When it comes to trading in agency MBS, Deutsche Bank is heading for the exits as a lack of volume in a once-thriving profit center continues to head south. Granted, Deutsche’s departure from the space is part of a huge worldwide restructuring at the German-based bank, but with MBS trading volume falling to a 13-year low last year – and not looking much better this year – the decision was likely an easy one. Chris Whalen, senior managing director at Kroll Bond Rating Agency, said...

Bank of America has disclosed a $335 million settlement with a Pennsylvania public school pension fund, ending a four-year class-action lawsuit brought by shareholders. BofA made the disclosure without much detail in its 10-K filing. According to the bank, the $335 million, which will be used to settle multiple claims, was fully accrued as of June 30, 2015. A bank spokesman declined to comment on the settlement. Shareholders led...

FCI Lender Services, the nation’s largest private-money servicer, is sticking its toe in the lending market by teaming up with Blackrock Mortgage Investment to extend credit to investors in single-family rental properties. This month, the Anaheim, CA-based FCI rolled out two SFR products and one tied to investors looking to buy nonperforming mortgages. According to a rate sheet provided to Inside Mortgage Trends, one of the SFR products requires...

Freddie Mac will begin creating new “mirror” securities that will play a key role in how the government-sponsored enterprise will allow investors to exchange existing Freddie participation certificates for new single securities. The mirror securities will be held in a Federal Reserve account and will not increase the outstanding principal balance of Freddie MBS, the GSE explained in an update on the exchange program. The mirror securities will track existing Freddie MBS but substitute a 55-day payment cycle for Freddie’s current 45-day cycle. When an investor exchanges part or all of an existing 45-day security for a new 55-day single security that’s interchangeable with Fannie Mae single securities, Freddie will pay...

The Federal Reserve’s zero interest rate policy lives to die another day, as the Fed’s Open Market Committee opted this week to hold the line on a rate increase, as it has since December 2008, leaving investors and other market participants to try to read the tea leaves as best they can. “To support continued progress toward maximum employment and price stability, the committee today reaffirmed its view that the current 0 to 0.25 percent target range for the federal funds rate remains appropriate,” the FOMC said in its much-anticipated statement, issued mid-week. In making its decision about whether to raise the target range at its next meeting, scheduled for mid-December, the Fed said...

A typical jumbo mortgage-backed security is stronger in many ways than the non-agency MBS-like transaction Freddie Mac issued at the end of July, according to a recent analysis by Andrew Davidson & Co. However, the Freddie deal benefitted from a wrap provided by the government-sponsored enterprise. Freddie Mac Whole Loan Securities Trust Series 2015 SC01 was backed by mortgages with an unpaid principal balance of $302.96 million. The risk-sharing transaction was structured as a cash securitization with $278 million in senior certificates guaranteed by Freddie and approximately $23 million in unguaranteed subordinate certificates. Andrew Davidson compared...

Parkside Lending’s insurance subsidiary recently became a member of the Federal Home Loan Bank of Cincinnati. Parkside said access to FHLBank advances will help provide leverage to Parkside Mortgage Trust, a real estate investment trust. Officials at Parkside wouldn’t address the amount of advances PSL Insurance Company will have access to or whether the advances will help fund originations of non-agency mortgages. In addition to conventional conforming offerings, Parkside originates non-qualified mortgages. Resitrader recently launched...[Includes four briefs]

The unpaid principal balance on VA loans securitized in 3Q15 Ginnie Mae mortgage-backed securities totaled $426.9 billion, up 5.1 percent from the previous quarter and 17.3 percent more year-over-year. Wells Fargo serviced $114.4 billion of VA collateral at Sept. 30, 2.0 percent up from the prior quarter. It was good enough for a commanding 26.8 percent of the market. The only other megabank among the top five servicers in this segment was fifth-place Chase Home Finance, which closed the quarter with $16.8 billion and a 3.9 percent market share. It saw portfolio declines on both quarterly and year-over-year bases. USAA Federal Savings Bank, in third place, accounted for $24.1 billion, or 5.6 percent of the VA-backed MBS servicing market. Nonbanks PennyMac, in second place, and fourth-ranked Freedom Mortgage combined for 11.0 percent of the ... [ 1 chart ]

Servicing of FHA loans pooled into Ginnie Mae mortgage-backed securities rose 2.1 percent in the third quarter of 2015. Three megabanks in the top five-servicer tier accounted for a significant share of the market. Ginnie Mae servicers of FHA collateral reported $969.0 billion outstanding at Sept. 30, with Wells Fargo accounting for 27.9 percent of total servicing volume. Wells Fargo, Chase Home Finance (#2) and Bank of America (#5) combined to service 39.3 percent of FHA outstanding as of the end of the quarter. PennyMac Corp. closed the quarter with a $57.7 billion FHA servicing portfolio, good enough for third place and 6.0 percent of the market. Fourth-ranked NationStar Mortgage reported a $53.6 billion servicing portfolio at the end of the ... [ 1 chart ]

While federal regulators issued a final rule setting risk-retention requirements for a variety of MBS and ABS in December 2014, uncertainty regarding implementation persists. Industry participants are seeking guidance from regulators on a variety of issues, including the application of risk retention to asset classes that weren’t prevalent when the Dodd-Frank Act was drafted. “It’s absolutely astonishing how much becomes unclear when you actually sit down to build a risk-retention solution,” Rick Jones, chair of finance and real estate groups at the Dechert law firm, said in a recent commentary. He noted...