The agency residential MBS market expanded for the third consecutive quarter during the three months ending in September, according to a new Inside MBS & ABS analysis. A total of $5.39 trillion of single-family MBS issued by Fannie Mae, Freddie Mac and Ginnie Mae were outstanding as of the end of the third quarter of 2012. That was up by a scant 0.2 percent from the previous period, although it was still 0.4 percent below the level at the same time in 2011. Both Ginnie (2.1 percent) and Fannie (0.6 percent) posted...[Includes two data charts]

Investors in non-agency MBS have numerous concerns about a loan modification program proposed by the Obama administration, according to Tom Deutsch, executive director of the American Securitization Forum. The so-called Market Rate Modification program would target borrowers with negative equity on a mortgage in a non-agency MBS. “For the many significantly underwater borrowers that would not default on their mortgage loans, the MRM proposal would ultimately represent a transfer of wealth from the pension fund and 401(k) investors who lent the mortgage principal through residential MBS to borrowers that have not demonstrated any material life changes that would impair their ability to make their monthly mortgage payments,” Deutsch said in a letter this week to the Treasury Department. He noted...

A recession resulting from the federal government taking the U.S. economy over the fiscal cliff would leave Fannie Mae and Freddie Mac vulnerable to higher credit losses and make the two government-sponsored enterprises unprofitable again, according to Moody’s Investors Service. Moody’s this week warned that Washington’s failure to reach a tax and spending agreement would also force the GSEs to ride out the shockwaves of potential financial market disruptions on their derivatives trades. “In our current central economic scenario, both Fannie Mae and Freddie Mac are...

Investors in non-agency mortgage-backed securities are pushing back against a loan modification program proposed by the Obama administration that would target underwater loans backing their investments. “Quite simply, investors have already been significantly harmed by the poor performance of many of the mortgage loans in non-agency MBS, and the Market Rate Modification proposal would only increase the severity of losses suffered by institutional investors,” Tom Deutsch ...

The Consumer Financial Protection Bureau is considering expanding the size and scope of the exemption on its pending final rule regarding servicing practices, according to agency officials. The CFPB also downplayed concerns that the servicing rule will expand loss-mitigation options beyond those approved by mortgage investors. During a webinar this week hosted by Inside Mortgage Finance, Mitchell Hochberg, regulatory counsel at the CFPB, said the agency is “very heavily” thinking about ...

Damage from Hurricane Sandy will have a negligible impact on mortgages in outstanding non-agency mortgage-backed securities, according to a new analysis by Opera Solutions. The servicing analytics provider said 45 non-agency MBS deals with $19.6 billion in outstanding balance have mortgages with exposure to significant damage from the storm and the likely affected balance is $6.0 billion. “Based on a detailed analysis of each portion of affected ZIP codes, the ultimate exposure is much lower ... [Includes four briefs]

The CFPB has proposed allowing banks, credit unions and other financial services companies to test new consumer disclosures on a case-by-case basis. The bureau would have to approve of the disclosure programs ahead of time. Under the proposal, the CFPB would exempt certain qualifying individual companies for a limited time from existing federal disclosure laws so they can research and test “informative, cost-effective disclosures.” The participating companies would then share their results with the agency so it...

The CFPB has released a report on consumer experience with the three largest nationwide credit reporting companies – Equifax, Experian and TransUnion – finding, among other things, that credit card history dominates the information in consumer reports and that debt collection items generate the highest rate of disputes. Each of these firms have in excess of 200 million files on consumers. In a typical month, they receive updates from approximately 10,000 information “furnishers.” The furnishers do this on more than...

The CFPB has a pretty full plate digesting hundreds of comments related to its mortgage servicing proposed rule, making it difficult to predict how the final product might end up as it presses to balance the industry’s legitimate concerns with the regulatory mandates of the Dodd-Frank Wall Street Reform and Consumer Protection Act. During a recent webinar sponsored by Inside Mortgage Finance, an affiliated publication, Mitchell Hochberg, counsel in the division of research, markets and regulations at the CFPB...

There was a pronounced difference of opinion between a leading industry attorney and a top official from the CFPB at a recent event over whether the bureau’s proposed mortgage servicing standards create a private right of action that could bring any foreclosure proceeding to a grinding halt. During a webinar sponsored by Inside Mortgage Finance, Larry Platt, financial services practice area leader with the law firm of K&L Gates, said, “The consequence of these regulations is to create a federal cause of action that...