Redwood Trust’s four non-agency mortgage-backed securities – the latest of which was issued last week – have been generally well received by MBS investors. However, some investors, potential issuers and even the rating services have raised concerns regarding the non-agency MBS ratings process, both for Redwood and for other potential securitizers. A senior official at one of the rating services suggested to Inside Nonconforming Markets that ratings shopping is still occurring, and that the Redwood deals have been rated by the firms with the lowest credit-enhancement requirements ...

Firms participating in the Public-Private Investment Program with a focus on non-agency mortgage-backed securities all took losses in the fourth quarter of 2011 compared with the previous quarter, according to an analysis by Inside Nonconforming Markets. The Oaktree PPIP Fund – which only invests in commercial MBS – was the only public-private investment fund to increase its net internal rate of return since inception in the fourth quarter of 2011, Treasury Department data show. The Treasury cautioned that it is ... [Includes one data chart]

Investors have expressed a keen interest in programs that would facilitate bulk sales of real estate-owned properties. However, few are optimistic that such a program will come to fruition. Based on cost figures provided by Carrington Holding Company, Vincent Fiorillo, a portfolio manager at DoubleLine Capital, suggested investors could easily earn returns of 9.0 percent by renting REO properties. “This is a very attractive alternative investment opportunity,” Fiorillo said at the American Securitization Forum’s ASF 2012 conference last week in Las Vegas ...

A settlement involving major servicers and state attorneys general could be close, as state AGs have until Feb. 6 to agree to a potential $25 billion settlement. Negotiations on the settlement have dragged on for 15 months and were previously slated to end Feb. 3. Ally Financial, Bank of America, Citigroup, JPMorgan Chase and Wells Fargo would reportedly be included in the settlement. Some $17 billion in penalties paid by the banks would go toward principal reductions, $5 billion would go toward a reserve account that would ... [Includes three briefs]

Beginning this month, Ginnie Mae will start assigning alphanumeric IDs for mortgage-backed securities pools because it may soon run out of available pool numbers. In a recent alert to issuers, Ginnie Mae said alphanumeric pool numbers will be assigned first to fixed-rate types. However, issuers must make sure they have used up all their assigned pool numbers before asking for the new letter/number codes. Ginnie Mae advised issuers in 2009 to have their systems ready to accept alphanumeric IDs by March 2010. Meanwhile, MountainView Servicing Group has announced its offering of ...

MBS and ABS markets in the U.S. are increasingly being shaped by global forces, from the impact of the European debt crisis to the worldwide adoption of new international regulatory standards and the surge in Euro securitizations that’s taking up some of the slack from the depressed U.S. non-agency MBS sector. There was an unmistakable international flavor to the ASF 2012 conference sponsored by the American Securitization Forum in Las Vegas this week. A significant number of the more than 5,000 attendees – an ASF record – came from outside the U.S., and numerous panels were devoted to global issues...

The U.S. residential housing market used to provide the lion’s share of business for non-agency asset securitization, but experts at this week’s American Securitization Forum say it will take years for the sorely damaged housing market to recover and the nationalized mortgage finance system to be overhauled. Supply and demand fundamentals in the housing market are severely broken, said Laurie Goodman, senior managing director at Amherst Securities Group. There are some 2.9 million borrowers in foreclosure or more than 12 months delinquent, plus another 400,000 units of real estate-owned properties. With...

New issuance of non-mortgage ABS increased by 15.8 percent from 2010 to 2011, according to a new Inside MBS & ABS ranking and analysis. But it was a rebound from a record low level, and the market is less than half the amount typically produced before the financial market collapse in 2008. A total of $126.8 billion of non-mortgage ABS were issued in the U.S. last year, and over half of that amount was in the auto ABS sector. Securities backed by loans and leases to vehicle users rose 22.4 percent from 2010 levels, although the sector was down slightly in the fourth quarter. Overall...(Includes two data charts)

Officials at the Federal Reserve signaled this week the bank will maintain its current level of market support for Fannie Mae, Freddie Mac and Ginnie Mae debt and MBS to help keep long-term interest rates for mortgages and other products at historic lows. The housing market remains mired in a lackluster recovery, shackled by massive foreclosures and a huge overhang of unsold inventory, despite all the unconventional support the Fed has bent over backwards to provide. During its meeting this week, the Federal Open Market Committee decided to maintain its “highly accommodative stance for monetary...

With a price tag of $100 billion required to forgive the principal of underwater Fannie Mae and Freddie Mac mortgages, the best bet for the government-sponsored enterprises and for taxpayers is for the GSEs to pursue a policy of principal forbearance, the Federal Housing Finance Agency said. This week, the FHFA released its analysis conducted in 2010 following numerous requests and an eventual threat of subpoena by House Democrats. The agency’s number crunchers found that “principal reduction never serves the long-term interest of the taxpayer when compared to foreclosure.” As of June 30, 2011, Fannie and Freddie...