“There are a number of developments that are reflective of a more mature and fully functioning securitization market,” Brett Nicholas, president of Redwood Trust, said last week. Among other issues, he noted the recent jumbo mortgage-backed security issuance by a subsidiary of Credit Suisse Group. Nicholas’ remarks at the JMP Securities research conference last week were some of the first by Redwood officials regarding competition on jumbo MBS issuance. Until the $741.94 million issuance by Credit Suisse ...

Residential Capital’s bankruptcy filing last week was part of an effort to settle repurchase claims sought by non-agency mortgage-backed security investors. In conjunction with the bankruptcy, 17 institutional investors agreed to an $8.7 billion claim that will need approval by the court and is unsecured, suggesting that the final settlement payout could be much lower. ResCap is a subsidiary of Ally Financial. Michael Carpenter, CEO of Ally, said the bankruptcy gives Ally further distance from “very large” rep and warrant claims ...

While non-agency mortgage-backed security investors did not file a formal challenge to the $25.0 billion servicing settlement, they remain concerned with the implementation of principal forgiveness loan modifications. The latest qualms were raised last week in a letter to Shaun Donovan, secretary of the Department of Housing and Urban Development, from Sens. Sherrod Brown, D-OH, and Bob Corker, R-TN. “Because any settlement could dramatically affect [pension funds and retirement funds], their managers should ...

The still-developing market for real estate-owned property rentals is starting to get crowded. A number of firms have formed in recent weeks hoping to benefit from low prices on REO properties. Homebuilder Beazer Homes announced this month that it formed a private real estate investment trust to acquire, refurbish and lease single-family homes on a large scale in select markets. Beazer Pre-Owned Rental Homes was arranged by affiliates of Kohlberg Kravis Roberts & Co. and has approximately $85 million in funding ...

Fannie Mae and Freddie Mac have made significant progress in recovering from the losses on the nonprime mortgages they purchased and guaranteed before 2009. In the first quarter of 2012, both of the government-sponsored enterprises touted that mortgages acquired in and after 2009 now account for the majority of their single-family holdings. The GSEs held a combined $386.01 billion in nonprime purchased/guaranteed mortgages as well as nonprime mortgage-backed securities at the end of the first quarter of 2012 ... [Includes one data chart]

Although mortgage delinquency rates have improved in recent quarters, industry participants say there are still plenty of opportunities to buy and sell distressed mortgages. Some $400 billion in nonperforming residential mortgages remain on U.S. banks’ balance sheets, according to estimates by officials at PennyMac Mortgage Investment Trust. “I don’t think we’ve come near working through this,” said Kevin Lahr, director of valuation services at Digital Risk. “We’re halfway through this, maybe.” Speaking at ...

Among non-agency mortgages, jumbo loans benefit the most from short sales, according to new research by Barclays Capital. The use of short sales is also increasing across non-agency mortgages as investors and borrowers tend to benefit from the liquidation technique.Barclays said the loan amount plays a major factor in a servicer’s liquidation decision. “A servicer is more likely to be focused on utilizing a short sale to reduce the severity on a $500,000 loan by 5 percent, for a $25,000 benefit, than to ...

The Residential Mortgage-Backed Securities Working Group announced a new website this week for whistleblowers to submit tips regarding potential fraud involving non-agency mortgage-backed securities. “There are scores of people who worked in the residential MBS market who acted responsibly but who also may have witnessed greed and misconduct that crossed the legal line and created havoc for investors, homeowners and our economy,” said Acting Associate Attorney General Tony West. “We want to hear from them ... [Includes seven briefs]

FHA-approved reverse mortgage lenders conducting any new financial assessments of elderly borrowers should not be overly restrictive to ensure that the Home Equity Conversion Mortgage program remains a viable option for cash-poor seniors, according to the National Council on Aging. The NCA, an advocacy group for elderly Americans, noted that lender assessments of borrowers’ ability to repay a HECM loan may be tough seniors with modest income who could not qualify for a conventional home loan would be left with fewer alternatives to tap home equity. The FHA does not have specific income requirements for HECM borrowers. However, policymakers are ...

Incentive payments to FHA servicers based on a compliance score will soon replace the current tier ranking-based inducements used by the Department of Housing and Urban Development to reward above par servicer performance. In an update to its servicer evaluation process, HUD said implementation of the National Servicing Center’s Servicer Performance Scorecard (SPS) is underway and the transition from Tier Ranking System (TRS) incentive payment to an SPS payment scheme will be announced in a mortgagee letter as soon as the implementation is completed. In the future, the SPS may be used as ...