The Securities Industry and Financial Markets Association recently filed an amicus brief in support of the defendants to reverse a case in which the Federal Housing Finance Agency argued that Nomura Holdings sold shoddy MBS to Fannie Mae and Freddie Mac. In the case of FHFA vs. Nomura Holdings, a judge ruled in May, after a three-week bench trial, that Nomura and RBS Securities were liable for the claims brought by the FHFA and knowingly sold bad MBS to the government-sponsored enterprises before the 2008 financial crisis. The MBS were backed by mortgages with an unpaid principal balance of about $2.05 billion at the time of purchase. Nomura appealed...

The Federal Home Loan Banks appear to be eyeing a bigger share of the government-backed lending market with the announcement of a new servicing-release option for FHA, VA and rural housing loans sold into the Mortgage Partnership Finance program. The addition of a servicing-released option from Nationstar Mortgage, a top-10 mortgage servicer, to an already existing servicing-retained execution will give participating lenders greater flexibility in pricing and selling government-backed mortgages they have originated into the secondary market, said Matt Feldman, president of the Chicago FHLB. Previously, program participants were required...

Federal regulators late last month rejected industry requests that swap agreements entered into by securitization vehicles be exempt from new capital and margin requirements. The three federal banking regulators, along with the Federal Housing Finance Agency, finalized a rule that requires covered swap entities to collect and post initial margin to counterparties that are swap entities or financial end users with material swaps exposure of $8 billion or more. The Structured Finance Industry Group had argued...

The interim guidelines modify three key areas where lender-complaints have been common, including a revision to the calculation of the owner-occupancy ratio.

The Structured Finance Industry Group released its latest “RMBS 3.0 Green Paper” this week as part of an effort to revive the non-agency mortgage-backed security market. The nearly 300-page paper focuses on model representations and warranties for non-agency MBS backed by new originations. SFIG detailed 39 model reps and warrants, adding to eight other model reps and warrants that were previously released by the trade group. About half of the latest model reps and warrants ...

The third quarter of 2015 marked one of the few periods in recent years when Redwood Trust didn’t sell a jumbo mortgage-backed security. Instead, the real estate investment trust focused its jumbo sales efforts on the whole-loan channel, a trend expected to continue into 2016, according to officials at Redwood. “A strong portfolio bid for home loans from banks currently results in a more favorable loan-sale execution for us versus securitization,” Brett Nicholas, Redwood’s president ...

Issuance of jumbo mortgage-backed securities started to pick up speed in November after a slow start to the fourth quarter of 2015. Redwood Trust plans to issue a $337.08 million jumbo MBS with a number of unique characteristics, according to presale reports. Sequoia Mortgage Trust 2015-4 will be backed by 15-year fixed-rate mortgages, 75.5 percent of which were originated by UBS Bank. Kroll Bond Rating Agency noted that this will be the first post-crisis deal to include ...

The nonprime mortgages held by the government-sponsored enterprises continued a steady decline in the third quarter of 2015, according to a new analysis by Inside Nonconforming Markets. Fannie Mae and Freddie Mac held a combined $153.22 billion in purchased/guaranteed nonprime mortgages as of the end of the third quarter of 2015, according to estimates by Inside Nonconforming Markets. The holdings declined by 3.7 percent ... [Includes one data chart]

Freddie Mac is preparing to sell its second “Whole Loan Securities” transaction, according to a presale report from Moody’s Investors Service. The planned $634.64 million deal will be structured like a non-agency mortgage-backed security with senior tranches and subordinate tranches. Unlike the first deal from the government-sponsored enterprise, the planned issuance received ratings on some of the subordinate tranches. The unrated senior ... [Includes three briefs]

Thanks to declining interest rates and higher prepayment speeds in the third quarter – especially on Ginnie Mae receivables – several publicly traded nonbanks were forced to write down the asset value of their mortgage servicing rights, causing millions of dollars in red ink. According to a review by Inside Mortgage Finance of the earnings statements of six nonbanks, the combined servicing markdown was an ugly $448 million. The group includes Nationstar Mortgage, Ocwen Financial, PennyMac Financial Services, PHH Corp., Stonegate Mortgage and Walter Investment Management Corp., the parent of Ditech Financial. Walter took...