Prospects for a return of elevated conforming loan limits remain unclear after the Senate approved a reinstatement provision in an appropriations bill in October. Most conservatives in the House remain strongly opposed to the reinstatement which would likely delay the return of the non-agency market. More than 30 percent of members of the House support a temporary reinstatement of elevated conforming loan limits, according to a letter sent to House leaders this week. ...
The stellar returns on non-agency mortgage-backed securities purchased via the Public-Private Investment Program have faltered this year, prompting some to call for a revamp of the program. Invesco the fund that has seen the most success with the PPIP also recently announced that it quit the program after having difficulties finding appropriate investments. ... [includes one data chart]
A new regulatory regime for non-agency securitization proposed last week by Rep. Scott Garrett, R-NJ, has attracted some support from non-agency mortgage-backed security issuers. However, the Private Mortgage Market Investment Act, which is aimed at reviving the non-agency market, also faces some bipartisan opposition. This legislation, along with regulatory plans to level the playing field, could spur a broad resurgence of the private MBS market in the short-term, for the benefit of homeowners, lenders, and investors, said Martin Hughes, president and CEO of Redwood Trust, at a hearing this week by the House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises. ...
The chairman of the House subcommittee that oversees the GSEs unveiled a bill late this week that seeks to drastically overhaul the secondary mortgage market without the need for Fannie Mae or Freddie Mac.The Private Mortgage Market Act would create a heavily regulated mortgage-backed securities market consisting strictly of private entities functioning without a federal guarantee, according to Rep. Scott Garrett, R-NJ.Garrett, who chairs the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, said the goal of his legislation is to facilitate continued standardization and uniformity, ensure rule of law and provide MBS investors with the necessary transparency and standardization to ensure that a deep and liquid market develops without Fannie and Freddie.
Despite a rare new issue backed by current production jumbo loans, the non-agency MBS market hit a record low in the third quarter of 2011. Just $1.86 billion of new non-agency MBS came to market in the third quarter, a significantly lower number than the previous low reached at the height of the financial crisis in the third quarter of 2008, when $2.15 billion of securities were issued. There was a huge fall-off in resecuritization activity. Just $301 million of these deals were issued in the third quarter, less than a tenth the volume in the previous three-month period. In addition to the...(Includes three data charts)
The performance of large mortgage servicers of non-agency residential MBS, including their ability to prevent or cure loan delinquencies, varied widely during the 12 months ending in June 2011, due in no small part to foreclosure moratoria imposed on some, but not all, servicers, according to Moodys Investors Service. The companys inaugural Servicer Dashboard report found that during the June 2010 to June 2011 period, JPMorgan Chase and Bank of America exhibited overall poor servicing performance in contrast to CitiMortgage, GMAC and Ocwen. A major impediment to Chase and BofAs servicing performance, Moodys noted, was the fact that...
We have to reduce uncertainty to bring private capital back, Shaun Donovan, secretary of the Department of Housing and Urban Development, said at the Mortgage Bankers Associations annual convention last week in Chicago. Industry participants remain divided on if or when non-agency securitization will resume in a significant manner. Daniel Arrigoni, president and CEO of U.S. Bank Home Mortgage, said U.S. Bank and other lenders must think about developing non-agency securitization capabilities as the federal government works toward reducing its involvement in housing finance. ...
Acquisitions of large non-agency portfolios by Bank of America and JPMorgan Chase resulted in poor servicing performance, according to a new analysis by Moodys Investors Service. Successful borrower-contact initiatives, meanwhile, resulted in significantly improved servicing performance for others. Integrating the servicing platforms, employees, processes, and technologies into their servicing operations overwhelmed the banks, reducing their ability to proactively address the increased number of problem loans in their combined portfolios, Moodys said. ...
The Federal Housing Finance Agency needs to explain why it hired expensive outside counsel instead of dispatching government lawyers in its massive litigation against the nations big financial institutions, as well as just how much the agency expects to recoup from the effort, according to a senior Republican congressman.
The chairman of the House Committee on Oversight and Government Reform wants the Federal Housing Finance Agency to explain why it hired two outside law firms in a massive legal action to recover losses suffered by Fannie Mae and Freddie Mac on their investments in non-agency MBS. Rep. Darrell Issa, R-CA, wrote FHFA Acting Director Edward DeMarco on Sept. 29 asking why the agency hired outside counsel from Quinn Emanuel & Sullivan and from Kasowitz Benson Torres & Freidman to initiate lawsuits against financial institutions and how much the agency is paying them. Issa posed detailed questions and requested documents regarding...