Standard & Poor’s earned a split decision this week in its counter-offensive against the federal government’s civil fraud lawsuit filed last year, which the rating agency claims is payback for its August 2011 downgrade of the U.S.’ ‘AAA’ credit rating. The Justice Department in February 2013 filed a $5.0 billion lawsuit against S&P accusing it of knowingly inflating its ratings of residential MBS and collateralized debt obligations to boost its revenue and market share in the years leading up to the 2008 financial crisis. On Tuesday, a federal judge in the U.S. District Court in Santa Ana, CA, denied...

Fannie Mae, Freddie Mac and Ginnie Mae issued a combined $60.2 billion of real estate mortgage investment conduits backed by single-family MBS during the first quarter of 2014, a relatively modest decline of 11.6 percent. New MBS issuance by the agencies fell by 26.2 percent from the fourth quarter of 2013 and was down 59.5 percent from the first three months of 2013. Freddie actually increased...[Includes two data charts]

A sustained decline in GSE refinances, coupled with faltering purchase activity throughout the first quarter, helped contribute to an overall drop in the volume of single-family mortgages securitized by Fannie Mae and Freddie Mac in March. In the first quarter of 2014, Fannie and Freddie combined for $355.8 billion in new single-family securitizations, down 63.7 percent year-to-date.In March, Fannie and Freddie produced just $37.6 billion of single-family MBS, down 15.6 percent from February. It was the lowest monthly volume since January 2009.

Fannie Mae, Freddie Mac and Ginnie Mae saw much lower business volume in both purchase-money mortgages and refinance loans during the first quarter of 2014, according to a new Inside Mortgage Finance analysis and ranking. The agencies securitized a total of $95.9 billion of purchase mortgages during the first three months of the year, down 28.8 percent from the previous quarter. That was a steeper decline than in refinance volume, which slid 24.7 percent from the fourth quarter of 2013. Compared to a year ago, the purchase market continued...[Includes three data charts]

Total consumer complaints to the Consumer Financial Protection Bureau rose 34 percent year-over-year in the first quarter, but gripes about home mortgages fell 29.3 percent from year-ago levels, according to a new analysis by Inside the CFPB, an affiliated newsletter. The strong improvement from last year was driven largely by a 46.8 percent plunge in grievances about loan modifications. But complaints about servicing in general were up 21.4 percent from the first quarter of last year, while the other five mortgage-related categories were lower. Gripes having to do with loan application or other origination-related issues fell 26.7 percent from the first quarter of 2013. The number of gripes that were responded to in a timely manner fell...

Credit officers over the past three months reported an increased demand for non-agency MBS, suggesting that private capital could be flowing more freely through the U.S. housing market, according to a Federal Reserve survey released last week. The Fed’s Senior Credit Officer Opinion Survey on Dealer Financing Terms for March 2014 found little change in the credit terms among the 22 participating institutions, with the exception of securities financing, where nearly one-half of dealers reported a hike in demand for funding non-agency residential MBS. “Dealers assessed...

The jumbo mortgage-backed security market has yet to recover from the spike in interest rates seen nearly a year ago. Investor demand for the securities remains weak, even with the pristine performance of jumbo MBS issued since 2010. Four deals were priced in the first quarter of 2014 for a total of $1.29 billion in issuance, according to Inside Nonconforming Markets. While that was a 56.0 percent increase in issuance compared with ... [Includes two data charts]

Variations on the treatment of extraordinary expenses in jumbo mortgage-backed securities have prompted the rating services to alert investors. A warning on this issue last week by Fitch Ratings follows similar concerns raised by other rating services. Extraordinary expenses in non-agency MBS can be caused by legal claims against the trust, costs associated with a third-party reviews to identify representation-and-warranty breaches, and costs related arbitration, among other issues ...

Bank of America and James Nutter & Co. have agreed to indemnify the Department of Housing and Urban Development to resolve allegations that they failed to perform due diligence in underwriting Home Equity Conversion Mortgage loans. An audit of the HECM program by the HUD Office of Inspector General found that the financial institutions allowed 33 HECM borrowers to take out more than one loan, a violation of program requirements. The program requires borrowers to reside in the mortgaged residence as their principal residence. In addition, borrowers may not have more than one principal residence at the same time. In BofA’s case, one borrower obtained two HECM loans on properties she owned in Massachusetts and Florida, both of which she identified as her principal residence. The HUD OIG said there was sufficient information to alert BofA and the underwriter that ...

Overall FHA production fell significantly in all 50 states in 2013 apparently due to mortgage insurance premium increases and policy changes that made it difficult for even qualified borrowers to obtain an FHA-insured single-family loan. FHA volume by state dropped 27.5 percent in the fourth quarter to $35.8 billion, from $49.4 billion in the previous quarter, with all states showing varying percentages of decline during the period. Year over year, production by state declined by 9.2 percent, data showed. Total FHA originations were $211.3 billion for 2013, with the first quarter ending strongly with $63.7 billion. Production, however, lost steam over the next three quarters. Among the top five FHA states, Virginia suffered the largest quarterly drop, 35.2 percent, in FHA volume. California was the top FHA producer state with $35.2 billion for a ... [2 charts]