The Fed’s proposed rule regarding ability-to-repay requirements and prepayment penalties, along with a proposed rule regarding escrows issued earlier this year would render all of current rules specific to higher-priced mortgages unnecessary, according to the Fed. When finalized, the rules will effectively supersede...

Non-agency participants warn that qualified residential mortgage rules recently proposed by federal regulators will severely limit non-governmental participation in the securitization market. Federal regulators counter that their risk-retention proposal will actually help the non-QRM market. Last week, the sides argued...

The enforcement action taken last week by federal regulators against 14 servicers was the first in a series of servicing reforms and punishments. Regulators are looking into taking action against non-bank servicers, state attorneys general continue to threaten action and federal monetary penalties against servicers remain...

Bank of America and mortgage insurer Assured Guaranty last week reached the biggest settlement to date regarding the bond insurance industry and non-agency mortgage-backed securities. The settlement sets a high bar for future non-agency buyback claims, according to industry analysts. BofA estimates...

Non-agency participants – particularly mortgage-backed security investors – submitted “widely positive” comments regarding Fitch Ratings’ proposed model for rating jumbo MBS. While the Mortgage Bankers Association was critical of Fitch’s proposal to link MBS rating to home prices, Brian Bertsch, a Fitch spokesman, said...

The proposed ability-to-repay rule released this week by the Federal Reserve included special provisions regarding balloon mortgages. Small lenders operating predominantly in rural or underserved areas would be allowed to originate mortgages that would receive “qualified mortgage” protections. “This option is meant to...

Mortgage investors are beginning to pay more for seasoned non-agency mortgages and demand remains high, according to industry analysts. The sector was also helped by the Federal Reserve’s sale this month of up to $1.33 billion in non-agency mortgage-backed securities acquired from American International Group. “The opening salvo from...

Non-agency participants have expressed optimism that legislation to create a framework for covered bonds in the U.S. will be approved by Congress this year. Supporters note that the framework will bring more private capital into the mortgage market. At a panel discussion hosted this week by...

Strategic defaulters display a different type of credit behavior than distressed borrowers who miss payments, according to new research from FICO. “Strategic defaulters tend to be more savvy managers of their credit than the general population, with higher FICO scores, lower revolving balances, fewer instances of...

Jumbo mortgage originations held up better than the overall market in early 2011, but more of the strength in the sector came from agency programs, according to a new Inside Mortgage Finance ranking and analysis. Mortgage lenders originated an estimated $51.2 billion of new loans that exceeded the bench-mark $417,000 conforming loan limit during the first quarter of 2011. That was down 7.8 percent from the fourth quarter of last year, a much better showing than the 35.0 percent downturn in total mortgage originations during the same period. In fact, loans exceeding $417,000 accounted for...[includes two data charts]