Two real estate investment trusts are working toward joining Redwood Trust in issuing new non-agency jumbo mortgage-backed securities. Two Harbors Investment and PennyMac Mortgage Investment Trust are acquiring jumbos with plans to securitize the loans and potentially hold the subordinate tranche, a model similar to Redwood’s efforts. Two Harbors first announced its intentions to issue new non-agency MBS in 2011, with a goal for issuance at the end of that year. Thomas Siering, president and CEO ...

Issuers, investors and even regulators agree that underwriting standards for non-agency mortgage-backed securities will have to loosen for the sector to grow. “We have to start moving down the credit spectrum,” said Sharif Mahdavian, a director and analytical manager of residential MBS at Standard & Poor’s. Speaking at the American Securitization Forum’s ASF 2013 conference last week in Las Vegas, he said non-agency originations could easily move from “shocking prime” to ...

Reform of the government-sponsored enterprises still appears to be years away and might not be a priority until non-agency mortgage originations increase significantly, according to industry analysts. Non-agency market participants counter that Fannie Mae and Freddie Mac are hindering non-agency originations. “The better the GSEs do, the less impetus there is for Congress to do anything,” Amy Overton, a vice president of federal government affairs at Citi, said last week at the American Securitization Forum’s ...

The government-sponsored enterprises will soon issue pilot non-agency risk-transfer transactions, according to officials at the Federal Housing Finance Agency, Fannie Mae and Freddie Mac. The GSEs missed a third quarter 2012 deadline set by the FHFA to issue risk-sharing transactions due to complications with the Commodity Futures Trading Commission. Patrick Lawler, chief economist at the FHFA, said a risk-sharing transaction will hopefully be issued in the “not too distant future.” Speaking at the ...

The investment period for the remaining funds participating in the Public-Private Investment Program ended during the fourth quarter of 2012, with four funds exiting the program during that time. The Treasury Department said it earned a profit from the PPIP, which focused on investment in non-agency mortgage-backed securities, and most of the individual funds also turned significant profits. “Our ability to aid in the stability of the MBS market and deliver solid investment ... [Includes one data chart]

Obama administration officials continue to claim that the administration is working toward a program to refinance or modify non-agency loans for borrowers with negative equity. Support in Congress for such a program is largely limited to Democrats, with the Obama administration suggesting that a non-legislative solution could be implemented. “We must expand streamline refinancing to families whose loans are not guaranteed by the government,” Michael Stegman, counselor to the Treasury ...

Assured Guaranty won a lawsuit this week against Flagstar Bank regarding a breach of representations and warranties on more than $900 million in non-agency mortgage-backed securities issued by Flagstar. Industry analysts suggest the ruling is significant as it is one of the first in favor of bond insurance companies trying to enforce breaches of reps and warrants, and U.S. District Judge Jed Rakoff endorsed many of the tactics they have used to seek buybacks, including ... [Includes two briefs]

Most securities issuers and investors who attended this week’s American Securitization Forum ASF 2013 conference in Las Vegas were optimistic about the market. “We are seeing demand that we have not seen in years,” said Michael Binz, a managing director and business leader of North America ABS at Standard & Poor’s. Binz noted that the mood at the conference a year ago was starkly different, with fewer investors, diminishing supply and regulatory uncertainty. About 5,660 people registered to attend the conference this year, up from 5,000 last year, according to Tom Deutsch, executive director of the ASF. Deutsch noted...

The government-sponsored enterprises are working several different risk-transfer pilots and will soon issue the securities, according to officials at the Federal Housing Finance Agency, Fannie Mae and Freddie Mac. Non-agency MBS investors appear eager for the securities, though a number of regulatory concerns remain, including complications with the Commodity Futures Trading Commission. Patrick Lawler, chief economist at the FHFA, said a risk-sharing transaction will hopefully be issued in the “not too distant future.” Speaking at the American Securitization Forum’s ASF 2013 conference this week in Las Vegas, Lawler and other officials with the FHFA and GSEs said risk-sharing transactions are a high priority this year. “The commitment is...

Fannie Mae and Freddie Mac have created a limited prototype of their somewhat controversial standardized securitization platform and are working to address industry feedback, according to officials at the Federal Housing Finance Agency and the government-sponsored enterprises. Speaking at the American Securitization Forum’s ASF 2013 conference this week in Las Vegas, Patrick Lawler, chief economist at the FHFA, said a limited prototype of the securitization platform has been developed. Wanda DeLeo, deputy director of the FHFA’s office of strategic initiatives, said the GSEs continue to work on the prototype, which is based largely on the architecture outlined in an October white paper from the FHFA. The white paper received...