We have to reduce uncertainty to bring private capital back, Shaun Donovan, secretary of the Department of Housing and Urban Development, said at the Mortgage Bankers Associations annual convention last week in Chicago. Industry participants remain divided on if or when non-agency securitization will resume in a significant manner. Daniel Arrigoni, president and CEO of U.S. Bank Home Mortgage, said U.S. Bank and other lenders must think about developing non-agency securitization capabilities as the federal government works toward reducing its involvement in housing finance. ...
The lower loan limits instituted this month for conforming mortgages opened a number of regional opportunities for non-agency lenders. As of Oct. 1, 250 counties have lower government-sponsored enterprise loan limits compared with the conforming loan limits of 2010, according to an analysis by affiliated publication Inside Mortgage Finance. Michael Fratantoni, vice president of single-family research and policy development at the Mortgage Bankers Association, said the portion of the market newly eligible only for non-agency financing is significant in comparison to the amount of non-agency jumbo originations in recent years. ... [includes one data chart]
Acquisitions of large non-agency portfolios by Bank of America and JPMorgan Chase resulted in poor servicing performance, according to a new analysis by Moodys 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, Moodys 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 Americas 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]
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 Securities and Exchange Commission is considering launching a civil injunctive action against Standard & Poors Rating Services, alleging violations of federal securities laws with respect to the companys ratings for a 2007 collateralized debt obligation. According to a Form 8-K filing this week by McGraw-Hill, the rating services parent, the federal agency is looking into S&Ps rating of Delphinus CDO 2007-1, which was to be mostly backed by non-agency residential MBS. In connection with the contemplated action, the [SEC] staff may recommend that the commission seek civil money penalties, disgorgement of fees and...
Redwood Trust is set to issue a non-agency mortgage-backed security backed by $375.2 million in jumbo mortgages, marking the issuers and the mortgage markets second new jumbo deal this year. Fitch Ratings is giving a AAA rating based on its new tougher standards, though it remains unclear whether another service will rate the transaction. A presale report issued last week by Fitch noted the strong characteristics of Redwoods Sequoia Mortgage Trust 2011-2. ...
Restrictions by the government-sponsored enterprises have not stopped one company from offering Property Assessed Clean Energy program loans. FIGtree Energy Resource Company, a San Diego company, is offering the California PACE program only for non-agency jumbo mortgages in certain jurisdictions. PACE programs offer loans for energy-efficiency home improvements. Beginning in July 2010, the GSEs stopped purchasing PACE-related mortgages that had automatic first lien priority over previously recorded mortgages. ...