Bexil American Mortgage, a newly formed originator, plans to originate non-agency mortgages and sell them to Citi, Wells Fargo and PennyMac. John Robbins, president of Bexil American Mortgage, said the stagnant non-agency securitization market has not completely stopped sales of jumbo mortgages. “There are active investors for those products today,” he said last week on a call with investors. ...

In a somewhat unusual announcement last week, Walter Investment Management said it was servicing approximately 910,000 loans representing approximately $59.0 billion of unpaid principal balance as of the end of the third quarter of 2011. The announcement was unusual because that was the extent of the statement. “We believe the major increase in the servicing portfolio could be due to Walter being allocated a portion of the servicing rights related to the Fannie Mae/Bank of America deal, whereby Bank of America sold the servicing rights to 400,000 loans to Fannie Mae,” said analysts at FBR Capital Markets. ...

Acquisitions of large non-agency portfolios by Bank of America and JPMorgan Chase resulted in poor servicing performance, according to a new analysis by Moody’s Investors Service. Successful borrower-contact initiatives, meanwhile, resulted in significantly improved servicing performance for others. “Integrating the servicing platforms, employees, processes, and technologies into their servicing operations overwhelmed the banks, reducing their ability to proactively address the increased number of problem loans in their combined portfolios,” Moody’s said. ...

Significant declines in jumbo mortgage-backed security prices tracked by the PrimeX index in recent weeks were due to investor panic, not collateral fundamentals, according to industry analysts. The sell-off began earlier this month after Fitch Ratings downgraded a number of jumbo securities and warned of negative equity, prompting fears of strategic defaults. Prices on the usually steady PrimeX index fell by as much as 10.0 percent from the beginning of October. Some of the sub-indices even fell below par for the first time. ... [includes one data chart]

The top three rate-spread lenders in 2010 were major banks – largely because of the sheer size of their total originations rather than a focus on rate-spread lending, according to an analysis of new Home Mortgage Disclosure Act data by ComplianceTech and Inside Nonconforming Markets. Meanwhile, Texas accounted for the largest share of rate-spread lending during the year. ... [includes two data charts]

Bank of America’s proposed $8.5 billion settlement with non-agency mortgage-backed security investors was officially moved to federal court this week. The change of venue from state court – requested by a group of investors known as Walnut Place – will likely lengthen the amount of time it takes the settlement to close and could lead to the settlement being renegotiated with better terms for investors. ... [includes six briefs]

Despite low mortgage rates and home prices, significant barriers still stand in the way of a potential first-time homebuyer. A new tax-preferred mechanism for downpayment savings could work towards lowering these barriers, with the added benefit of incentivizing saving habits, according to a policy brief from the Progressive Policy Institute. The “HomeK” account would be carved out of savings mechanisms such as individual retirement accounts and 401(k) accounts allowing a person to separate up to 50 percent of employee contributions into a sub-account. Account-holders could then disburse their money to make a...

The improvements that the Federal Housing Finance Agency is expected to make to the government’s Home Affordable Refinance Program will likely come at the expense of MBS investors, say experts. The outlines of an expanded HARP are far from clear, but the FHFA is said to be giving serious consideration to lifting the 125 percent loan-to-value limit, in addition to waiving loan-level pricing adjustments, representation and warranties imposed on lenders, valuation requirements and the portability of mortgage insurance. The agency, which oversees Fannie Mae and Freddie Mac, is expected to make an...

Investors in non-agency mortgage-backed securities would rather not fight in court to enforce buybacks, according to Talcott Franklin, shareholder of his namesake law firm. However, Franklin said litigation has been necessary because servicers – largely those affiliated with lenders or MBS issuers – have not done enough to prevent losses. “If the banks can get it together on the servicing side and try to reduce these losses, that is going to be the best way for them to proactively reduce these [buyback] risks,” he said this week during a webinar hosted by Inside Mortgage Finance Publications. ...

The servicing compensation structure for non-agency mortgages must be reformed, according to Federal Reserve Governor Sarah Bloom Raskin. The Federal Housing Finance Agency noted that the options it proposed for agency mortgages last week could also serve as a model for non-agency mortgages and could help revive the sector. “It is imperative to reconsider the compensation structure so that servicers have adequate incentives to perform payment processing efficiently on performing mortgages, and to perform effective loss mitigation on delinquent loans,” Raskin said in a speech this week. ...