Fannie Mae and Freddie Mac combined did less business in single-family mortgage-backed securities in 2013 than the previous year while a growing share of business came from small and mid-sized lenders, according to an Inside The GSEs analysis. For the year, the two GSEs produced $1.161 trillion in single-family MBS, down 8.4 percent from their overall production in 2012.

The statute of limitations for filing representation-and-warranty claims on non-agency MBS starts when a deal is issued, not when a defective loan isn’t cured, according to a recent ruling by the appellate court in New York. Industry analysts suggest that the ruling will limit rep-and-warrant claims on vintage non-agency MBS as well as future claims on recently issued jumbo MBS. In December, the appellate division of New York’s Supreme Court dismissed ACE Securities Corp. v. DB Structured Products. The lawsuit was brought by a trustee on behalf of investors against Deutsche Bank, the issuer of ACE 2006-SL2, a non-agency MBS issued in 2006. The investors, along with HSBC Bank, the trustee, were looking to enforce rep-and-warrant claims in 2012. New York imposes...

Banks with the capacity to hold jumbo mortgages in portfolio were major contributors to jumbo mortgage-backed securities issued in 2013, according to a new ranking and analysis by Inside Nonconforming Markets. Fixed-rate mortgages also dominated the population of loans bundled into jumbo MBS last year. First Republic Bank was the biggest originator of securitized jumbos in 2013, with a market share more than double the next closest lender. Some $2.16 billion in originations from [Includes two data charts]

A commercial MBS issued in late December that received AAA ratings from Fitch Ratings and Standard & Poor’s wouldn’t have been rated higher than A1 by Moody’s Investors Service. Moody’s said the $375 million RBS Commercial Funding Inc. 2013-GSP Trust lacked structural support to obtain the highest ratings. The deal was a single-asset transaction without subordinate classes to absorb expenses that the trust can’t pass along to the borrower. “In cases where a subordinate class is not present to protect highly rated senior investors, some other feature, such as a reserve fund, has been employed to mitigate the risk,” according to Daniel Rubock, a senior vice president at Moody’s. “The GSP Trust lacks any such structural mitigant.” Fitch said...

Nationally-recognized credit-rating agencies continue to show improvements in certain problem areas despite new concerns raised by federal examiners in their latest review, according to a Securities and Exchange Commission staff report. The SEC’s 2013 credit-rating agency examinations found deficiencies in eight key areas, particularly in the credit-rating agencies’ internal controls. Examiners stopped short of branding their “essential findings” as “material regulatory deficiencies,” although the SEC may do so in the future and require stronger corrective action, the report noted. Based on the latest exams, the SEC’s Office of Credit Ratings found...

Declining refinance volume contributed to a marked decline in the GSEs’ overall business at the end of 2013 as Fannie Mae and Freddie Mac posted big declines in business on a quarterly and total 12-month basis, according to a new Inside The GSEs analysis. Fannie and Freddie issued $182.2 billion in new single-family mortgage-backed securities during the three-month period ending Dec. 31, 2013, a two-year low.

A continued decline in GSE refinance activity helped contribute to an overall dip in the volume of single-family mortgages securitized by Fannie Mae and Freddie Mac in November, according to a new Inside The GSEs analysis. Fannie and Freddie issued $58.7 billion in single-family mortgage-backed securities in November, a 13.4 percent decline from October and a 6.2 percent decrease for the first 11 months of 2013.

Underwriting standards for loans in commercial MBS are loosening due to competition among issuers for volume, according to industry analysts. Issuers have also removed loans from two recent commercial MBS transactions due to pressure to come to the market quickly. “Increasing competition among commercial MBS loan originators raises the risk that they will further lower underwriting standards from the more stringent practices used in early second-generation commercial MBS 2.0 deals,” said Tad Philipp, director of commercial real estate research at Moody’s Investors Service. Analysts at Fitch Ratings said...

A Manhattan federal court this week approved a proposed settlement between Residential Capital and the Federal Housing Finance Agency that both clears the way for the former conduit to exit bankruptcy and brings the FHFA one step closer to completing its massive legal action against some of the nation’s top financial institutions.Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York approved the agreement, which is tied to a settlement the FHFA reached with Ally Financial, ResCap’s former parent, in late October.

Mortgages originated by brokers and correspondents, once a concern for MBS investors, have actually performed better in recent years than retail-originated loans, according to Moody’s Investors Service. The rating service said risks from third-party originations will remain low if lenders continue to put an emphasis on retail-originated mortgages. Default rates on securitized mortgages have decreased significantly in recent years regardless of origination channel. However, Moody’s noted that beginning in 2010, production from third-party originators started performing better than retail mortgages. From 2003 through 2009, third-party originations defaulted...