Look for increased volume of new non-agency mortgage-backed securities issuance – and more companies issuing these deals – in 2013, industry analysts say. Underwriting standards could loosen somewhat as investor demand strengthens. Through the beginning of December, $3.46 billion in non-agency jumbo MBS was issued in 2012, according to the Inside Mortgage Finance MBS Database. Redwood Trust accounted for 56.7 percent of that volume, with an affiliate of Credit Suisse Group accounting for the rest ...

Credit Suisse’s jumbo conduit is increasing its acquisitions and looking to issue more non-agency jumbo mortgage-backed securities, according to Luke Scolastico, a vice president at Credit Suisse. “We’re buying loans every day,” he said last week at a panel discussion hosted by the American Securitization Forum. “More last month than the month before, and more that month than the month before.” Credit Suisse has issued $1.50 billion in non-agency MBS so far in 2012. While the first deals ...

Bank and thrift holdings of first-lien mortgages increased by 3.6 percent in the third quarter of 2012 compared with the third quarter of 2011, according to a new ranking and analysis by Inside Nonconforming Markets. The growth, outpacing portfolio runoff and an overall decline in mortgage debt outstanding, is tied to non-agency mortgages as well as agency-eligible loans being retained by banks. Industry participants are divided on whether the first-lien holdings will ... [Includes one data chart]

The guaranty fees charged by Fannie Mae and Freddie Mac are close to hitting a tipping point where non-agency mortgage-backed security issuance will be the more economic execution for new originations, according to some non-agency participants. “If the non-agency pricing is improving and the GSE pricing is worsening, at some point you’re going to hit a tipping point,” Luke Scolastico, a vice president at Credit Suisse, said last week at a panel discussion hosted by the American Securitization Forum ...

Fannie Mae and Freddie Mac, under directions from the Federal Housing Finance Agency, are close to issuing risk-sharing transactions, according to market participants. The securities will be structured to allow non-agency investors to take subordinate risk on government-sponsored enterprise mortgage-backed securities and will likely help set GSE guaranty fees going forward. Martin Hughes, CEO of Redwood Trust, said his company is currently under a non-disclosure agreement regarding risk-sharing ...

Investors in non-agency mortgage-backed securities are pushing back against a loan modification program proposed by the Obama administration that would target underwater loans backing their investments. “Quite simply, investors have already been significantly harmed by the poor performance of many of the mortgage loans in non-agency MBS, and the Market Rate Modification proposal would only increase the severity of losses suffered by institutional investors,” Tom Deutsch ...

The Consumer Financial Protection Bureau is considering expanding the size and scope of the exemption on its pending final rule regarding servicing practices, according to agency officials. The CFPB also downplayed concerns that the servicing rule will expand loss-mitigation options beyond those approved by mortgage investors. During a webinar this week hosted by Inside Mortgage Finance, Mitchell Hochberg, regulatory counsel at the CFPB, said the agency is “very heavily” thinking about ...

At least two nonprime industry veterans are out in the market actively trying to raise funds to start lending operations, according to interviews conducted by Inside Nonconforming Markets. Whether they will be successful is another matter. Jon Daurio, a founder and former top executive at the now defunct Encore Capital, is trying to raise $250 million and hopes to have much of the work tied to his capital raise completed by the end of the first quarter of 2013. Daurio has been working on raising money ...

Damage from Hurricane Sandy will have a negligible impact on mortgages in outstanding non-agency mortgage-backed securities, according to a new analysis by Opera Solutions. The servicing analytics provider said 45 non-agency MBS deals with $19.6 billion in outstanding balance have mortgages with exposure to significant damage from the storm and the likely affected balance is $6.0 billion. “Based on a detailed analysis of each portion of affected ZIP codes, the ultimate exposure is much lower ... [Includes four briefs]

The FHA this week announced additional measures to restore the financial health of its insurance fund and better protect consumers, including tighter underwriting on new FHA loans and elimination of a widely used standard fixed-rate reverse mortgage product. Acting FHA Commissioner Carol Galante unveiled the latest structural reforms in a Dec. 18 letter to Sen. Bob Corker, R-TN, who has repeatedly expressed concerns over the slow pace of reforms at FHA. The reforms address issues the senator raised with Department of Housing and Urban Development Secretary Shaun Donovan at a Dec. 6 Senate Banking, Housing and Urban Affairs Committee hearing on ...