Structured Finance Industry Group staff and some investor members met recently with the Securities and Exchange Commission’s Office of Structured Finance to talk about the initial reaction that investors had to the final Regulation AB II rule. Among topics addressed were market trends, operational aspects and scope of applicability of the final rule, according to an update SFIG provided its members recently. Meanwhile, the SFIG is...

The City of San Francisco has delayed a proposed partnership with Richmond, CA, to use eminent-domain authority to forcibly acquire distressed mortgages out of non-agency securitization trusts, opting instead to study the impact of such an agreement as well as other alternatives to assist underwater homeowners. Opposition by the San Francisco City Controller and the mortgage banking industry has forced John Avalos, a member of the city’s Board of Supervisors, to scale back his partnership proposal. Avalos laid out...

Supporters of the non-agency residential MBS market will have plenty of heavy lifting to do next year, as they face an anticipated increase in volatility for some deals and a continued dominating presence in the broader market by Fannie Mae and Freddie Mac, among a host of challenges. But at least there’s some degree of regulatory certainty for the market now, and it’s likely that opportunities will emerge for savvy investors to snap up some extra yield, according to a consensus of Wall Street analysts who cover the space. Analysts at Fitch Ratings expect to see the continuation of a slow recovery for the non-agency MBS space in 2015. “The recovery in primary U.S. RMBS issuance remains anemic as the industry continues to face challenges including continued government-sponsored enterprise dominance, more attractive financing alternatives such as whole-loan sales, new mortgage regulation, and a weak AAA investor base,” Fitch analysts said in a 2015 outlook piece. Also, despite the industry’s renewed efforts led by the Structured Finance Industry Group to resolve the absence of necessary structural reforms after the financial crisis, progress is...

What do Fannie and Freddie really think of nonbanks? Read their SEC filings.

Seasonal trends hit the GSE single-family mortgage-backed securities business in November, with new issuance of single-family MBS tumbling 15.1 percent from October. A new Inside the GSEs analysis of loan-level MBS disclosures reveals that a sharp 22.0 percent drop in securitization of purchase-money mortgages was the major factor in the November decline. Refinance loans delivered to Fannie Mae and Freddie Mac MBS pools were off a milder 6.8 percent from the previous month. In fact, more than half of Fannie’s MBS flow in November came from refinance loans, the first time since March that purchase mortgages accounted for less than half of the GSE’s business. One sign of the increased refinance share of GSE business ... [with two exclusive charts]

The key factor is that some mortgage originators, the megabanks especially, are keeping conventional loans in portfolio that might otherwise be securitized by Fannie and Freddie.

According to Inside Mortgage Finance, among the top 15 jumbo originators eight are nonbanks.

Rep. Ed Royce of California: "Money coming in from the GSEs should go to the taxpayers instead of a slush fund for ideological housing groups to play around with.”

Jumbo mortgage lending and securitization remained one of the bright spots in the home-loan business during the third quarter of 2014, according to a new Inside Mortgage Finance analysis. A total of $81.8 billion in mortgages exceeding the traditional $417,000 conforming loan limit were produced during the third quarter, up 15.4 percent from the second quarter of 2014. Total mortgage originations were up 11.3 percent over the same period. Total jumbo activity included...[Includes three data charts]

Democrats in Congress and consumer advocates remain concerned about tight underwriting standards for mortgages, particularly due to overlays established by lenders. However, at a hearing this week by a subcommittee of the Senate Committee on Banking, Housing and Urban Affairs, there was a lack of consensus on what causes underwriting overlays. “Instead of matching the creditworthy borrower at the lower end of the distribution with affordable loans, these borrowers are being cut out of the market entirely,” said Sen. Robert Menendez, D-NJ, chairman of the Banking Subcommittee on Housing, Transportation and Community Development. Sen. Elizabeth Warren, D-MA, suggested...