Residential Capital’s bankruptcy filing last week was part of an effort to settle repurchase claims sought by non-agency mortgage-backed security investors. In conjunction with the bankruptcy, 17 institutional investors agreed to an $8.7 billion claim that will need approval by the court and is unsecured, suggesting that the final settlement payout could be much lower. ResCap is a subsidiary of Ally Financial. Michael Carpenter, CEO of Ally, said the bankruptcy gives Ally further distance from “very large” rep and warrant claims ...

While non-agency mortgage-backed security investors did not file a formal challenge to the $25.0 billion servicing settlement, they remain concerned with the implementation of principal forgiveness loan modifications. The latest qualms were raised last week in a letter to Shaun Donovan, secretary of the Department of Housing and Urban Development, from Sens. Sherrod Brown, D-OH, and Bob Corker, R-TN. “Because any settlement could dramatically affect [pension funds and retirement funds], their managers should ...

The still-developing market for real estate-owned property rentals is starting to get crowded. A number of firms have formed in recent weeks hoping to benefit from low prices on REO properties. Homebuilder Beazer Homes announced this month that it formed a private real estate investment trust to acquire, refurbish and lease single-family homes on a large scale in select markets. Beazer Pre-Owned Rental Homes was arranged by affiliates of Kohlberg Kravis Roberts & Co. and has approximately $85 million in funding ...

Fannie Mae and Freddie Mac have made significant progress in recovering from the losses on the nonprime mortgages they purchased and guaranteed before 2009. In the first quarter of 2012, both of the government-sponsored enterprises touted that mortgages acquired in and after 2009 now account for the majority of their single-family holdings. The GSEs held a combined $386.01 billion in nonprime purchased/guaranteed mortgages as well as nonprime mortgage-backed securities at the end of the first quarter of 2012 ... [Includes one data chart]

Although mortgage delinquency rates have improved in recent quarters, industry participants say there are still plenty of opportunities to buy and sell distressed mortgages. Some $400 billion in nonperforming residential mortgages remain on U.S. banks’ balance sheets, according to estimates by officials at PennyMac Mortgage Investment Trust. “I don’t think we’ve come near working through this,” said Kevin Lahr, director of valuation services at Digital Risk. “We’re halfway through this, maybe.” Speaking at ...

Among non-agency mortgages, jumbo loans benefit the most from short sales, according to new research by Barclays Capital. The use of short sales is also increasing across non-agency mortgages as investors and borrowers tend to benefit from the liquidation technique.Barclays said the loan amount plays a major factor in a servicer’s liquidation decision. “A servicer is more likely to be focused on utilizing a short sale to reduce the severity on a $500,000 loan by 5 percent, for a $25,000 benefit, than to ...

The Residential Mortgage-Backed Securities Working Group announced a new website this week for whistleblowers to submit tips regarding potential fraud involving non-agency mortgage-backed securities. “There are scores of people who worked in the residential MBS market who acted responsibly but who also may have witnessed greed and misconduct that crossed the legal line and created havoc for investors, homeowners and our economy,” said Acting Associate Attorney General Tony West. “We want to hear from them ... [Includes seven briefs]

“The private market will never come back if the best deal for the private investor is the government,” Lewis Ranieri, chairman and founding partner of Ranieri Partners, said this week at the Mortgage Bankers Association’s National Secondary Market Conference in New York City. Talk at the conference focused on almost anything other than activity in the non-agency market. David Stevens, president and CEO of the MBA, said dealing with repurchase issues ...

After a tough economic environment had officials at Redwood Trust considering whole loan sales in lieu of non-agency securitization, the real estate investment trust revealed last week that it profited from the two securities it issued during the first quarter of 2012. However, the REIT is still set to complete some whole-loan sales and even intends to add conforming-balance loans to its product menu ...

EverBank completed a $192 million initial public offering of its stock last week, resulting in a deal that was 41 percent smaller than originally planned. The bank has recently expanded its retail and correspondent jumbo lending with an emphasis on cross-selling products to wealthy borrowers. “The availability of jumbo mortgages has significantly contracted,” EverBank said in an IPO-related filing with the Securities and Exchange Commission. “Because we originate ...