Redwood Trust and the main lenders it sources mortgages from largely rank above average, according to new assessments by Moody’s Investors Service. Moody’s ranked Redwood Residential Acquisition Corp. above average as a jumbo aggregator based on the performance of Redwood’s collateral, lending practices, and operational stability. “In our view, Redwood has a stable, credit-savvy team with a sound lending philosophy that has successfully managed its way through the financial crisis,” the rating service said. Moody’s also ...

The field of firms looking to place ratings on non-agency mortgage-backed securities got a little more crowded last week. Morningstar Credit Ratings released its non-agency MBS rating guidelines with criteria similar to the five firms that have placed ratings on non-agency securities in recent years. Morningstar said it will provide “timely, unbiased and transparent” ratings on both new-issue and seasoned non-agency MBS. Securities will have to be able to withstand a “catastrophic event” to receive ...

Mortgage industry participants are concerned about plans by the Federal Housing Finance Agency to expand the non-agency market via a contraction of Fannie Mae and Freddie Mac. The comments were submitted to the FHFA last week in response to the FHFA’s proposed strategic plan for fiscal years 2013 to 2017. “To attract private capital to the mortgage market and reduce [government-sponsored enterprise] risk exposure, FHFA will direct the [GSEs] to price guarantee fees to levels that align pricing with ...

Attorneys representing non-agency mortgage-backed security issuers suggest fighting repurchase-request lawsuits to narrow the claims and eventually settling such lawsuits. Jason Halper and Martin Seidel, partners at the law firm of Cadwalader, Wickersham & Taft, said reducing the claims can help lead to a better settlement for issuers. “You can very often narrow the case substantially,” Seidel suggested this week during a presentation by the State Attorneys General Enforcement Network. Among other issues ...

With an increasing amount of PennyMac Mortgage Investment Trust’s revenue coming from correspondent originations, some have questioned how much longer the company will remain a real estate investment trust for tax purposes. Officials at the company said the REIT status remains beneficial, though they are considering other options. REITs must distribute at least 90 percent of their taxable income to their shareholders each year and generally are not subject to federal or state income taxes. REITs also face limitations ...

Berkshire Hathaway became the lead bidder for Residential Capital’s loan portfolio this week while Nationstar Mortgage remained the stalking horse bidder for ResCap’s mortgage servicing rights and origination platform. ResCap’s parent company Ally Financial was previously the top bidder for ResCap’s loan portfolio. Auctions for the MSRs, origination platform and loan portfolio are expected in October. An investigation by the Consumer Financial Protection Bureau helped a borrower receive a ... [Includes two briefs]

Competition for non-agency jumbo originations is increasing, according to industry participants. The interest, largely from big banks looking to hold jumbos in portfolio and real estate investment trusts looking to securitize the assets, has led to a decline in interest rates.“All of a sudden it’s the asset of choice because big banks are uncomfortable with other assets, so they’re coming at jumbo home mortgages,” Jim Herbert, CEO of First Republic Bank, a lender that has long-focused on jumbos, said ... [Includes one data chart]

More than 1,800 comment letters were apparently not enough. The Consumer Financial Protection Bureau reopened the comment period last week on the pending ability-to-repay rule, with an emphasis on data relating to debt-to-income ratios. The rule will define “qualified mortgages” and the Dodd-Frank Act mandates that it be finalized by January 21, 2013. Data on agency mortgages helped prompt the request for comments, and the CFPB said it is hoping for similar data on mortgages in non-agency mortgage-backed securities ...

Non-agency mortgage-backed security investors and politicians on both sides of the aisle were critical this week of the recent $25.0 billion servicing settlement. The settlement requires principal reduction loan modifications on mortgages held in five banks’ portfolios and allows the servicers to receive credit for reducing principal on mortgages in non-agency MBS. Vincent Fiorillo, a trading/portfolio manager at Doubleline Capital, noted that the Association of Mortgage Investors is not opposed to principal reduction mods ...

Walter Investment Management is scheduled next week to begin subservicing the first batch of up to 30,000 mortgages in non-agency mortgage-backed securities for Bank of America. The transfer will mark the latest shift from BofA to subservicers as part of a still-disputed $8.5 billion proposed settlement with non-agency MBS investors. Nine subservicers were approved as part of the settlement: Acqura Loan Services, Bayview Loan Servicing, FCI Lender Services, Nationstar Mortgage, Residential Credit Solutions ...