Investors have significantly reduced their home-purchase activity in recent months, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. Current homeowners and first-time homebuyers have filled the void and are much more likely to finance a home purchase with a mortgage compared to investors. Investors accounted for 20.2 percent of home purchases in May, based on the three-month moving average, the third consecutive decline in investor share. Market share for both current homeowners and first-time homebuyers increased in recent months, with current homeowners accounting for 43.8 percent of home purchases in May. The trends present...

The Securities and Exchange Commission sought changes large and small before approving the non-agency MBS shelf registration statement of Shellpoint Partners in May. The scrutiny is similar to that faced by Redwood Trust when it renewed its shelf this year, showing that the SEC wants particular disclosures to accompany new non-agency MBS issuance. The back and forth between the SEC and Shellpoint started in November, when the agency sent Shellpoint initial comments on the proposed prospectus that would accompany non-agency MBS issued by the firm. The SEC requested greater disclosure and corrections to a number of issues. The SEC said...

The Structured Finance Industry Group said it had substantive discussions with staff members at the Securities and Exchange Commission this week regarding loan-level data formats for mortgages. The SFIG said it plans to work with the Mortgage Bankers Association to potentially enhance the MBA’s Mortgage Industry Standards Maintenance Organization data fields. The SFIG said it is considering pushing for MISMO standards to be used in the government-sponsored enterprises’ risk-sharing ... [Includes three briefs]

Lloyds Banking Group was able to sell a sizable portfolio of vintage non-agency MBS this week at attractive prices. Additional sales of vintage non-agency MBS are expected as a strong housing market and demand from investors has pushed prices above the marks some institutions had placed on their holdings. Last week, Lloyds offered a bid list of $8.7 billion in non-agency MBS, largely non-investment grade, on an all-or-nothing basis. The British financial institution said the sale will close this week for a cash consideration of $5.05 billion, 22.3 percent higher than the book value that Lloyds had assigned the assets. “While Lloyds’ book value may not be...

At first, residential origination volumes were slow at Citadel Loan Servicing Corp., a new player in a lonely market: nonprime production. But that was two months ago, when the Irvine, CA-based company first opened its doors. “People are finally calling us,” said Dan Perl, CEO of the privately held nonbank. By the time June ends, the company will have funded almost $6 million for the month, maybe as much as $8 million. The origination numbers, of course, are miniscule compared to monthly conventional volume, but in the “new” nonprime space Citadel is probably doing more business than the two-dozen or so nonprime or hard money lenders that are quietly toiling away in selected markets. For the industry to revive...

Fannie Mae and Freddie Mac mortgage-backed securities remained the preferred investment choice of the 12 Federal Home Loan Banks during the first quarter of 2013, with a negligible decrease from the previous quarter, while a number of FHLBanks indicated no plans to sell the riskier non-agency MBS in their portfolios. A new analysis and ranking by Inside The GSEs based on data from the Federal Housing Finance Agency found overall MBS investments for the dozen FHLBanks declined 1.0 percent to $137.14 billion between the fourth and first quarters. However, non-agency MBS, which made up 18 percent of the total FHLBank system’s share of MBS during the first three months of this year, fell to $24.69 billion as of March 31, 2013. This was down 2.9 percent from the fourth quarter of 2012 and down 13.5 percent from $28.52 billion from the same period a year ago.

The amount of non-agency MBS held by the 12 Federal Home Loan Banks continued its steady decline during the first quarter of 2013. Non-agency MBS investments by the FHLBanks came to $24.69 billion as of March 31, 2013, down 2.9 percent from the fourth quarter of 2012 and off 13.5 percent from $28.52 billion in the same period a year ago. Non-agency MBS made up...[Includes one data chart]

Two years after being announced, a judge is set to rule on Bank of America’s proposed $8.5 billion settlement involving non-agency mortgage-backed securities. The ruling will set a precedent for other non-agency MBS issuers facing repurchase requests, according to industry analysts. “Either the deal goes through and becomes a template for how to extract oneself from this mess, or it gets rejected and signals that far more pain is coming down the pike,” said Isaac Gradman ...

The funds participating in the Public-Private Investment Program ended their asset purchases in the fourth quarter of 2012 and generated strong returns on investments in non-agency mortgage-backed securities. While Public-Private Investment Funds can retain their holdings through 2017, most have liquidated their portfolios. Nine funds participating in the PPIP purchased $24.9 billion in MBS, largely vintage non-agency MBS along with some commercial MBS. At the end of the ... [Includes one data chart]

Wall Street raised no objections to a Ginnie Mae proposal to consolidate its two mortgage-backed securities programs, indicating the move would be good for securitization and result in other positives. However, there appeared to be no consensus among players on how to get there. Representatives of Ginnie Mae and the Securities Industry and Financial Markets Association met early this month to discuss the agency’s proposal. Analysts agreed it is far too early in the game to discern a clear path towards a single Ginnie Mae MBS program and that implementation is likely years away. Nevertheless, there were ...