Federal regulators said they are nearly finished writing the final rule on risk retention in non-agency mortgage securitizations, including a revised definition for qualified residential mortgages. Issuance of the rule was delayed until the Consumer Financial Protection Bureau finished its ability-to-repay rule which set standards for qualified mortgages. “QM coming out really now does allow us to finish it,” Federal Reserve Governor Daniel Tarullo said of the risk-retention rule ...

Federal regulators are under pressure from Congress and others to bring more mortgage-related lawsuits, particularly involving “Wall Street banks.” Obama administration officials and former employees of the regulators suggest that more lawsuits are likely, including a focus on non-agency mortgage-backed securities. The latest calls for lawsuits came last week from Sen. Elizabeth Warren, D-MA. At a hearing by the Senate Banking, Housing and Urban Affairs Committee, she questioned how much ...

FCI Lender Services ended December with $2.3 billion of private money loans in its servicing portfolio, a 27 percent gain from the same period a year earlier. The nation’s largest private money servicer said it is seeing an increase in contracts and growth in “soft money” loans backed by residential real estate. Gordon Albrecht, chief strategy officer at FCI, said soft money loans currently account for 50 percent of the firm’s business, which is based in Anaheim, CA. “That’s a record for us,” ...

The Treasury Department approved $10.0 million in federal funds this month for a limited pilot of a program to allow non-agency borrowers with negative equity to refinance. The program in Oregon’s Multnomah County includes characteristics of a proposal from Sen. Jeff Merkley, D-OR, who said the pilot could create a national model. The Oregon Housing and Community Services Department will use money from the Hardest Hit Fund to help non-agency mortgages with loan balances up to $250,000 and ... [Includes one brief]

The ranks of non-agency mortgage-backed security issuers are set to expand beyond Redwood Trust and Credit Suisse, but industry analysts note that issuance remains constrained due to bank portfolio execution and the government-sponsored enterprises. At the American Securitization Forum’s ASF 2013 conference last week in Las Vegas, Laurie Goodman, a senior managing director at Amherst Securities Group, predicted $25 billion to $30 billion in new non-agency MBS will be issued this year, the most ...

Two real estate investment trusts are working toward joining Redwood Trust in issuing new non-agency jumbo mortgage-backed securities. Two Harbors Investment and PennyMac Mortgage Investment Trust are acquiring jumbos with plans to securitize the loans and potentially hold the subordinate tranche, a model similar to Redwood’s efforts. Two Harbors first announced its intentions to issue new non-agency MBS in 2011, with a goal for issuance at the end of that year. Thomas Siering, president and CEO ...

Issuers, investors and even regulators agree that underwriting standards for non-agency mortgage-backed securities will have to loosen for the sector to grow. “We have to start moving down the credit spectrum,” said Sharif Mahdavian, a director and analytical manager of residential MBS at Standard & Poor’s. Speaking at the American Securitization Forum’s ASF 2013 conference last week in Las Vegas, he said non-agency originations could easily move from “shocking prime” to ...

The owners of Citadel Servicing are moving closer to raising capital in the range of $100 million to $200 million, but as Inside Nonconforming Markets went to press this week, they weren’t taking telephone calls about the transaction. The privately held Citadel is based in Orange County, CA. Its CEO is Dan Perl, a former thrift executive who has worked in nonprime but exited the business before the market crashed. Although Perl has declined interviews, at least two sources close to the company ...

Reform of the government-sponsored enterprises still appears to be years away and might not be a priority until non-agency mortgage originations increase significantly, according to industry analysts. Non-agency market participants counter that Fannie Mae and Freddie Mac are hindering non-agency originations. “The better the GSEs do, the less impetus there is for Congress to do anything,” Amy Overton, a vice president of federal government affairs at Citi, said last week at the American Securitization Forum’s ...

The government-sponsored enterprises will soon issue pilot non-agency risk-transfer transactions, according to officials at the Federal Housing Finance Agency, Fannie Mae and Freddie Mac. The GSEs missed a third quarter 2012 deadline set by the FHFA to issue risk-sharing transactions due to complications with the Commodity Futures Trading Commission. Patrick Lawler, chief economist at the FHFA, said a risk-sharing transaction will hopefully be issued in the “not too distant future.” Speaking at the ...