Ally Financial, the former parent of bankrupt Residential Capital, announced last week it will pay $2.10 billion to settle legal claims with ResCap and its creditors as part of ResCap’s comprehensive settlement agreement and Chapter 11 plan. Under the settlement, Ally will contribute $1.95 billion in cash to the ResCap bankruptcy estate, plus $150 million in insurance proceeds. The agreement also requires that Ally receive full repayment on its secured claims, including $1.13 billion that is owed under existing credit facilities. Announced earlier this month, the agreement gets...

Home prices are improving at a rapid pace throughout the nation, sparking bidding wars in certain markets, according to several different indices. But this rise in “home equity” is also spurring talk that the two largest players in residential finance – Fannie Mae and Freddie Mac – could be sitting on large unrealized gains in both their MBS and whole loan portfolios. One veteran MBS investor told Inside MBS & ABS that home values have improved so much over the past 120 days that the government-sponsored enterprises may be looking at “monster” increases in the value of their holdings. “Keep in mind that these two are sitting on loans where a year ago the loan-to-value ratio was 115 percent,” said this investor. “But most of this stuff isn’t underwater anymore. If [the GSEs] re-calculate their reserves, they will see some huge gains.” In its 10-Q filing for the first quarter, Fannie reported...

Non-agency MBS execution for certain high-quality mortgages is competitive with agency MBS execution, according to industry analysts. A slight increase in the guaranty fees charged by the government-sponsored enterprises would make non-agency securitization even more attractive, though the incentive for banks to hold non-agency originations in portfolio remains strong. Non-agency MBS execution is currently competitive with agency MBS execution for purchase mortgages with loan-to-value ratios below 70 percent and credit scores above 740, according to analysts at Barclays Capital. “For the cleanest collateral, non-agency execution could be...

Consumer advocate Ralph Nader doesn’t exactly have a seat at the mortgage reform table, but that isn’t stopping him from asking the Treasury Department to do something to protect what he calls “the already financially injured common shareholders” of Fannie Mae and Freddie Mac. In a recent letter to Treasury Secretary Jack Lew, Nader blames a host of senior government officials – including Federal Reserve Chairman Ben Bernanke – for misleading investors about the financial health of Fannie and Freddie just months before they were seized by the federal government in September 2008. Nader, a one-time shareholder in the government-sponsored enterprises, is pushing...

Legislation introduced last week by a Senate Republican would revoke the charters of Fannie Mae and Freddie Mac and create a new Mortgage Finance Agency for the securitization of single-family and multifamily mortgages. Meanwhile, a separate bipartisan Senate bill still in the works would also dispense with the existing two government-sponsored enterprises while building a new one. Filed on May 23 by Sen. Johnny Isakson, the Mortgage Finance Act of 2013 is patterned on legislation the Georgia Republican proposed in 2011. It would put the GSEs into “irrevocable receivership,” with the Federal Housing Finance Agency tasked as their receiver no later than 18 months after enactment of the bill. “Immediately upon placement of the enterprises into receivership, the FHFA shall commence...

The estimated $119 billion in purchase-mortgage originations during the first quarter was up 15 percent over the level at the same point in 2012.

Banks and thrifts reported $7.7 billion in mortgage banking income during the first three months of 2013, a 16 percent jump from the previous quarter.

A new bill to replace Fannie and Freddie with a single government guarantor is already being dismissed.

Nonbank servicers had an average of 275 loans per employee in the second half of 2012, according to Fitch, about the same level seen since 2010.

Bank investment in residential MBS fell 1.1 percent during the first quarter of 2013 to $1.562 trillion.