Redwood Trust late last week reported net income of $40.0 million for the third quarter of 2012, including $3.0 million in net gains on the $372.0 million of non-agency MBS issuance and whole loan sales the real estate investment trust completed during the period. Redwood officials said the company is well-positioned for growth in non-agency MBS issuance, commercial MBS issuance and soon agency origination activity. In a quarterly review, company officials noted that some have called the REIT “crazy” for resuming issuance of non-agency MBS after the financial crisis of 2007. Redwood has issued eight non-agency MBS since April 2010 totaling $2.6 billion. The REIT said...

The ACLU is calling for changes to federal anti-discrimination statutes to deter secondary mortgage market participants from engaging in business practices that might have a discriminatory impact on certain protected classes of borrowers. In a recent analysis of mortgage foreclosures, the ACLU said the origination and securitization of subprime and other high-risk mortgage products have hurt minority families and caused the loss of 3.5 million homes to foreclosure. The ACLU believes...

“The return of non-agency MBS for prime loans is a lot further along than market observers might think,” officials at Redwood Trust said last week. The company said its goal is to issue $900 million or more in non-agency MBS each quarter within the next 12-to-18 months and eventually finance mortgages for prime borrowers “who do not fit into today’s tight credit box.” Through 10 months in 2012, Redwood averaged $498.31 million in quarterly non-agency MBS issuance, according to the Inside Mortgage Finance ...

After winning multiple bids to acquire mortgage servicing rights and subservicing on nonprime loans and agency mortgages, nonbank servicers were outbid last week for the latest major agency MSR acquisition. Industry analysts suggest that the somewhat unexpected competition from banks could hinder planned expansion by Ocwen Financial, Nationstar Mortgage and Walter Investment Management. JPMorgan Chase Bank is set to acquire $70.0 billion in agency MSRs from MetLife. “The acquisition of this ...

The Securities and Exchange Commission has been quietly meeting with investors in non-agency mortgage-backed securities looking for leads to bring regulatory actions. Reaction from investors to the SEC’s outreach has been decidedly mixed, though Reid Muoio, a deputy for the SEC’s structured and new products unit, said the SEC is working to improve regulation on behalf of investors. Speaking at the recent ABS East conference sponsored by Information Management Network in Miami, Muoio detailed an SEC outreach program that was apparently previously undisclosed. He said that a ...

A final rule from the Consumer Financial Protection Bureau defining “qualified mortgages” could come as soon as this month. Participants in the non-agency mortgage market appear to be anxiously awaiting the QM rule that will establish ability to repay standards and the related qualified-residential mortgage rule on risk retention for securitized mortgages. “At least tell us what the rules of the road are, then we can react,” Eric Kaplan, a managing director at Shellpoint Partners, said at the recent ABS East ...

Investors interested in buying new non-agency mortgage-backed securities suggest that the wide variety seen in the pooling and servicing agreements and reporting of vintage non-agency MBS is insufficient. Many investors at the recent ABS East conference in Miami sponsored by Information Management Network called for standardization. “Investors clearly welcome standardization,” said Dapeng Hu, a managing director at BlackRock, which manages more than $150.0 billion in MBS investments ...

If implemented as proposed, Basel III capital requirements would force major changes for bank lenders and servicers, according to industry participants. Originations of non-agency mortgages would remain limited, mortgage holdings would be sold and borrowers would face additional costs. Rules to implement Basel III were proposed in June by the Federal Deposit Insurance Corp., the Federal Reserve and the Office of the Comptroller of the Currency. Comments were due in October and some industry ...

Wells Fargo was the top jumbo lender in 2011, according to a ranking by affiliated publication Inside Mortgage Finance based on Home Mortgage Disclosure Act data compiled by ComplianceTech/Lending Patterns. Among the states, California dominated jumbo volume again. Wells originated $25.13 billion in mortgages with balances greater $625,000. The high-cost conforming loan limit for the government-sponsored enterprises fell from $729,750 to $625,500 in October 2011, while the FHA’s ... [Includes two data charts]

Lenders are seeking exemptions large and small from proposed appraisal requirements aimed at subprime mortgages. Without the exemptions, industry participants warn that borrowers will face higher costs and some lenders will stop originating what they claim are vital subprime mortgages. In August, federal regulators proposed requiring a physical inspection of a property’s interior by a qualified appraiser for originations of “higher-risk mortgages.” If a property was sold within 180 days at a lower price ...