Originations of non-agency jumbo mortgages declined in the second quarter of 2011, along with the rest of the mortgage market, but a new ranking and analysis by Inside Nonconforming Markets shows the jumbo sector still running higher than the pace in the first half of last year. Moreover, a number of lenders have boosted their jumbo originations or are looking to expand into the market as conforming loan limits are set to decrease. ... [includes one data chart]

Goldman Sachs has been ordered to retain an independent consultant to review foreclosure proceedings initiated by its former subsidiary, Litton Loan Servicing LP, under a formal enforcement action announced by the Federal Reserve Board last week. The firm was also required to provide financial remediation to affected borrowers. Additional monetary penalties are likely to be announced shortly. The Fed said it was acting against Goldman Sachs “to address a pattern of misconduct and negligence relating to deficient practices in residential mortgage loan servicing and foreclosure processing” involving Litton. Goldman sold...

Ginnie Mae in a conference call with its MBS issuers said it is going to be focusing its attention on new definitions related to data collection, and urged industry participants to provide feedback. Currently, the loan-to-value ratio definition stands as the ratio of the current unpaid principal balance amount to the appraised value, estimated value or purchase price of the property, and that value must include the upfront mortgage insurance premium. Under the new definition, however, the LTV ratio would be based on the original principal balance, said Ginnie officials. This includes any mortgage insurance premium to lower the sale price or...

The securitization market needs less uncertainty and a great deal more transparency in order to restore investor confidence and lure back private capital, industry executives told members of the House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises. Witnesses testifying before the subcommittee, which held a field hearing in New York City, said the state of the securitization market remains uncertain, not just due to government subsidies crowding out any private sector action but also because hesitant investors do not yet see much improvement in the opaque environment that led to the...

Fannie Mae, Freddie Mac and Ginnie Mae produced a total of $84.25 billion of new single-family MBS during August, a sturdy 19.8 percent jump from the previous month, according to a new analysis and ranking by Inside MBS & ABS. Although there was a brief bump higher in production in June, agency MBS issuance has generally been sliding lower since the end of 2010. The decline has corresponded to reduced production of refinance mortgages, which accounted for just 55.1 percent of new originations in the second quarter, down from 67.1 percent for all of last year. New data suggest the refi market is still struggling. Some 63.5 percent of...

Private investors in agency MBS could lose $13 billion to $15 billion from a new government effort to help current Fannie Mae, Freddie Mac and FHA borrowers refinance, according to a new Congressional Budget Office staff working paper. The Obama administration is expected to announce a revved-up refinance program as part of a new strategy to strengthen economic growth. A “stylized” refinance program analyzed by the CBO would have a relatively small impact on the overall economy, the analysts said. The biggest impact would be on private MBS investors and the estimated 2.9 million households that would likely be brought into the...

The Federal Housing Finance Agency’s legal action late last week against many of the nation’s largest financial institutions on the grounds they misled Fannie Mae and Freddie Mac about the quality of subprime and Alt A MBS purchased by the government-sponsored enterprises has few positives but plenty of negative potential consequences for the market, experts say. The 17 separate lawsuits filed by the FHFA seek unspecified damages on $196 billion in mortgage securities the two GSEs purchased, mostly between 2005 and 2008. The agency conducted extensive loan-level reviews that allegedly revealed widespread discrepancies between... [Includes two pages of data]

The Federal Housing Finance Agency this week defended its massive legal action against many of the nation’s largest financial institutions on behalf of Fannie Mae and Freddie Mac over the government-sponsored enterprises’ losses on non-agency mortgage backed security purchases. The Finance Agency contends that 17 financial institutions sold Fannie and Freddie some $196 billion of MBS, mostly between 2005 and 2008, that caused losses to the GSEs for which there should be compensation. Filed late last week in federal and state courts in New York and in federal court in Connecticut, the lawsuits seek damages and civil penalties under... [Includes one data chart]

The Federal Home Loan Bank system has requested that federal regulators clearly and unambiguously exempt the FHLBanks’ long-standing mortgage purchase programs from the government’s emerging risk-retention rule on securitization.In comments submitted to regulators last month on the interagency proposed rule, the 12 FHLBanks signed a joint letter to ensure the Banks’ Acquired Member Assets programs will be exempt under the final rule.

The Federal Housing Finance Agency this week became among the latest, most influential parties to legally weigh in on the proposed $8.5 billion Bank of America settlement over non-agency mortgage-backed securities.On Aug. 30, the deadline to file objections to the deal, the Finance Agency filed a “Notice of Appearance and Conditional Objection” with the U.S. District Court in Manhattan on behalf of Fannie Mae and Freddie Mac.