A modest decline in FHA endorsements of jumbo loans in the fourth quarter of 2012 could presage further declines this year, following the Department of Housing and Urban Developments recent proposal to raise the downpayment requirement to 5 percent, from 3.5 percent, for loans above $625,500. The FHA already has raised its jumbo mortgage insurance premiums to 1.55 percent annually and increased the monthly premiums on new, non-jumbo FHA mortgages by 10 basis points. The agency retained the 3.5 percent downpayment for new forward mortgages below $625,500. The increased premiums are ... [2 charts]
In 2010 and 2011, the government-sponsored enterprises purchased billions of dollars of delinquent mortgages out of mortgage-backed securities trusts to save money. Now it appears that Fannie Mae, followed by Freddie Mac, will test the waters to see how much they can get for their nonperforming loans in the secondary market. Investment bankers and loan sale advisors familiar with the matter told Inside Mortgage Finance that Fannie could come to market with a multi-million package of residential NPLs before the end of the first quarter. Fannie, two sources confirmed, has hired...
Moodys Investor Services ranked as the top rating service in non-mortgage ABS ratings during 2012, according to a new Inside MBS & ABS ranking. DBRS was the leader in rating non-agency MBS transactions last year. In a market that grew by 15.9 percent in 2012, Moodys increased the volume of ABS deals it rated by just 6.9 percent over its activity back in 2011. Still, the company edged past Fitch Ratings with a 64.9 percent market share even though it mostly sat out the booming credit card sector. Moodys had its highest penetration rates in business loan ABS and was well represented in student loan and vehicle finance securitizations. Fitch had...[Includes two data charts]
Officials in the financial services sector are making a fresh push to alert the mortgage and residential mortgage-backed securities industries to the potential pitfalls that delinquent homeowner association accounts pose for them. The securitization industry has little understanding of homeowner and other types of community associations, collectively referred to as HOAs, said Jason Serrano, co-head of structured products and managing director for securities at Oak Hill Advisors ...
Ever since Taylor Bean & Whitaker went down in flames a few years ago, the market for loans backed by mortgage servicing rights has been dormant with the nations largest banks pulling out of the business and vowing never to return. But now that MSRs are considered a hot investment with nonbanks such as Nationstar Mortgage, Ocwen Financial and Walter Investment Management gobbling up billions of dollars in receivables the past few years and at bargain basement prices banks, Wall Street firms, and other players are eyeing the market for a major comeback. According to servicing advisors and warehouse firms, there are...
The Department of Justice filed a civil action in Los Angeles this week against Standard & Poors Rating Services and its parent the McGraw-Hill companies for $5 billion, accusing S&P of defrauding investors by falsely representing that its ratings on certain collateralized debt obligations were objective, independent and unencumbered by any conflicts of interest. The Justice Departments complaint alleges that S&P knowingly and with the intent to defraud, devised, participated in, and executed a scheme to defraud investors in its ratings of trillions of dollars of residential MBS and CDOs between 2004 and 2007. DOJ contends...
The securitization industry has successfully shot down high-profile attempts in San Bernardino County, CA, and in Chicago to use eminent domain to seize underwater, performing mortgages, write them down to fair market value and repackage them for sale to other investors. However, theyre not letting their guard down, as similar efforts continue in a number of other local jurisdictions throughout the country most notably Brockton, MA, and Salinas, CA. In Brockton, the City Council recently voted 9-2 in favor of setting up a working group to further explore the concept. It also voted to invite a handful of local community activists and city officials, as well as a representative from Mortgage Resolution Partners the architect of the proposal to appear before the finance committee. The issue on their agenda is...
Issuers, investors and even regulators agree that underwriting standards for non-agency mortgage-backed securities will have to loosen for the sector to grow. We have to start moving down the credit spectrum, said Sharif Mahdavian, a director and analytical manager of residential MBS at Standard & Poors. Speaking at the American Securitization Forums ASF 2013 conference last week in Las Vegas, he said non-agency originations could easily move from shocking prime to ...
The investment period for the remaining funds participating in the Public-Private Investment Program ended during the fourth quarter of 2012, with four funds exiting the program during that time. The Treasury Department said it earned a profit from the PPIP, which focused on investment in non-agency mortgage-backed securities, and most of the individual funds also turned significant profits. Our ability to aid in the stability of the MBS market and deliver solid investment ... [Includes one data chart]
Assured Guaranty won a lawsuit this week against Flagstar Bank regarding a breach of representations and warranties on more than $900 million in non-agency mortgage-backed securities issued by Flagstar. Industry analysts suggest the ruling is significant as it is one of the first in favor of bond insurance companies trying to enforce breaches of reps and warrants, and U.S. District Judge Jed Rakoff endorsed many of the tactics they have used to seek buybacks, including ... [Includes two briefs]