Parties to trustee lawsuits challenging a city’s use of eminent domain to deal with foreclosures are gearing up for a face-off at an injunction hearing Sept. 13 in federal district court in San Francisco. The city of Richmond, CA, the defendant in the lawsuit, has suffered setbacks in the last few days and has yet to make good on its threat to initiate eminent domain proceedings after investor trustees rejected its offer to purchase distressed mortgages for restructuring. Wells Fargo and Deutsche Bank, acting as trustees for a group of ...

The question of whether the FHA should allow the refinancing of underwater mortgages seized through eminent domain has reemerged as a key issue following a recent decision by the city of Richmond, CA, to use its authority to take over distressed mortgages for restructuring. There is a new twist to the question, however. Could FHA’s refusal to refinance such mortgages be deemed discriminatory against cities and homeowners if eminent domain programs meet the requirements of the FHA Short Refinance program? Is that tantamount to redlining? A top executive of Mortgage Resolution Partners, which developed the eminent domain strategy to help underwater homeowners at risk of foreclosure, said ...

Small lenders have accounted for a growing share of contributions to non-agency jumbo mortgage-backed securities. Some deals have included more than 70 lenders, with most of the lenders contributing less than 5 percent of the volume of mortgages included in a security. While the lenders’ individual contributions to a particular jumbo MBS are small, they add up to significant market share, particularly when issuers don’t identify the lenders in prospectus documents filed with the Securities ... [Includes two data charts]

California remains the top source of new single-family mortgages for Fannie Mae and Freddie Mac, even as Fannie remains the dominant GSE in terms of production through the first half of the year, according to an Inside The GSEs analysis. A total of $160.3 billon home loans on Golden State properties were securitized by the two GSEs during the first six months of 2013, accounting for 23.1 percent of their total business for the half year. That was up 21.2 percent from total California production during the first six months of 2012 as the overall GSE market rose 20.2 percent from a year ago.

A subsidiary of Nomura Holdings is preparing to issue a non-agency jumbo MBS, the Wall Street firm’s first deal backed by new production since 2007. Rising interest rates and concerns about investor demand don’t seem to have put a damper on non-agency MBS issuance, as Redwood Trust cranked out another jumbo deal last week and Springleaf Finance issued a security backed by vintage subprime mortgages this week. The $440.08 million non-agency jumbo MBS from Nomura Corporate Funding Americas is set to receive a AAA rating with credit enhancement of 7.60 percent on the top-rated tranche, according to a presale report released this week by Kroll Bond Rating Agency. The credit enhancement was increased due to geographic concentration risk because 74.0 percent of the mortgages to be included in NRP Mortgage Trust 2013-1 were originated in California. Fitch Ratings warned...

The FHA has proposed measures to strengthen its oversight of FHA lenders and each measure could potentially increase lenders’ liability and compliance risk, compliance experts warned. Published for comment in the July 9 Federal Register, the proposals are part of a new enforcement regime that the FHA is considering to monitor and sanction lenders. They cover statistical sampling, origination quality standards, annual reviews, compare ratios, and indemnification and other remedies for loan defects. The proposed enforcement measures, however, raise a ...

The Department of Housing and Urban Development is adopting the mortgage banking industry’s data standards format for the FHA’s TOTAL Mortgage Scorecard, which HUD uses to evaluate the credit risk of FHA loans that are submitted through an automated underwriting system. The standards were developed by the Mortgage Industry Standard Maintenance Organization (MISMO), a nonprofit subsidiary of the Mortgage Bankers Association. MISMO is an open data standards group that promotes consistency among mortgage transaction participants to reduce loan processing costs, increase transparency, and ultimately ...

Ginnie Mae guaranteed more than $216.9 billion in mortgage-backed securities during the first half of 2013, up 18.8 percent from the same period last year. Issuance was also up 8.0 percent in the second quarter from the first quarter, according to an Inside FHA Lending analysis of Ginnie Mae data. Not surprisingly, a significant share – $132.8 billion – of Ginnie Mae MBS issuances over the six-month period were backed by FHA loans. VA accounted for $72.1 billion while Rural Housing Service loans totaled $10.5 billion. Ginnie Mae issuances dropped during the first quarter but surged in the second quarter as ... [1 chart]

Credit unions held a total of $107.1 billion of MBS in their portfolios at the end of the first quarter of 2013, according to a new Inside MBS & ABS analysis and ranking of call report data. That was up 4.9 percent from the previous period, a relatively strong increase in a market where the supply of MBS outstanding has barely budged and the Federal Reserve represents a huge competitor for new issuance. Compared to a year ago, credit union MBS holdings were up 10.9 percent, while the total MBS market actually declined by 1.4 percent. Credit unions for the most part have ignored...[Includes one data chart]

Fannie Mae and Freddie Mac saw a marked decline in refinance business during the second quarter of 2013, but a strengthening housing market helped offset some of the lost volume. The two government-sponsored enterprises securitized $256.0 billion of single-family refinance loans during the second quarter, according to the Inside Mortgage Finance GSE Seller Profile, a quarterly statistical report based on loan-level, mortgage-backed securities disclosures. That was down 13.6 percent from ... [Includes two data charts]