PennyMac Mortgage Investment Trust plans to issue its first non-agency jumbo mortgage-backed security in the third quarter of 2013 by combining $393.0 million of non-agency jumbos it recently acquired in a bulk transaction with mortgages from its correspondent lenders. The real estate investment trust said it acquired $107.0 million in non-agency jumbos via its conduit in the second quarter, along with $8.0 million in the first three months of 2013. “Jumbo originations have been affected by the ...

President Obama this week endorsed a reduction in the FHA’s high-cost loan limits and called on the Federal Housing Finance Agency and the Department of Housing and Urban Development to consider further decreases to reduce conforming loan limits. The proposal was included in a fact sheet that accompanied Obama’s speech this week on housing. The FHA’s high-cost loan limits are scheduled to be reduced at the end of this year. “HUD and FHFA should closely examine using their existing authorities to reduce ...

One of the last non-agency jumbo mortgage-backed securities issued before the securitization market effectively closed in 2008 is the subject of similar lawsuits by the Department of Justice and the Securities and Exchange Commission. Bank of America issued the $855.7 million security in January 2008, as well as originated and serviced the loans included in the MBS. The regulators cite internal reports from BofA as well as email communications among employees to allege that BofA provided inadequate ...

Credit Suisse issued its latest non-agency jumbo mortgage-backed security last week and, in a change of pace, included a significant portion of 15-year fixed-rate mortgages in the deal. The $597 million CSMC Trust 2013-6 included mortgages that have seasoned for an average of three months with a weighted-average coupon of 3.56 percent, according to a rating report from DBRS. The seasoning on the mortgages wasn’t out of the ordinary compared with other recent issuance by Credit Suisse, but the average ...

The government-sponsored enterprises’ holdings of vintage nonprime mortgage-backed securities declined in the second quarter of 2013 due to sales as well as runoff. Fannie Mae and Freddie Mac are working toward the goal set by the Federal Housing Finance Agency to sell 5.0 percent of the non-agency and less liquid mortgage-related assets they held in their retained portfolios at the end of 2012. Combined, the government-sponsored enterprises held $96.48 billion in nonprime MBS as of ... [Includes one data chart]

Ocwen Financial is preparing to enter a settlement with state regulators similar to the $25 billion national servicing settlement. A person with knowledge of the negotiations said regulators are working on settlements with individual servicers as opposed to the multi-servicer agreement with five banks announced last year. “We look forward to finalizing this process, which we expect will occur very soon,” Ronald Faris, Ocwen’s president and CEO, said last week during an earnings call. The servicer said ...

A unique lawsuit against Morgan Stanley was recently allowed to move forward though legal analysts questioned the ruling. The lawsuit charges Morgan Stanley with racial discrimination, claiming that the investment bank violated the Fair Housing Act by encouraging New Century Financial to offer high-risk mortgages to African-American borrowers. Disparate impact cases typically target originators, but New Century is long out of business. Morgan Stanley was hit with the lawsuit because it was ...

Three non-agency mortgage-backed security trustees filed lawsuits this week against Richmond, CA, which plans to use eminent domain to purchase mortgages with negative equity. The city recently sent letters to servicers and trustees of non-agency MBS offering to purchase 624 mortgages. If the MBS trustees do not sell the loans for the offered price of 80 percent of the current value of the properties, Richmond Mayor Gayle McLaughlin, a member of the Green Party, said the city intends to ...

Carrington Mortgage Services recently reversed its response to a survey regarding accounting for principal forbearance. The servicer initially told Fitch Ratings that it reported all forbearance amounts as losses on modifications and will continue to report forbearance mods as losses at the time of modification. However, near the end of July, Carrington said it has approximately $300 million in principal forbearance amounts that haven’t been reported as losses ... [Includes four briefs]

The question of whether the FHA should allow the refinancing of underwater mortgages seized through eminent domain has reemerged as a key issue following a recent decision by the city of Richmond, CA, to use its authority to take over distressed mortgages for restructuring. There is a new twist to the question, however. Could FHA’s refusal to refinance such mortgages be deemed discriminatory against cities and homeowners if eminent domain programs meet the requirements of the FHA Short Refinance program? Is that tantamount to redlining? A top executive of Mortgage Resolution Partners, which developed the eminent domain strategy to help underwater homeowners at risk of foreclosure, said ...