Publicly traded real estate investment trusts reported a 13.5 percent decline in their holdings of residential MBS during the fourth quarter, according to a new Inside MBS & ABS analysis. The industry reported $264.8 billion of residential MBS at the end of 2013, a 26.4 percent drop from the fourth quarter of 2012. The five largest REIT MBS investors all reported double-digit drops during the final three months of 2013, while the mid-range companies generally had smaller declines and three smaller firms actually grew their portfolios. At the top of the table, Annaly Capital Management reported...[Includes one data chart]

Investors would be more willing to buy AAA tranches of jumbo mortgage-backed securities if issuers would standardize their offerings, according to Michael Stegman, counselor to the Treasury Department on housing finance policy. While the Treasury and industry participants both currently have initiatives aimed at standardization, issuers haven’t been too willing to seek uniformity. In a speech last week, Stegman said that based on recent meetings with jumbo MBS participants ...

Greater standardization and transparency is needed to overcome the impediments to growing a new issue, non-agency MBS market, according to Michael Stegman, housing finance policy adviser to Treasury Secretary Jacob Lew. In remarks this week at the JP Morgan Securitized Products Research Conference, Stegman said lack of housing finance reform, lingering distrust among non-agency securitizers, lack of product and the trauma of heavy losses have stunted the growth of the market. The lack of reform of the government-sponsored enterprises should not become...

Officials at Redwood Trust, the leader in issuance of jumbo mortgage-backed securities since 2010, suggested this week that issuance of jumbo MBS from the firm this year likely won't hit the level seen in 2013. "Our preferred distribution for jumbo loans is securitization since we can retain attractive investments for our portfolio," Brett Nicholas, Redwood's president, said this week on a call with investors. "Today, however, whole-loan sales offer better execution." He said...

The wait for new disclosure requirements for non-agency mortgage-backed securities was extended this week as the Securities and Exchange Commission re-opened the comment period for the so-called Reg. AB2. The requirements for disclosures on new non-agency MBS and other asset-backed securities were first proposed in 2010. The SEC was set to approve a final Reg. AB2 rule earlier this month but is now reconsidering due to privacy issues. The delay comes as ...

HomeStreet Bank, a bit player in the jumbo mortgage-backed security market, wants a bigger role and has recently sought assessments from rating services and is working to expand its jumbo originations. Moody's Investors Service announced last week that HomeStreet received an "average" rating as an originator of jumbos. The Northwest bank also has jumbo MBS servicer ratings from Fitch Ratings and Moody's. Terri Silver, a vice president of investor relations and corporate communications ...

An increase in the purchase-mortgage share in new jumbo mortgage-backed securities will benefit investors in the deals, according to Moody's Investors Service. However, the loans are more difficult for lenders to originate than refinance mortgages, and it remains to be seen if investor demand will be high enough to prompt issuance of jumbo MBS. The share of refis in jumbo MBS declined as interest rates rose in 2013. Moody's said the trend is expected to continue this year and noted that ...

Titan Capital Solutions announced this week that it has 65 correspondent jumbo lending clients. The firm is a subsidiary of Titan Lenders and started accepting applications from jumbo correspondents in the first quarter of 2013. TCS said it offers mortgages with balances of up to $1.0 million and allows credit scores as low as 690 and loan-to-value ratios as high as 80 percent. Morgan Stanley has reached an agreement in principle with the Securities and Exchange Commission ... [Includes seven briefs]

The capital markets risk-sharing transactions completed by Fannie Mae and Freddie Mac in the past year are seen by some as a model for reform of the government-sponsored enterprises. However, the GSEs are taking on significantly more risk in the transactions than the non-agency first-loss requirements contemplated in legislation pending in Congress. Analysts at Barclays Capital project that after Congress approves mortgage-finance reform legislation, it would take at least 10 years to transition smoothly to a new system. Bills in Congress contemplate a five-year transition timeline, but raising enough private capital to fund the new system in that timeframe could be difficult. Industry analysts predict...

Issuance of agency and non-agency commercial MBS increased 13.5 percent in 2013, according to a new analysis by Inside MBS & ABS, although production dropped sharply in the fourth quarter. Industry participants expect that volume will continue to grow as investor demand for commercial MBS remains strong despite some loosening of underwriting standards. Ken Cheng, a managing director at Morningstar Credit Ratings, said...[Includes one data chart]