"The facts regarding the department's work on mortgage fraud tell a much different story than this report," said a spokeswoman for the Department of Justice.

An affiliate of Nationstar Mortgage is preparing to issue an ABS backed by servicer advances and deferred servicing fee receivables, continuing a trend of nonbank servicers fueling their growth via securitization. Industry analysts suggest that the deals offer good returns to investors, even with regulators increasing their scrutiny of nonbanks. The $1.96 billion servicer advance ABS from New Residential Investment is expected to close on March 18, according to a presale report by Standard & Poor’s. The deal is set to receive a AAA rating from the rating service. “Based on the nature of the assets which historically display high recovery typically at the top of the waterfall, we would view...

Publicly traded real estate investment trusts reported a 13.5 percent decline in their holdings of residential MBS during the fourth quarter, according to a new Inside MBS & ABS analysis. The industry reported $264.8 billion of residential MBS at the end of 2013, a 26.4 percent drop from the fourth quarter of 2012. The five largest REIT MBS investors all reported double-digit drops during the final three months of 2013, while the mid-range companies generally had smaller declines and three smaller firms actually grew their portfolios. At the top of the table, Annaly Capital Management reported...[Includes one data chart]

The U.S. Supreme Court has added two more lawsuits to its growing list of securities cases by agreeing to take up an IndyMac MBS suit. In Public Employees’ Retirement System of Mississippi v. IndyMac MBS Inc. et al, SCOTUS has agreed to consider whether the filing of a class-action lawsuit tolls the three-year statute of repose under the Securities Act of 1933 or whether the statute is an absolute bar that cannot be suspended. Like a statute of limitations, a statute of repose cuts off...

Members of the Treasury Markets Practice Group are supportive of the Financial Industry Regulatory Authority’s recent proposal to establish margin requirements for transactions in the “to be announced” market, seeing them as compatible with what the TMPG itself is trying to accomplish with the same products. According to the minutes of a recent meeting, TMPG members noted that FINRA’s proposed rule amendments would be binding across FINRA’s membership, which would further the objectives of the TMPG’s agency MBS margining recommendation and encourage wider adoption of margining practices over time. “While recognizing that the TMPG’s margining best practices go...

For those of you tracking the lawsuits filed by GSE preferred investors against the federal government, one attorney told us this week that: “These cases won’t be resolved for years." Meanwhile, it appears that the CSP still has no CEO.

Investors would be more willing to buy AAA tranches of jumbo mortgage-backed securities if issuers would standardize their offerings, according to Michael Stegman, counselor to the Treasury Department on housing finance policy. While the Treasury and industry participants both currently have initiatives aimed at standardization, issuers haven’t been too willing to seek uniformity. In a speech last week, Stegman said that based on recent meetings with jumbo MBS participants ...

Nationstar Mortgage joined Ocwen Financial last week under the glare of the New York Department of Financial Services’ spotlight. Ben Lawsky, superintendent of the NYDFS, said the state regulator has received hundreds of complaints about Nationstar’s practices, including problems with loan modifications, improper fees and lost paperwork. “Our department has significant concerns that the explosive growth at Nationstar and other nonbank servicers may create capacity issues ...

More lenders have expressed concern about a provision in the proposed FY 2015 federal budget seeking congressional authority to collect $30 million to help improve and strengthen FHA quality assurance reviews. Under the president’s budget proposal, FHA would collect an “administrative fee” from FHA lenders to implement the quality assurance (QA) changes needed to provide a clearer, more transparent picture of enforcement going forward. The improvements are meant to provide lenders not only information about early payment default or other kinds of default characteristics through loan sampling but also an accurate snapshot of their “manufacturing risk,” which is the risk that a loan is not underwritten properly. “The purpose is for lenders to have the information six to nine months after they have originated the loan as opposed to ...

Penalties in legislation that would restrict the use of eminent domain to resolve foreclosure problems could cripple state and local governments financially and provide no relief to property owners, warned the bill’s critics. H.R. 1944, the Private Rights Protection Act, would prohibit city and county governments that get federal funding for economic development from using their eminent domain powers to seize underwater mortgage notes from investors and unilaterally restructure the loans before selling them to other investors. Violators would be ineligible for federal economic development funds for two fiscal years following a court’s finding of guilt. The bill also provides the attorney general with broader enforcement authority. The necessity for legislation arose in the wake of efforts last year by certain municipalities in California to ...