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...

Two rating services in the past month have completed reviews of jumbo mortgage-backed securities issued in 2010 and later. The reviews led to numerous rating confirmations, some upgrades and no downgrades, prompting questions about whether criteria for rating jumbo MBS are too stringent. “I’d guess the rating services internally said ‘never again’ for downgrades,” said one participant in the jumbo MBS market. Officials at Fitch Ratings and DBRS ...

Servicers involved in national settlements are largely in compliance and making progress toward completing their loss-mitigation requirements, according to reports released in the past two weeks. Joseph Smith, the monitor of a settlement involving non-agency mortgage-backed securities that requires JPMorgan Chase to complete $4.0 billion in credited loss mitigation, said that as of the end of 2014, Chase was credited with $3.32 billion in relief ...