CORRECTION: The jumbo mortgage-backed securities issuers and underwriters ranking published in the July 4, 2014, issue of Inside Nonconforming Markets has been revised due to a data error. The revised chart is available online. Citigroup agreed to a $7.0 billion settlement this week with federal regulators and certain states related to non-agency MBS activities prior to 2009. Associate Attorney General Tony West suggested that ... [Includes seven briefs]

The six lawsuits filed in June by institutional investors against non-agency MBS trustees are just the beginning of actions against trustees, according to an attorney who has pursued representation-and-warranty claims against non-agency MBS issuers. “We are likely to see a flood of litigation against trustees alleging that the banks sat on their hands and blew the statute of limitations on valuable putback claims,” according to Isaac Gradman, an attorney at Perry Johnson Anderson Miller & Moskowitz. The June lawsuits by BlackRock, PIMCO and other institutional investors targeted...

A spike in issuance of jumbo mortgage-backed securities in the last days of the second quarter of 2014 wasn’t enough to boost issuance to the meager levels seen in the previous quarter, according to a new ranking and analysis by Inside Nonconforming Markets. Some $1.25 billion in jumbo MBS were issued in the second quarter, a 24.9 percent decline from the previous quarter. Four issuers brought deals to the market during the quarter ... [Includes one data chart]

The Treasury Department issued a wide-ranging request for comments last week as part of an effort to increase issuance of non-agency mortgage-backed securities. Treasury officials said they are working toward developing standards and practices for the non-agency MBS market. “The private-label securities market has been dormant since the financial crisis,” said Treasury Secretary Jacob Lew. “The fact is, we need to attract more private capital to the housing market ...

JPMorgan Chase issued a $303.75 million jumbo mortgage-backed security last week backed by 15-year fixed-rate mortgages. The deal suggests that there is some viability in securitization as the loans included in the deal were suitable to be held in bank portfolios and in fact were mostly originated by banks. First Republic Bank accounted for 55.1 percent of the contributions to J.P. Morgan Mortgage Trust 2014-2 followed by Chase itself with a ...

The new lenders contributing to jumbo mortgage-backed securities could pose risks to investors in the deals, according to Standard & Poor’s. The rating service said that due diligence and strong underwriting standards currently mitigate the risks, but there are concerns that the lenders with limited track records won’t be able to fulfill representation-and-warranty repurchase obligations. Jumbo MBS have seen contributions from a mix of lenders. The main contributors ...

The $261.01 million jumbo mortgage-backed security that Shellpoint Partners issued in June 2013 has had 14 loans go 30-days delinquent, four loans go 60-days delinquent, and one loan go 90-days delinquent, according to Kroll Bond Rating Agency. As of May, only three of the loans were 30-days delinquent, with the other once-delinquent mortgages having returned to current status or paid off. KBRA affirmed its ratings of ... [Includes four briefs]

Agency issuance of single-family MBS rallied during the second quarter of 2014, offsetting a slump in production of non-agency MBS and non-mortgage ABS, according to a new market analysis by Inside MBS & ABS. Fannie Mae, Freddie Mac and Ginnie Mae combined to produce $212.23 billion of single-family MBS during the April-to-June cycle. That was up 13.3 percent from the first three months of 2014, which was the weakest quarter for agency MBS production since the first quarter of 2001. On a year-to-date basis, agency MBS issuance was...[Includes two data charts]

The Treasury Department announced late last week that it is working to develop market practices and standards that would be necessary “to support a safe and sustainable non-agency MBS housing finance channel of significant scale.” As part of the effort, the Treasury posed nine questions to industry participants and is accepting comments on the issue until Aug. 8. Michael Stegman, counselor to the Treasury for housing finance policy, said regulators have addressed most of the problems seen in the non-agency MBS market before the financial crisis. “The last remaining piece of the puzzle is putting in place standards and mechanisms to protect investors in residential MBS, while also clearly defining issuer responsibilities so that they have the confidence to return to the market at scale,” he said. Regulators may have “addressed”...

The jumbo MBS market sprung to life this month, just before the close of the second quarter. Three firms are scheduled to issue jumbo MBS at the end of this week, and the market’s biggest player, Redwood Trust, is close to its first new issuance since pricing a deal at the end of March. While jumbo mortgage securitization is currently attractive to issuers, industry analysts suggest that volume will remain limited this year due to a number of factors, including a lack of strong demand from a wide range of investors, incentives for banks to hold jumbos in portfolio and continued dominance by the government-sponsored enterprises. “I think issuance will remain...