scrutiny from Congress because of the weak condition of the Mutual Mortgage Insurance Fund, whose capital reserve ratio has ...

Fannie Mae, Freddie Mac and Ginnie Mae produced a solid $384.9 billion of new single-family MBS during the first quarter of 2012, including a surge in new issuance in March. But industry analysts said they had been bracing for more. Combined, the three agencies saw new single-family MBS production rise 14.0 percent from the fourth quarter of last year. Issuance in the opening round of 2012 was 12.9 percent ahead of the volume produced in the same period last year. It was the strongest quarter for new agency MBS since the end of 2010. Fannie dominated the agency market, accounting...(Includes one data chart)

New issuance of real estate mortgage investment conduits backed by agency MBS rose 6.8 percent from the fourth quarter of 2011 to the first three months of this year, about half the rate of increase in underlying MBS production, according to an Inside MBS & ABS ranking. Fannie Mae got the early lead with $33.5 billion in new REMIC production, a gain of 8.4 percent from the fourth quarter. Freddie Mac ranked second, but its REMIC volume was down 1.5 percent from the previous period and off 50.7 percent from year-ago levels. Ginnie Mae posted a significant 18.1 percent...(Includes one data chart)

Credit Suisse has joined Redwood Trust to push the comeback of the non-agency MBS sector with a new public issue, while Springleaf Financial has put together another securitization backed by seasoned subprime mortgages. The Credit Suisse transaction, CSFB Mortgage Securities 2012-CIM1, is backed by $1.4 billion of prime residential mortgages, 82 percent of which had been originated by MetLife Home Loans. The deal sparked some controversy among rating services as Fitch Ratings questioned whether it had enough credit enhancement to cover risks related to property valuations on many of the...

A legal action brought by a group of four pension funds against Bank of New York Mellon alleging that the bank failed in its role as trustee to Countrywide MBS investors will proceed in federal court, albeit on much narrower grounds, a U.S. District Court judge has ruled. Last week, Judge William Pauley of the U.S. District Court for the Southern District of New York reduced “with prejudice” the number of Countrywide MBS trusts on which the plaintiffs could sue from 530 to 26. The case is Retirement Board of the Policemen’s Annuity and Benefit Fund of the City of Chicago, et al v. the Bank of New York...

Congressional supporters of creating a legislative framework for a covered bonds market in the U.S. fell short in an attempt to get covered bond provisions attached to the Jumpstart Our Business Startups (JOBS) Act approved by Congress before lawmakers broke for spring break. The JOBS Act was signed by President Obama last week and contains provisions to help companies go public, raise capital privately and remain private longer, as well as making a number of significant changes to the Securities Act of 1933 and the Securities Exchange Act of 1934. But it does not contain any of the provisions...

Some liberal interest groups are questioning whether the RMBS working group formed by federal and state enforcement agencies to coordinate securitization investigations is moving fast enough. In an email circulated earlier this week, CREDO, a progressive network, wrote that the Department of Justice has yet to deliver on its promise of 55 investigators to the RMBS working group. As federal and state enforcement agencies were wrapping up the contentious $25 billion settlement with five mortgage servicers in late January, U.S. Attorney General Eric Holder announced a new task force designed to “stream...

Credit rating agencies (CRAs) should return to their market roots and stop being a regulatory tool for public policy, according to a Moody’s Investors Services top executive. In recent remarks to the American European Community Association, Ray McDaniel, chief executive officer of Moody’s Corp., noted that credit ratings have grown from limited use by banks in the 1920s to something that regulators and politicians have relied upon to serve public-policy objectives for the past several decades. McDaniel said such reliance has got to stop. He said regulatory policies should be geared towards reducing any...