The volume and market share of non-agency jumbo mortgage-backed security issuance increased significantly in 2012 compared with other post-crisis years. However, volume remains well below activity seen even before the 2005 boom in non-agency MBS issuance. Some $3.46 billion in non-agency jumbo MBS were issued last year, according to the Inside Mortgage Finance MBS Database, more than four times the volume issued in 2011. Redwood Trust issued six deals last year totaling ... [Includes one data chart]

After including a significant amount of ARMs in its first deal of 2013, Redwood Trust relied largely on 30-year fixed-rate mortgages for its second non-agency jumbo mortgage-backed security of the year, according to presale reports released this week. The $666.13 million Sequoia Mortgage Trust 2013-2 is set to receive a triple-A rating with characteristics largely similar to other recent issuance from the real estate investment trust. While ARMs accounted for 21.0 percent of the dollar volume of SEMT 2013-1 ...

Fannie Mae and Freddie Mac combined did more business in single-family mortgage-backed securities issuance in 2012 than in any year since 2003, with a growing share of their business coming from small and mid-sized lenders, according to an Inside The GSEs analysis. The two GSEs pumped out a staggering $1.266 trillion in new single-family MBS in 2012, a 48.1 percent increase over their total production in 2011. It marked the biggest annual output by Fannie and Freddie since the all-time record of $1.912 trillion nine years earlier.

The federal judge in charge of overseeing the multiple lawsuits filed by the Federal Housing Finance Agency against non-agency mortgage-backed securities issuers for allegedly misrepresenting deals that were sold to Fannie Mae and Freddie Mac rebuffed yet another motion by one of the banks to shut down the legal action. Last week, Judge Denise Cote of the U.S. District Court for the Southern District of Manhattan rejected a motion to reconsider her December decision allowing the FHFA to proceed on behalf of the GSEs with most of its fraud claims against Ally Financial. On Dec. 19, the judge denied most of Ally’s motion to dismiss, including the defendant’s request that the court strike the demand for punitive damages, finding there were sufficient factual allegations in the FHFA’s complaint to move forward with its fraud complaint.

Redwood Trust is set to issue its first non-agency jumbo mortgage-backed security of the year, a portion of which will include ARMs and significant contributions from EverBank. The real estate investment trust said it is close to being able to issue one non-agency MBS a month this year, up from six in all of 2012. Sequoia Mortgage Trust 2013-1 largely includes characteristics common to other recent Redwood deals, including 7.30 percent credit enhancement for the two tranches set to receive AAA ratings from Fitch Ratings, Kroll Bond Rating Agency and Moody’s Investors Service. However, ARMs have not been included in a Redwood deal since a January 2012 issuance. ARMs will account...

Analysts expect the U.S. economic recovery to continue on a slow, weak path into 2013 with the potential for a new recession that could weaken the residential MBS market. At Standard & Poor’s, analysts predict a “slow and uneven” economic recovery with a 15 percent to 20 percent chance of another recession that would be less severe than the 2008-2009 financial crisis but potent enough to sap the MBS market. S&P assumes a reversal in home prices and unemployment rising to near 9 percent in 2013, which could hamper borrower capacity to make their mortgage payments. Overall, S&P’s outlook for the single-family MBS market is...

A new non-agency jumbo MBS from a subsidiary of Credit Suisse Group includes some key differences compared with Redwood Trust deals, while pumping life into the non-agency market. DLJ Mortgage Capital issued a $329.89 million non-agency jumbo MBS late last week via a private placement; it was the company’s third of 2012. CSMC Trust 2012-CIM3 received a AAA rating from Standard & Poor’s with credit enhancement of 5.85 percent on the top-rated tranche. The new Credit Suisse deal included...

Ginnie Mae is increasing its scrutiny of issuers and tightening the screening of new issuer applicants to ensure that all participants in its mortgage-backed securities program fulfill their obligations. The agency is concerned about issuers coming in with little understanding of how the program works and what their responsibilities are, and putting Ginnie Mae at risk, said Michael Drayne, senior vice president at Ginnie Mae’s Office of Issuer and Portfolio Management, during a recent webinar hosted by Inside Mortgage Finance. Drayne noted Ginnie Mae’s success, saying that the only way it would not be profitable is ...

Mortgage-backed securities production by the top Ginnie Mae issuers in the third quarter of 2012 slipped but not by enough to offset the 32.1 percent gain on a year-over-year basis, according to an Inside FHA Lending analysis of Ginnie Mae data. Ginnie Mae MBS issuance fell by a mere 0.1 percent from the second quarter, a hiccup that would have been easily cured had any of the top five issuers posted even a modest gain. All five issuers saw their issuances fall during the quarter. The top issuers reported a total of $100.57 billion in MBS sold to investors at the end of the third quarter, down from $100.62 billion the previous quarter. The slip disrupted an ...