The funds participating in the Public-Private Investment Program ended their asset purchases in the fourth quarter of 2012 and generated strong returns on investments in non-agency mortgage-backed securities. While Public-Private Investment Funds can retain their holdings through 2017, most have liquidated their portfolios. Nine funds participating in the PPIP purchased $24.9 billion in MBS, largely vintage non-agency MBS along with some commercial MBS. At the end of the ... [Includes one data chart]

Wall Street raised no objections to a Ginnie Mae proposal to consolidate its two mortgage-backed securities programs, indicating the move would be good for securitization and result in other positives. However, there appeared to be no consensus among players on how to get there. Representatives of Ginnie Mae and the Securities Industry and Financial Markets Association met early this month to discuss the agency’s proposal. Analysts agreed it is far too early in the game to discern a clear path towards a single Ginnie Mae MBS program and that implementation is likely years away. Nevertheless, there were ...

Ginnie Mae servicers reported a small increase in servicing volume during the first three months of 2013, with Ocwen Loan Servicing posting the largest gains from last quarter and from a year ago. Servicers held a total of $1.33 trillion in government-backed mortgage debt outstanding at the end of the quarter, up a notch from the fourth quarter and 8.2 percent more than the total Ginnie Mae servicing debt a year ago. Though Ocwen was fifth in the ranking with $36.08 billion, its servicing volume was up more than 1000 percent both from the last quarter and from the same period last year. Among the top Ginnie servicers, only ... [One chart]

A top official of the Department of Housing and Urban Development said the agency is as concerned as Congress and the industry about mortgages seized through the power of eminent domain and will not refinance any mortgage taken in this manner. Testifying at a recent hearing before the House Financial Services Subcommittee on Housing and Insurance, Charles Coulter, deputy assistant secretary for housing, said FHA leadership is very much concerned about the idea of seizing troubled mortgages held in private-label securitizations under the power of ...

The long-awaited boom in nonperforming loan sales may finally be here, as megabanks such as Wells Fargo, Citigroup and HSBC have begun testing investor appetites by offering large packages in the open market. According to investors and advisors who play in the space, Wells recently auctioned off an $800 million NPL package and HSBC sold a $750 million portfolio. Recently, Popular Bank said that it entered...

Banks and thrifts saw another drop in their MBS holdings in the first quarter of 2013 despite holding their own against the Federal Reserve’s voracious appetite for agency MBS. A new Inside MBS & ABS analysis of bank and thrift call reports reveals that industry investment in residential MBS fell 1.1 percent during the first quarter of 2013 to $1.562 trillion. That was down 4.4 percent from the record $1.634 trillion of MBS held in portfolio by banks and thrifts at the end of the first quarter of last year. Banks reported...[Includes two data charts]

Security issuers, investors and the rating services largely praised unsolicited rating requirements established by the Securities and Exchange Commission in 2010, but they had different views on how the rules should be changed. “Rating agency information arbitrage has been eliminated,” Kevin Duignan, global head of structured finance at Fitch Ratings, said of the SEC’s Rule 17g-5, which established unsolicited rating standards. “We’re all getting the same information and we know we’re getting the same information.” Rule 17g-5 requires...

Investors are paying more for vintage non-agency MBS with repurchase disputes and pending settlements than securities not involved in representation and warranty litigation, according to analysts at Amherst Securities Group. The increased pricing comes as the proposed $8.5 billion settlement on non-agency MBS issued by Countrywide Financial nears its conclusion. In the past year, pricing on non-agency MBS involved in rep and warrant litigation outperformed securities not subject to such lawsuits, according to Amherst. “It appears these securities received different treatment, as investors likely included recovery cash flows, and priced the bonds accordingly,” the analysts said. As an example, Amherst pointed...

Ginnie Mae officials are moving ahead to create a blueprint for consolidating its two MBS programs, although some industry experts say the proposal could cost investors $5.5 billion. The agency got considerable backing from a variety of stakeholders for its “straw man” proposal to shift to a single MBS program based on the existing Ginnie II, said John Getchis, senior vice president in Ginnie’s capital markets office. “We got...

Ginnie Mae has proposed revising its buyout policy to eliminate inconsistencies in servicers’ repurchase practices and to discourage early buyouts of seriously delinquent loans from Ginnie MBS. Under the current policy, Ginnie Mae issuers may buy out delinquent loans if the borrower fails to make any payment for three consecutive months. However, many issuers have been applying the policy inconsistently, according to Michael Drayne, senior vice president for issuer and portfolio management at Ginnie Mae. Some servicers have been interpreting...[Includes one data chart]