A federal district court in New York last week ruled that a landmark discrimination lawsuit, the first to connect racial discrimination to the securitization of mortgage-backed securities, can move forward against Morgan Stanley. A July 25 ruling by the U.S. District Court for the Southern District of New York in Adkins v. Morgan Stanley denied in part the investment bank’s motion to dismiss the case, which alleges violations of the Fair Housing Act and the Equal Credit Opportunity Act. The putative class-action suit was filed...

State and federal regulators appear to be close to getting more servicers to agree to a settlement similar to the $25 billion deal agreed to by five big banks.

Richmond, CA, is set to become the first city to implement the highly controversial eminent domain plan offered by Mortgage Resolution Partners.

Credit Suisse issued a non-agency jumbo MBS with loans seasoned an average of three months that had interest rates well below current rates.

Small, unidentified lenders are accounting for an increasing share of contributions to non-agency jumbo mortgage-backed securities.

The Federal Reserve expects to take further action on mortgage risk retention rules in September.

Federal prosecutors and members of the Justice Department’s Residential MBS Working Group are reportedly considering a new strategy for criminally charging Wall Street bankers for alleged fraud in their packaging and sale of MBS backed by subprime mortgages at the peak of the housing frenzy. According to Reuters, the members of the working group are eye-balling a shift in strategy that would involve moving away from the more widely used securities fraud charges to the less common offense of bank fraud. “Perpetrators of bank fraud can be charged up to 10 years after their crimes, compared with the five-year statute of limitations on securities fraud, which has already run out on most events leading up to the 2008 financial crisis,” Reuters reported. “A bank fraud conviction carries up to $1 million in fines and a maximum prison sentence of 30 years.” Laurence Platt, financial services practice leader in the Washington, DC, office of the K&L Gates law firm, said...

Small lenders have accounted for a growing share of contributions to non-agency jumbo mortgage-backed securities. Some deals have included more than 70 lenders, with most of the lenders contributing less than 5 percent of the volume of mortgages included in a security. While the lenders’ individual contributions to a particular jumbo MBS are small, they add up to significant market share, particularly when issuers don’t identify the lenders in prospectus documents filed with the Securities ... [Includes two data charts]

Rising interest rates haven’t stopped JPMorgan Chase and Redwood Trust from working on new non-agency jumbo mortgage-backed securities with loans originated in the lower-rate environment. Chase’s security will include mortgages with an average age of four months, while the mortgages in Redwood’s jumbo MBS are about two months old. The weighted average gross coupon on mortgages in Chase’s $345.05 million non-agency jumbo MBS is 3.79 percent, well below the average 4.68 percent interest rate quoted ...

Freddie Mac sold $500 million in non-guaranteed credit risk this week as part of an effort to eventually reduce the government-sponsored enterprises’ market share and help price their guaranty fees. While non-agency investor appetite for the transaction was strong, industry analysts suggest that the deal has limited usefulness for the long-term goals set by the Federal Housing Finance Agency. The Structured Agency Credit Risk Debt Notes Series 2013-DN1 included four tranches, all unrated. The two mezzanine ...