Seneca Mortgage Servicing LLC, which entered the business just three years ago, has decided to outsource the monthly processing of loans to Nationstar, a sign that private-equity firms are no longer so enamored with the returns generated by mortgage servicing rights. According to a statement issued by Nationstar, it will service all of Seneca’s $50 billion portfolio and any rights Seneca might obtain going forward. Moreover, it will take control of the firm’s Depew platform in upstate New York. No terms were disclosed. However, according to interviews with servicing advisors, Seneca – whose backers include The Blackstone Group, EJF Capital and Arbor Commercial Mortgage – may not be...

Fannie Mae plans to start issuing MBS backed by single-family, fixed-rate re-performing mortgages later this year. This week, the government-sponsored enterprise detailed some of the types of loans that will be included in the planned issuance. Both loans that cured on their own and mortgages that received a modification will be eligible for the new RPL securitization program. Among other factors, the mortgages must have been performing for at least six months. Loans modified via the Home Affordable Modification Program will be eligible for the MBS along with loans modified through the GSE’s proprietary mod programs. A number of different loan types will be excluded...

First Mortgage Corp., a privately-held mortgage company based in Ontario, CA, and six executives have agreed to pay the Securities and Exchange Commission $12.7 million to resolve charges they concocted a scheme to defraud investors in Ginnie Mae MBS, the SEC announced this week. According to the SEC’s complaint, from March 2011 through March 2015, FMC repurchased current loans from Ginnie pools that it claimed were delinquent. FMC bought...

Moody’s Investors Service assigned its first “Green Bond Assessment” last week to an MBS backed by Dutch mortgages that were selected on the basis of the underlying properties’ energy efficiency. The rating service said it expects future “green transactions” from issuers such as financial institutions and governments. “Green bonds” are securities that raise capital for use in financing or refinancing projects and activities with specific climate or environmental sustainability purposes. Moody’s said green bonds include securitizations collateralized by projects or assets whose cash flows provide the first source of repayment, debt obligations with direct recourse to issuers and project finance or revenue bonds. Green Storm 2016 B.V. received...

FHA originations rose significantly in the first quarter of 2016 from the same period last year even as VA loan production decreased slightly, according to an analysis of Ginnie Mae data. Lenders delivered $54.4 billion of FHA-insured loans to Ginnie Mae for securitization during the first three months, up 36.2 percent from the previous year. In contrast, the volume of VA loans securitized over the same period, $35.0 billion, fell 1.5 percent compared to the same period a year ago. A strong purchase-mortgage market drove FHA activity from January to March. The reduction in FHA’s annual insurance premium in January 2015 continued to have an impact on FHA’s purchase-loan market share. In 2015, FHA purchase originations accounted for $151.0 billion of the estimated $881.0 billion in total purchase originations (conventional and government single-family forward originations), according to ... [ 2 charts ]

A California-based mortgage lender and six senior executives have agreed to pay $12.7 million to the Securities and Exchange Commission to resolve allegations they schemed to defraud investors in the sale of residential mortgage-backed securities with a Ginnie Mae guarantee. The SEC complaint alleged that, from March 2011 to March 2015, Ginnie Mae issuer First Mortgage Corp. and its top executives pulled current performing loans out of Ginnie Mae MBS. The issuer falsely claimed that the loans were delinquent so that it could recycle them as newly issued MBS and sell them at a profit. FMC allegedly issued Ginnie Mae MBS prospectuses with false and misleading information by using a Ginnie Mae rule that allowed issuers to repurchase seriously delinquent loans. In addition, the SEC complaint alleged that FMC deliberately delayed depositing checks from borrowers who had been behind on ...

Some potential investors in new non-agency MBS insist that a deal agent or transaction manager is necessary to revive the non-agency MBS market. Some issuers are willing to include a deal agent in their securities, though the exact functions and pricing issues still need to be worked out. “Many potential buyers of residential MBS have a strong desire for improved transaction governance mechanisms such as the use of independent deal agents,” Moody’s Investors Service said in a report published late last week. The rating service recently held a meeting with investors, issuers and others involved in the non-agency MBS market. Moody’s said...

The Federal Reserve Bank of New York’s Open Market Trading Desk this week conducted the first of two small-value agency MBS sales operations, “for the purpose of testing operational readiness.” The second test is slated for June 1, 2016. The total current face value of sales across the two operations will be less than $150 million, according to the bank. The first transaction, which involved four Fannie Mae MBS currently valued at approximately $120 million, occurred in the middle of this week. The settlement date is June 13, 2016. Meanwhile, the June 1 operation will involve...

Commercial banks and thrifts boosted their combined holdings of residential MBS to a new record, $1.661 trillion, during the first quarter of 2016, according to a new Inside MBS & ABS analysis. The data include held-to-maturity and available-for-sale accounts, but not trading assets, which included another $45.99 billion of residential MBS as of the end of March. The banking industry’s MBS holdings in HTM/AFS portfolios rose 1.0 percent from the end of 2015, and they were up a substantial 5.2 percent from a year ago. It’s worth noting that total assets in the banking industry actually rose a bit faster, by 2.1 percent, dropping the MBS share of total assets down slightly to 10.2 percent. Unlike some quarters, when activity by one or two dominant banks accounts for most of the industry’s change, the first-quarter increase was...[Includes two data tables]

After nearly five years of legal entanglements, investors will soon receive their share of the $8.5 billion Bank of America agreed to pay in June 2011 to resolve legacy mortgage-repurchase and servicing claims associated with Countrywide Financial Corp. The payouts were delayed by legal wrangling over whether trustee Bank of New York Mellon had the authority to settle. Last year, the New York Supreme Court ruled in the trustee’s favor, and a state court judge recently approved the severance order and partial final judgment, which cleared the way for BNYM to begin distributing the settlement proceeds from 512 of the 530 trusts in the case. Twenty-two investors that suffered significant losses for their failed investment in MBS sold by Countrywide prior to the collapse of the housing market are...