Commercial banks and savings institutions reduced their holdings of non-mortgage ABS again during the second quarter, according to a new Inside MBS & ABS analysis of call reports. Banks and thrifts held $147.55 billion of non-mortgage ABS as of the end of June, a 5.1 percent decline from the previous quarter. The banking industry’s aggregate ABS portfolio has been shrinking steadily since the end of 2013 and was down 15.2 percent over that period. Banks shed...[Includes two data tables]

Ginnie Mae this week revised its requirements for participating MBS issuers seeking approval of changes in their business status as a result of mergers, change of ownership or control, transfer of assets or a negative turn in their dealings with regulatory agencies. The agency decided to update the guidance because of the increasing number of requests from issuers, according to Ginnie Mae President Ted Tozer. The requests are getting more complex as well, he said. The agency’s Mortgage-Backed Securities Guide has been updated...

Lenders and investment banks are working to increase the issuance of ABS backed by loans from marketplace lenders. Attracting investors to the new asset class has proved somewhat difficult, however, and a recent court decision has put the business model of some marketplace lenders in limbo. Howard Altarescu, a partner and co-head of the global finance business unit at the law firm of Orrick, Herrington & Sutcliffe, noted marketplace lending started with internet-based lending platforms, including Lending Club and Prosper Marketplace, that matched individual investors looking to lend small capital amounts to borrowers in need of consumer loans. He joined other experts during a webinar on the topic hosted this week by the Securities Industry and Financial Markets Association. Altarescu said...

Servicing federal student loans would likely become more costly and cumbersome under a set of best practices recently issued by a White House-sponsored interagency panel. Back in March, the Obama administration assembled a group of officials from the Treasury Department, the Department of Education, the Office of Management and Budget, and the Domestic Policy Council to monitor trends in the government’s student loan portfolio, budget costs and borrower assistance efforts. As part of that effort, the task force was directed...

Regulatory fears are driving the desire by some owners/CEOs to exit the mortgage business, but we’ve heard that refrain before.

With the effective date of the Consumer Financial Protection Bureau’s integrated disclosure rule now just weeks away, industry representatives are escalating the amount of compliance advice they are offering to real estate agents and lenders. This week, the Mortgage Bankers Association released a variety of materials to facilitate complete conformity with the bureau’s pending disclosure rule under the Truth in Lending Act and the Real Estate Settlement Procedures Act ...

In the Fairholme Funds v. The United States case, Judge Margaret Sweeney ruled in favor of the Federal Housing Finance Agency to keep documents in the case sealed under “protected information,” according to an order filed on Sept. 4. The court denied the motion by the plaintiffs and said it was too early to consider unsealing the documents since the case is still in the discovery phase. “Because this case is in the jurisdictional discovery phase, the court finds that it is premature to grant at this juncture plaintiffs’ various motions to remove the ‘protected information’ designation from certain deposition transcripts and documents produced during jurisdictional discovery,” said the order.

Former Fannie executive Tim Rood, now chairman and founder of the Collingwood Group, said "the current posture by the administration is pretty indefensible.”

Besides Fidelity, other institutional investors have slashed their holdings in the company, fearing that its best days are behind it.

Many left-leaning politicians have complained that Wall Street executives got off the hook for the financial crisis...