The decline in the use of proprietary loan mods also has outpaced a decline in foreclosure sales. Some 166,809 foreclosures were completed in the third quarter of 2013, down 2 percent from the first quarter of 2013.

Due-diligence firms, which had hoped to prosper with the return of non-agency jumbo lending, have shown little growth in the non-agency space during the second half of the year.

The man heading the MSR sales effort for Wells Fargo is Brian Kunar, who carries the title of senior vice president of servicing sales.

Ocwen Financial, the nation’s top-ranked subprime servicer, was the only firm among the major servicers that increased its subprime servicing portfolio (excluding subservicing) in the third quarter of 2013.

The settlement offer – which does not cover claims on trusts issued by Washington Mutual – will remain open until Jan. 15, 2014, but may be extended.

Although non-agency MBS issuance has been a dicey proposition since rates spiked in late spring, residential lenders continue to eye the sector, liking the long-term outlook for jumbo securities. Two nonbanks taking a close look at the jumbo MBS market include Freedom Mortgage and W.J. Bradley Mortgage Capital, both established names in the agency MBS arena. In an interview with Inside MBS & ABS, Freedom Mortgage CEO and founder Stanley Middleman said...

The Federal Housing Finance Agency has directed the two GSEs to accelerate their portfolio trimming by focusing on “less-liquid” assets other than their own MBS.

Six months back, CoreLogic was bullish on the outlook for due-diligence work tied to jumbo securitizations. But earlier this month, the publicly-traded mortgage vendor shuttered its due-diligence unit, giving layoff notices to almost 70 workers. Another 40 or so full-timers will likely lose their positions in the next few months as the division winds down. Although the firm declined to discuss the reasons behind the pullout, competitors say the anticipated boom in jumbo securitizations hit a brick wall in the spring when rates spiked and investors began to shy away from the AAA pieces of those securities. In other words, the sour short-term outlook for due-diligence firms scouring for work on non-agency loans is resulting...

Fannie Mae and Freddie Mac picked the low-hanging fruit first and sold large chunks of their most liquid “less-liquid” assets during the third quarter of 2013 as the government-sponsored enterprises continued to shift their business away from retained investments. The GSEs reduced their combined holdings of commercial MBS by 32.1 percent during the third quarter, according to a new Inside MBS & ABS analysis of their retained portfolios. The Federal Housing Finance Agency has directed the two companies to accelerate their portfolio trimming by focusing on “less-liquid” assets other than their own MBS. The commercial MBS market has been...[Includes one data chart]

Foreclosure timelines and servicers’ emphasis on loss mitigation has dampened improvements to loss severities on non-agency MBS, according to Fitch Ratings. The rating service said this week that while national average home prices have increased by 14 percent in the past year, loss severities on liquidated properties in non-agency MBS have improved by only 5 percent. In the third quarter of 2013, it took an average of 32 months to liquidate a mortgage included in a non-agency MBS, according to Fitch, more than twice as long as average liquidation timelines in 2008. “Longer timelines translate...