Banks and thrifts saw another drop in their MBS holdings in the first quarter of 2013 despite holding their own against the Federal Reserve’s voracious appetite for agency MBS. A new Inside MBS & ABS analysis of bank and thrift call reports reveals that industry investment in residential MBS fell 1.1 percent during the first quarter of 2013 to $1.562 trillion. That was down 4.4 percent from the record $1.634 trillion of MBS held in portfolio by banks and thrifts at the end of the first quarter of last year. Banks reported...[Includes two data charts]
Even as industry chatter increases about an effort to extend the eligibility date of the Home Affordable Refinance Program, analysts speculate that more HARP may be too much of a good thing for the mortgage market. Analysts at Bank of America Merrill Lynch and Keefe, Bruyette & Woods cite evidence of a “creeping goal line” to move back by 12 months the June 1, 2009, cut-off date for HARP eligibility. KBW cites a Saturday morning address by President Obama earlier this month on the subject of refinance. “While he did not specifically mention extending HARP, we think an announcement could be coming over the next few weeks to extend the eligibility back one year,” said KBW. More telling, said BAML, is...
Investors are paying more for vintage non-agency MBS with repurchase disputes and pending settlements than securities not involved in representation and warranty litigation, according to analysts at Amherst Securities Group. The increased pricing comes as the proposed $8.5 billion settlement on non-agency MBS issued by Countrywide Financial nears its conclusion. In the past year, pricing on non-agency MBS involved in rep and warrant litigation outperformed securities not subject to such lawsuits, according to Amherst. “It appears these securities received different treatment, as investors likely included recovery cash flows, and priced the bonds accordingly,” the analysts said. As an example, Amherst pointed...
Ginnie Mae officials are moving ahead to create a blueprint for consolidating its two MBS programs, although some industry experts say the proposal could cost investors $5.5 billion. The agency got considerable backing from a variety of stakeholders for its “straw man” proposal to shift to a single MBS program based on the existing Ginnie II, said John Getchis, senior vice president in Ginnie’s capital markets office. “We got...
Two repurchase lawsuits in the New York state court involving allegedly defective mortgage-backed securities and the state’s six-year statute of limitations have resulted in different outcomes for defendants, one of which could potentially limit MBS putback claims in the Empire State. In a May 13 decision, Justice O. Peter Sherwood of the Commercial Division of the New York Supreme Court dismissed with prejudice a $259 million MBS putback lawsuit against Nomura Credit & Capital. The decision was significant in part because it was the first among dozens of MBS putback cases currently pending in NY state court that was dismissed with prejudice on grounds that the six-year statute of limitations has expired, according to defense attorneys. Two affiliates of hedge fund Fir Tree Partners filed...
Progressives and other “Dump DeMarco” advocates are looking to a “Plan B” to replace the current, long-time acting head of the Federal Housing Finance Agency should the White House’s controversial pick find his nomination significantly prolonged or even stalled in the Senate, say industry observers. President Obama’s long-awaited action last month to nominate Rep. Mel Watt, D-NC, to be the FHFA’s new, permanent director pleased Congressional Democrats who have been longing to oust Edward DeMarco, a career civil servant who has been the Finance Agency’s acting director since September 2009. However, the brewing IRS scandal may further embolden already less-than-pleased Senate Republicans to slow walk Watt’s confirmation hearing or even block the nomination altogether.
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