Improving market conditions and strengthening appetites on Wall Street have encouraged a pair of MBS-buying real estate investment trusts to hit up the equity markets, including an initial public offering from relative newcomer First Oaks, which touts a hybrid investment model.

Fannie Mae and Freddie Mac mortgage-backed securities remained the preferred investment choice of the 12 Federal Home Loan Banks during the fourth quarter of 2012, with a slight decrease from the previous quarter, according to a new ranking and analysis by Inside The GSEs based on data from the Federal Housing Finance Agency. Ginnie Mae securities also posted a negligible decrease within the FHLBank system during the period ending Dec. 31, 2012. GSE MBS accounted for 72.3 percent of combined FHLBank MBS portfolios, down 1.1 percent from the third quarter. The Finance Agency’s data do not separately break out Fannie and Freddie securities.

The majority of financial institutions defending themselves against a massive litigation initiative by the Federal Housing Finance Agency on behalf of Fannie Mae and Freddie Mac for toxic mortgage-backed securities purchased by the GSEs launched a counteroffensive this week by urging a federal appeals court to intervene in their favor against the “unfair” trial judge. Fifteen banks, including JPMorgan Chase, UBS Americas, Citigroup, Deutsche Bank and Bank of America, filed a joint petition with the Second Circuit Court of Appeals in New York complaining that U.S. District Judge Denise Cote has engaged in a “one-sided” approach designed to force a settlement rather than “foster fair and reasonable determination of the issues.”

Nomura recently made a $78.0 million make-whole payment on one of its non-agency MBS deals that was enough to completely pay off the class A notes and reverse substantial realized losses on the class M1 and M2 securities, according to Barclays Capital. Such loan-level repurchases have been uncommon since topping out at about $6.0 billion in payments in 2007.

A federal judge this week tentatively dismissed most of the claims the National Credit Union Administration filed against Goldman Sachs regarding non-agency mortgage-backed securities. U.S. District Judge George Wu determined that the NCUA’s complaint was untimely unless the federal regulator could prove otherwise, according to an analysis by the Credit Union National Association. The Consumer Financial Protection Bureau published a preliminary list of counties exempt – in certain circumstances ... [Includes two briefs]

Most mortgage banking firms – both bank and nonbanks alike – have been posting record profits over the past year, creating the pleasant problem of what to do with all that cash. According to interviews conducted by Inside Mortgage Finance over the past few weeks, certain nonbank owners have been taking cash out of their companies, using the money to pay hefty tax bills. Others have been leaving money in the company and searching for ways to shelter income. One way to do that, according to some tax experts, is to retain originated servicing rights. This is...

Redwood Trust recently came to market with a $287.5 million convertible debt offering which was snatched up by investors – a sign that not only is the real estate investment trust doing well with its jumbo securitization business, but other mortgage issuers might meet similar results if they need to borrow money in the capital markets. Mike McMahon, a managing director at the company, told Inside MBS & ABS that the jumbo issuer decided to tap the debt market as “a way to support our investment activity for 2013. If we securitize $7 billion and retain the subs, we will need capital.” Redwood hopes...

A number of significant former members of the American Securitization Forum are working to form a new trade group, with a formal announcement possible as soon as this week. Meanwhile, Tom Deutsch, executive director of the ASF, said his group continues to work with more than 300 members. As many as 30 firms could be a part of a new securitization trade group, with the name “Structured Finance Industry Group” being considered. Wells Fargo has confirmed that it will be a member of the new group. Other firms that recently quit the ASF’s board or otherwise ended their membership with the ASF include...

An Alt A MBS investor won a court order temporarily restraining Nationstar Mortgage from auctioning off nonperforming loans from its MBS pools, a development that could result in a legal precedent being established on the practice, if it’s not already too late to matter. Back in February, Nationstar began auctioning NPLs on auction.com, according to a civil complaint filed by the investor, KIRP LLC, in the Supreme Court of New York. There are currently two additional auctions totaling some $750 million of NPLs listed on the internet auction site, both believed to be related to Nationstar. The company is...

Fannie Mae and Freddie Mac have been content to let their significant holdings of non-agency mortgage-backed securities run off in recent years as opposed to selling the investments at a loss. However, the government-sponsored enterprises will likely have to sell some of their vintage non-agency MBS due to a mandate from the Federal Housing Finance Agency. A set of goals for the GSEs in 2013 released this week by the FHFA includes reducing the GSEs’ retained portfolio balances by selling 5 percent of the assets ...