Activity in the non-agency MBS market involving nonperforming loans and re-performing loans is expected to continue to flourish through at least the end of this year, according to industry analysts. Vintage mortgages in scratch-and-dent deals accounted for 42.0 percent of the non-agency MBS issued in the first half of 2015, according to the Inside Mortgage Finance MBS Database. The $15.60 billion in scratch-and-dent volume included a mix of nonperforming loans and re-performing loans. Issuance of non-agency MBS backed by NPLs and RPLs through two quarters this year equaled...

A bipartisan pair of lawmakers from the House of Representatives found fault with the Obama administration this week for not making housing finance and reform of the government-sponsored enterprises a priority. Failing that, they’re not certain there would be enough support from both sides of the aisle to get a comprehensive bill pushed through the pipeline and signed by the president. “I don’t think the White House has sent a positive signal about participating in this process,” said Rep. Randy Neugebauer, R-TX, during a housing finance reform discussion in Washington, DC, this week sponsored by the Bipartisan Policy Center. “It’s such a big lift. You need to make sure that if you’re going down that road, that you have the opportunity to accomplish something.” His colleague, Rep. John Delaney, D-MD, agreed...

In the eyes of some Federal Reserve watchers, Fed chief Janet Yellen has become a master of making every public appearance a bit of a Rorschach test, giving fans and critics alike just enough of what they want to hear to reinforce their pre-existing viewpoints. Her semi-annual Humphrey-Hawkins testimony on Fed monetary policy before Congress this week was another prime example of this, with Wall Street types hopeful of a rise in interest rates sometime later this year, and contrarians increasingly unconvinced and dismissive. For instance, labor markets are showing...

Depository institutions – along with the top tier of companies that service loans pooled in mortgage-backed securities by Fannie Mae, Freddie Mac and Ginnie Mae – continued to pull back from the market during the second quarter of 2015, according to a new Inside Mortgage Finance analysis. Commercial banks, thrifts and credit unions serviced a total of $3.218 trillion of mortgage servicing rights connected with agency MBS as of the end of the second quarter. That was down 6.9 percent from the first quarter of 2015. Although depositories remain the dominant force in the agency MSR market, accounting for 64.2 percent of servicing on outstanding single-family MBS, nonbanks continued...[Includes four data tables]

For mortgage companies that were hoping to go public this year, they might as well forget about it. As one industry analyst put it: “The IPO market isn’t even on life support. It’s just plain dead.” Although many privately held mortgage firms are enjoying a strong year in both lending and profitability, the initial public offering market is dormant for three reasons: Nationstar Mortgage, Ocwen Financial and Walter Investment Management Corp. This year, the once “big three” nonbanks have paid...

Originations to first-time homebuyers perform worse than originations for repeat buyers, with the differences tied to factors beyond solely whether the borrower is a first-time homebuyer, according to new research from the Federal Housing Finance Agency. In a working paper published late last week, Saty Patrabansh, a senior economist at the FHFA, determined that the difference in performance between the first-time homebuyers and repeat buyers can be attributed to differences in the distributional make-up of the two groups and not to the premise that first-time homebuyers are an inherently riskier group. He analyzed...

Estimating where MBS prices might be headed has never been an easy game – and thanks to the debt crisis in Greece and a stock meltdown in China, it’s become a whole lot more difficult of late. But for now, analysts and market watchers are certain of one thing: MBS prices have been volatile the past two weeks thanks to a flight to quality, forcing investors everywhere to buy U.S. Treasuries. And because mortgages track Treasuries, yields have fallen and prices have increased. “The Greek crisis already has taken...

The enormous amount of capital flowing into the commercial real estate financing industry is the biggest factor that has shaped the market in recent years, according to Brian Stoffers, global president at CBRE Capital Markets. “It’s recognized as a good place to be if you’re an asset allocator, and it’s recognized as an institutional play with growth opportunities and cash flow,” he said speaking on a recent real estate panel in Miami. “So that kind of capital flow has driven [capitalization] rates lower.” Commercial real estate lending levels are exceeding...

With interest rates expected to increase at some point in the future, federal regulators continue to raise concerns about mortgage-related interest rate risk for banks. The risk perspective report issued last week by the Office of the Comptroller of the Currency was the sixth-consecutive semi-annual report from the federal regulator to warn about the risks posed to small banks by holdings of agency mortgage-backed securities. “Material concentrations in MBS could make...

No matter how cleverly hidden, the Securities and Exchange Commission can eventually ferret out bad business practices – a costly lesson learned by AlphaBridge Capital Management. The SEC ordered AlphaBridge, a registered hedge-fund adviser, and two of its principals to pay a $5 million penalty for allegedly inflating the prices of illiquid MBS held in hedge-fund portfolios managed by the firm. The SEC charged...