Credit Suisse recently filed notice with the Securities and Exchange Commission, stating that it now owns 5.4 percent of Chimera Investment Corp., a real estate investment trust whose forte is buying residential MBS. However, the investment comes at a time when a cloud is hanging over the REIT sector, especially MBS investing firms such as Chimera. Moreover, Chimera’s stock has been stuck at about $3 a share the past 16 months, mostly because it’s still wading through earnings restatements and has not been a timely filer of quarterly and annual reports with the SEC. As the company noted in one regulatory filing: “Our failure to be...

Three House Democrats have added their own proposal to the growing list of legislative housing finance reforms that, in time, could pave the way for the government to sell off Fannie Mae and Freddie Mac while giving new purpose to the Federal Housing Finance Agency. The reform proposal by Reps. John Delaney (MD), John Carney (DE) and Jim Himes (CT) would establish a system of government reinsurance for eligible mortgage-backed securities. The idea is to leverage the government’s capacity and the market’s ability to price risk, they said.

Fannie Mae and Freddie Mac should revise their seller/servicer guidelines to allow use of credit scores from more than one provider in order to “foster competition,” according to a bipartisan quartet of House Financial Services Committee members. In a letter sent to Federal Housing Finance Agency Director Mel Watt, Reps. Ed Royce, R-CA; Spencer Bachus, R-AL; James Himes, D-CT; and Carolyn Maloney, D-NY, said that the GSEs should not be restricted to relying on credit scores provided solely by the Fair Isaac Corp.

Fannie Mae and Freddie Mac combined did less business in single-family mortgage-backed securities in 2013 than the previous year while a growing share of business came from small and mid-sized lenders, according to an Inside The GSEs analysis. For the year, the two GSEs produced $1.161 trillion in single-family MBS, down 8.4 percent from their overall production in 2012.

Some of the largest bank owners of mortgage servicing rights are lining up to sell small- and medium-sized chunks of their portfolios in what likely will turn out to be a record year for sales. Bank of America – which unloaded several huge packages last year – is now in the market with an $8 billion Ginnie Mae MSR portfolio. Wells Fargo late this week confirmed that it will sell a $39 billion package of servicing rights backed by non-agency loans to Ocwen Financial Corp., and hinted that more deals are ahead. An industry advisor who works the servicing market told...

Three House Democrats plan to introduce a new housing-finance reform bill that would leverage the Ginnie Mae mortgage-securitization infrastructure and private mortgage insurers. The reform proposal by Reps. John Delaney (MD), John Carney (AL) and Jim Himes (CT) would establish a system of government reinsurance for eligible mortgage-backed securities. The idea is to leverage the government’s capacity and market’s ability to price risk, they said. Their plan calls...

The statute of limitations for filing representation-and-warranty claims on non-agency MBS starts when a deal is issued, not when a defective loan isn’t cured, according to a recent ruling by the appellate court in New York. Industry analysts suggest that the ruling will limit rep-and-warrant claims on vintage non-agency MBS as well as future claims on recently issued jumbo MBS. In December, the appellate division of New York’s Supreme Court dismissed ACE Securities Corp. v. DB Structured Products. The lawsuit was brought by a trustee on behalf of investors against Deutsche Bank, the issuer of ACE 2006-SL2, a non-agency MBS issued in 2006. The investors, along with HSBC Bank, the trustee, were looking to enforce rep-and-warrant claims in 2012. New York imposes...

Agency single-family MBS issuance continued to decline as 2013 came to a close, with production in December dropping to just $75.77 billion – the lowest monthly total since July 2011, according to a new Inside MBS & ABS ranking and analysis. Agency MBS production declined steadily last year after peaking in April. For the year, total issuance was down 7.1 percent from 2012, and issuance plummeted 34.1 percent from the third to the fourth quarter. The biggest factor in the decline was...[Includes two data charts]

The long-anticipated final implementation of the so-called Volcker rule this spring will have a limited impact on securitized products, according to a recent report by Barclays. A requirement of the Dodd-Frank Act to prohibit banking entities from engaging in proprietary trading and making investments with private-equity funds and hedge funds, the Volcker rule was finalized by five federal regulators last month and becomes effective April 1, 2014. Banks should expect...

Ginnie Mae is helping Japan and Russia as they shift from antiquated secondary mortgage market structures to ones modeled after the agency’s successful securities program. On Jan. 9, Ginnie Mae President Ted Tozer and President Shinya Shishido of the Japan Housing Finance Agency signed a joint memorandum of understanding to exchange information and facilitate discussions regarding Japan’s plan to adopt a Ginnie Mae-style securitization program. Japanese Prime Minister Shinzo Abe has directed...