The available supply of residential MBS grew marginally during the fourth quarter of last year as the agency market grew enough to offset the ongoing decline in outstanding non-agency MBS, according to a new analysis by Inside MBS & ABS. The supply of single-family agency MBS increased by $48.1 billion during the fourth quarter, a 0.9 percent increase over the three-month period. The Federal Reserve gobbled up all the increase and then some; its total agency MBS holdings rose by $91.6 billion during the fourth quarter, an 11.0 percent increase from the previous period. Mutual funds appeared to hold...[Includes two data charts]

Mary Jo White, the nominee to chair the Securities and Exchange Commission, said this week that enforcement actions against Wall Street firms and implementation of rules relating to credit ratings will be two of her many priorities if she is confirmed as head of the SEC. Industry analysts suggest that the Senate will easily confirm her nomination. “At the SEC, there’s no institution too big to charge,” White said at a hearing this week by the Senate Committee on Banking, Housing and Urban Affairs. The comment was...

The U.S. Supreme Court last week unanimously decided a securities fraud case that could cause the Securities and Exchange Commission to act sooner rather than later in bringing enforcement actions against MBS fraud. In Gabelli et al. v. Securities and Exchange Commission, SCOTUS ruled that in an SEC action to recover civil penalties, the five-year statute of limitations begins ticking when the fraud occurs, not when it is discovered. Reversing an opinion by the U.S. Court of Appeals for the Second Circuit, SCOTUS rejected...

Redwood Trust recently came to market with a $287.5 million convertible debt offering which was snatched up by investors – a sign that not only is the real estate investment trust doing well with its jumbo securitization business, but other mortgage issuers might meet similar results if they need to borrow money in the capital markets. Mike McMahon, a managing director at the company, told Inside MBS & ABS that the jumbo issuer decided to tap the debt market as “a way to support our investment activity for 2013. If we securitize $7 billion and retain the subs, we will need capital.” Redwood hopes...

A number of significant former members of the American Securitization Forum are working to form a new trade group, with a formal announcement possible as soon as this week. Meanwhile, Tom Deutsch, executive director of the ASF, said his group continues to work with more than 300 members. As many as 30 firms could be a part of a new securitization trade group, with the name “Structured Finance Industry Group” being considered. Wells Fargo has confirmed that it will be a member of the new group. Other firms that recently quit the ASF’s board or otherwise ended their membership with the ASF include...

An Alt A MBS investor won a court order temporarily restraining Nationstar Mortgage from auctioning off nonperforming loans from its MBS pools, a development that could result in a legal precedent being established on the practice, if it’s not already too late to matter. Back in February, Nationstar began auctioning NPLs on auction.com, according to a civil complaint filed by the investor, KIRP LLC, in the Supreme Court of New York. There are currently two additional auctions totaling some $750 million of NPLs listed on the internet auction site, both believed to be related to Nationstar. The company is...

Credit Suisse issued a $422.2 million non-agency jumbo mortgage-backed security last week with some of the loans in the private placement sourced from Two Harbors Investment. Two Harbors – a real estate investment trust that has been working to issue its own non-agency MBS for more than a year – is also expected to be the initial investor in the subordinate tranche of the MBS. CSMC Trust 2013-TH1 received AAA ratings from DBRS, Fitch Ratings and Standard & Poor’s, with 7.05 percent credit enhancement ...

Fannie Mae and Freddie Mac have been content to let their significant holdings of non-agency mortgage-backed securities run off in recent years as opposed to selling the investments at a loss. However, the government-sponsored enterprises will likely have to sell some of their vintage non-agency MBS due to a mandate from the Federal Housing Finance Agency. A set of goals for the GSEs in 2013 released this week by the FHFA includes reducing the GSEs’ retained portfolio balances by selling 5 percent of the assets ...

The Department of Housing and Urban Development said it will share information soon on the estimated impact of mandatory, across-the-board spending cuts on HUD/FHA programs and their recipients. A HUD spokesman declined to put a sequestration tag on all affected programs, including FHA, saying details would be available as soon as the department notifies all HUD funding recipients of automatic spending cuts that went into effect last week. The mandatory cuts to defense and discretionary spending kicked in after Congress failed to enact a plan to reduce the deficit by $1.2 trillion over 10 years, as required by ...

Banks with major Ginnie Mae portfolios – and even smaller firms – increased their purchases of delinquent mortgages out of MBS pools in the fourth quarter compared to the third as a way to save money and refinance troubled loans. According to an analysis by Inside FHA Lending, the top 50 Ginnie Mae issuers bought $12.65 billion of problem loans out trusts in fourth quarter compared to $11.17 billion in the third, an increase of 13 percent. “Once you buy the loan it goes into your portfolio,” said Tim Rood, a partner in The Collingwood Group, a Washington-based advisory firm. “You can try to re-perform it and then re-securitize it,” he said. Wells Fargo, the largest Ginnie Mae servicer in the nation with a portfolio of $412 billion, purchased ... [1 chart]