A New York federal judge has given preliminary approval to a $280 million settlement proposed by JPMorgan Chase to investors who claimed they were misled into buying $36.8 billion of non-agency MBS, ending a long-running, consolidated class-action suit. U.S. District Judge Pamela K. Chen granted initial approval late last week to the settlement with investors led by the Public Employees’ Retirement System of Mississippi. The Mississippi pension plan sued...

There are some potential problems with the evolving peer-to-peer lending sector that need to be resolved before ratings can be assigned to the securitization of such assets, according to Standard & Poor’s Ratings Services. To start to get a handle on this emerging sector, it is important to understand P2P companies’ specific strategies and their target demographic of borrowers and investors. “Platform operators in the P2P lending sector are...

Issuers of jumbo mortgage-backed securities could increase their activity in the second quarter of 2014 after two consecutive quarters of suppressed issuance. Pricing for new jumbo MBS has improved, according to industry participants, though many expect issuance to remain constrained. In April, Redwood Trust issued a $346.30 million jumbo MBS that priced at the end of the first quarter. At the end of April, Credit Suisse issued a $271.73 million jumbo MBS, according to rating reports ...

Issuers of non-agency mortgage-backed securities warn that the latest disclosure proposal from the Securities and Exchange Commission could completely shut down issuance of non-agency MBS. Since 2010, the SEC has been working on disclosure requirements for MBS and other structured finance products. The regulator was set to approve a final rule in February that would revise asset-level disclosure requirements under Regulation AB but instead re-proposed a portion ...

The House Appropriations Committee this week approved the FY 2015 Transportation, Housing and Urban Development funding bill, which, among other, things contains a provision prohibiting federal housing agencies from facilitating the use of eminent domain in resolving foreclosure problems. Specifically, the FHA, Ginnie Mae and the Department of Housing and Urban Development would not be allowed to use funds appropriated by Congress to “insure, securitize or establish a federal guarantee” of any mortgage or mortgage-backed security that refinances or replaces a mortgage that has been subject to eminent domain condemnation or seizure by a state, municipality or any other political subdivision of a state. In addition, the bill would prohibit the use of appropriated funds or any receipts or amounts collected under any FHA program to implement the FHA’s new Homeowners Armed with Knowledge (HAWK) program. HUD has proposed to ...

Issuance of mortgage bonds with a Ginnie Mae guarantee fell during the first three months of 2013 as higher FHA costs and all-cash home sales appeared to drive the decline, according to Inside FHA Lending’s analysis of agency data. Ginnie Mae issuers closed the first quarter with MBS issuances totaling $58.2 billion, down 19.0 percent from the fourth quarter of 2013. The drop was steeper on a year-over-year basis, 41.3 percent, data showed. FHA accounted for $30.6 billion of government-backed mortgage securities issued during the period, while VA and Rural Housing Development (Department of Agriculture) accounted for $19.1 billion and $4.1 billion, respectively. Top Ginnie Mae issuer Wells Fargo closed out the first quarter with $12.5 billion, down 28.1 percent from the previous quarter and off 59.9 percent from the same period a year ago. Wells’ volume accounted for ... [1 chart]

Servicers of mortgage debt issued by Ginnie Mae reported a slight uptick in government-backed debt outstanding in the first quarter of 2014 though not enough to cause a ripple in a market that has been generally flat since the end of the third quarter last year, according to Inside FHA Lending’s analysis of Ginnie Mae data. Ginnie Mae servicers reported an increase of 0.9 percent in servicing volume from the fourth quarter of 2013 following a 0.2 percent decline in the prior quarter. Volume, however, increased 7.3 percent in 1Q14 compared with volume a year ago. Servicers ended the first quarter with a total of $1.44 trillion in Ginnie Mae mortgage servicing, up from $1.43 trillion in the fourth quarter. Major banks comprised four of the top five Ginnie Mae servicers. Wells Fargo’s overall servicing portfolio declined to $426.7 billion in the first quarter, down ... [ 1 chart]

A revised-areas map that meets the new definition of “rural area” for U.S. Department of Agriculture housing programs is now available to USDA lenders and borrowers seeking affordable rural-home financing. The map was posted on the USDA Income and Property Eligibility Site on May 6 and users may access it by selecting “single family housing” under the Property Eligibility menu. More details about the changes will be available soon in frequently asked questions guidance, the agency said. The new definition of rural area is contained in the Agricultural Act of 2014 (Farm Bill), which was enacted on Feb. 7 and made changes to federal rural development programs. Among other things, the bill redefined rural areas as those with populations up to 35,000 that are “rural in character” for eligibility in the USDA housing programs. The previous population requirement was less than 20,000 people. The area must be ...

Although the pace of blockbuster servicing deals appears to have slowed, the giants of the mortgage-servicing business continued to leak market share in early 2014. Significantly, there is now just one lender with more than $1 trillion in mortgage servicing. Back in the third quarter of 2005, Countrywide Financial became the first company to amass over $1 trillion in mortgage servicing, and Wells Fargo joined the club by the end of that year. Chase Home Finance became a $1 trillion servicer in the fourth quarter of 2008, shortly after Bank of America took over Countrywide and became the first $2 trillion servicer. But BofA dumped...[Includes two data charts]

Ginnie Mae issuer applications are beginning to slow thanks to declining FHA and VA production, but lenders that play in the space are beginning to wonder whether they should be paying closer attention to the “compare ratios” that measure delinquencies. According to industry advisors, there are new concerns that the Inspector General of the Department of Housing and Urban Development may be expanding its investigation of firms that have significant claims rates on FHA loans. Four years ago, the HUD IG made a big splash when it issued subpoenas to 15 mortgage lenders with unusually high claim rates. Since that announcement, little information on settlements with the 15 has come...