RBS, which is effectively owned by the British government, still faces liability in private label security (PLS) matters tied to Greenwich Capital, a U.S. subsidiary that at one time was the largest nonprime issuer in the nation.

The supply of single-family MBS outstanding fell modestly during the first quarter of 2014, reversing three consecutive quarters of modest growth, according to a new Inside MBS & ABS analysis. As of the end of March there was $6.371 trillion of single-family MBS outstanding, down 0.3 percent from the end of 2013. The supply of single-family MBS had been drifting lower since peaking at $7.007 trillion at the end of 2009 as refinance activity – which adds little to outstanding supply – dominated the agency market and non-agency MBS issuance gained little traction. For the last nine months of 2013, the MBS market finally began...[Includes two data charts]

This week, the Federal Reserve, as expected, maintained the current pace of its reduction of support of the housing and mortgage markets, reducing its net purchases of agency MBS to $15 billion per month (down from $20 billion), beginning in July. The Fed Open Market Committee also maintained its forward guidance regarding the federal funds rate target of between zero and 0.25 percent and reaffirmed its view that a highly accommodative stance of monetary policy remains appropriate. “Even after today’s action takes effect, we will continue...

A senior Treasury Department official pushed back against the idea of rehabilitating the two government-sponsored enterprises, noting in a speech late last week that the firms cannot be re-capitalized and reiterating the Obama administration’s commitment to wind down Fannie Mae and Freddie Mac. Mary Miller, the Treasury’s undersecretary for domestic finance, said that even if the two GSEs were allowed to stay in business and build up capital, it could take “at least” 20 years to recapitalize Fannie and Freddie. “During these 20 years, the taxpayer would remain...

Major post-crisis changes in the mortgage market should boost new issuance of residential MBS and have a long-lasting, positive impact on credit, according to Moody’s Investors Service. The rating service cites three key developments that will continue to support a strong credit environment for new MBS issuance, starting with the final rule on ability to repay and qualified mortgages. Moody’s believes the rule will help MBS performance by improving the reliability and accuracy of data lenders use to underwrite loans. Under the ATR rules, lenders are required...

Sources tell IMFnews that the Federal Housing Finance Agency is looking into the matter and is promoting the idea of capital minimums for nonbanks that do business with Fannie Mae and Freddie Mac.

While the Consumer Financial Protection Bureau has encouraged originations of loans that don’t meet standards for qualified mortgages, consumer advocates this week voiced skepticism about the products. At a meeting by the CFPB’s consumer advisory board, Gary Acosta, CEO of the National Association of Hispanic Real Estate Professionals, noted that most non-QM lenders appear to be focusing on jumbo borrowers. “Certainly that’s a gap,” he said of ...

SunTrust Mortgage’s recent settlement of a dispute with the federal government and 49 state attorneys general over defective FHA loans and Wells Fargo’s losing bid to quash a similar lawsuit are raising concerns about doing business with the FHA. Industry attorneys say the lesson for lenders in these recent industry debacles is that it is “extraordinarily dangerous” to do FHA loans these days given the outcome of the two cases. It is also getting harder to trust mortgage settlement agreements with the government, they added. “The scariest part in all these is the combination of government forces involved in these claims – state AGs, Department of Justice, Department of Housing and Urban Development and the Consumer Financial Protection Bureau,” said an attorney, who worked on both cases. “When they want to get you, they can get you.” Others believe these developments could have a ...

Two federal agencies have announced separate actions to protect reverse mortgage borrowers and rural home purchasers from deceptive advertising and marketing. This week, the FHA warned lenders participating in the Home Equity Conversion Mortgage program not to use misleading or deceptive language in marketing FHA-insured reverse mortgages to consumers. The FHA said the guidance is intended to protect HECM borrowers from advertising and presentations that appear to limit their options rather than informing them of the full range of available HECM products. Underscoring senior borrowers’ “freedom of choice,” FHA Commissioner Carol Galante said the agency wants lenders to know their marketing and advertising practices are under constant surveillance to prevent customers from being steered to unsuitable reverse mortgage products. Galante noted the ...

Barring any unpleasant news, Julian Castro, President Obama’s nominee for secretary of the Department of Housing and Urban Development, apparently has passed his job interview with the Senate Banking, Housing and Urban Affairs Committee. This week, Castro, a three-term mayor of San Antonio, TX, laid out his priorities as HUD secretary before committee members if he is confirmed for the job. Castro underscored the importance of “partnership and pragmatism” as the key drivers in running a city. As HUD secretary, Castro said he would enhance “cross-agency collaboration” and emphasize the value of “measuring results” by setting precise goals, consulting with the public on major issues, developing a public report card and annual updates – tools he employed in his municipal housing education and affordable housing initiatives in San Antonio. As mayor, Castro worked to ...