Real estate investment trusts that specialize in the MBS market saw another decline in the industry’s aggregate holdings during the first quarter, although the trends varied considerably among different institutions, according to a new Inside MBS & ABS analysis of REIT earnings reports. A group of 16 publicly traded mortgage REITs held a combined portfolio of $345.9 billion of MBS as of the end of March, down 3.8 percent from the previous quarter. That was still 16.3 percent higher than year-ago levels, but REIT MBS holdings peaked in the third quarter of last year, just as the Federal Reserve launched the third round of its quantitative easing program. The vast majority of REIT mortgage securities holdings, 95.4 percent, were...[Includes one data chart]

Shellpoint Acceptance Corp. hopes to come to market with its first non-agency MBS by summer, securitizing not only jumbo loans, but a host of mortgages that fall outside Fannie Mae and Freddie Mac underwriting guidelines for different reasons. According to a recent filing with the Securities and Exchange Commission, the company has committed $2 billion in capital to its shelf registration, though its first deal will be smaller than that. Shellpoint refers...

Real estate investment trusts are beginning to scale back their investments in MBS. Meanwhile, some are hunting for MSRs.

Risk-sharing transactions using credit-linked notes may be one path toward the goal of getting the government-sponsored enterprises out of conservatorship, experts told members of the Senate Banking Subcommittee on Securities, Insurance and Investment this week. The current GSE MBS market provides trillions of dollars of financing to the mortgage market while government guaranties and other structural features are required to maintain this market, according to Andrew Davidson, president of Andrew Davidson & Co. “As any part of GSE reform, I believe...

The Federal Reserve’s MBS purchase party isn’t over – yet – but it looks like the nation’s central bank is getting nearer to the last call. Late last week, the Wall Street Journal reported that officials at the nation’s central bank have developed a strategy for dialing back their unprecedented level of support of the housing market. The plan involves reducing the amount of bonds the Fed buys “in careful and potentially halting steps,” the WSJ said, with the purchases varying on the read officials have of the job market and of inflation. And although the timing of the Fed’s wind-down is...

Exactly one year after it filed for bankruptcy, Residential Capital announced this week it has entered into a “comprehensive plan support agreement” with its parent, Ally Financial, and ResCap’s creditors, who say they are owed some $25 billion in mortgage liabilities. The plan gets Ally out from under the threat of billions of dollars in lawsuits by settling all existing and potential claims between Ally and ResCap and all potential claims held by third parties related to ResCap that could be brought against Ally and subsidiaries that are not Chapter 11 debtors. The settlement, which is subject to approval by a federal bankruptcy court in Manhattan, fully releases...

Since the housing bust, the Federal Reserve has purchased roughly $1.1 trillion of MBS backed by Fannie Mae, Freddie Mac and Ginnie Mae.

Shellpoint Partners received approval last week for a $2 billion shelf registration from the Securities and Exchange Commission, paving the way for the company to issue non-agency mortgage-backed securities. “Funding the shelf with substantial capacity shows our commitment to bringing urgently needed private capital back into the housing market,” said Saul Sanders, co-CEO of ShellPoint. “We intend to be a significant issuer of new issue residential MBS and help define the new market standards and ...

Although Redwood Trust’s soup-to-nuts approach to representations and warranties has dominated the fledgling recovery in jumbo mortgage-backed securities issuance, some experts think a shorter term alternative may gain popularity among issuers. It’s important for investors and rating services to anticipate putbacks in jumbo MBS, Peter Sack, a managing director at Credit Suisse, said during a panel session at the recent secondary market conference sponsored by the Mortgage Bankers Association ...

Issuers of non-agency mortgage-backed securities should disclose when they seek a rating from a firm and ultimately decide not to hire the firm, according to a variety of non-agency participants. “If one rating is 7 percent subordination and the other is 15 percent, we don’t need to accept the 15 percent subordination, but we do need to disclose the 15 percent subordination opinion to investors,” Martin Hughes, CEO of Redwood Trust, said this week at a roundtable hosted by the Securities and Exchange Commission ...