Warehouse banks that extend credit to nonbank residential lenders ended the fourth quarter with almost $40 billion in commitments on their books, their best quarter of the year, according to exclusive survey figures compiled by Inside Mortgage Finance. The top five warehouse banks – which control about half of the estimated total market – had $19.9 billion of commitments on their books, a 4 percent improvement from the third quarter. Compared to the end of March, commitments were up 37 percent. Wells Fargo, the largest buyer from correspondents, ranked...[Includes one data chart]

This week’s effort by a quartet of former Washington heavyweights to “jump start” the debate over the future of Fannie Mae and Freddie Mac in the form of a new, but familiar, mortgage reform proposal put GSE overhaul back in the headlines. Industry observers say that’s a plus, but it remains to be seen whether it will ultimately affect policy change. The Bipartisan Policy Center, comprised of former Republican and Democrat lawmakers and cabinet officials, issued a plan calling for the phasing out of the GSEs in favor of a new federal entity that explicitly acts as a backstop of last resort after the private sector.

Freddie Mac ended 2012 with its single best quarterly showing since the company was placed into government conservatorship by the Federal Housing Finance Agency at the height of mortgage market implosion 4½ years ago. The GSE late this week posted fourth quarter net income of $4.5 billion. Compared to the third quarter’s earnings of $2.9 billion, profits grew by 55 percent, the company noted in its Securities and Exchange Commission filing.

With the Federal Reserve’s MBS portfolio quietly passing the $1 trillion mark in mid-February for the first time since late 2010, Fed Chairman Ben Bernanke this week continued to toe the party line on the historic level of support the central bank has provided to the MBS and Treasury markets. But there is more skepticism from Republicans on Capitol Hill and some Fed board members, and industry analysts are trying to dope out when the Fed buying spree will wind down. “After quadrupling its balance sheet engaging in unprecedented MBS asset purchases and creating an extended negative real interest rate environment, there is...

Despite softening involvement during the last quarter of 2012, most of the top real estate investment trust MBS investors had healthy increases in their portfolios over the last year, including six that showed triple-digit increases, mostly on the strength of an active first half of the year. According to a new analysis by Inside MBS & ABS, REIT MBS investors as a group increased their MBS holdings by 47.4 percent in 2012, to a total $357.45 billion, despite a collective shrinkage of 4.1 percent during the fourth quarter of the year. All but $7.49 billion were in agency MBS. The biggest year-over-year portfolio gains were seen...[Includes one data chart]

Two months back Macquaire Equities Research issued a report declaring that investing in agency MBS “is like playing a game of chicken.” The analytics firm was speaking mainly about REITs, advising its clients to “take the dividends and run.” Its chief concern was that MBS investing REITs aren’t diversified. “We spoke with agency REIT management teams and found that while the current environment is challenging, for the most part they remain committed to the agency MBS asset class,” wrote Macquarie analyst Jasper Burch. Earlier this month, hedge fund giant Cerberus Capital filed...

The Treasury Department approved $10.0 million in federal funds this month for a limited pilot of a program to allow non-agency borrowers with negative equity to refinance. The program in Oregon’s Multnomah County includes characteristics of a proposal from Sen. Jeff Merkley, D-OR, who said the pilot could create a national model. The Oregon Housing and Community Services Department will use money from the Hardest Hit Fund to help non-agency mortgages with loan balances up to $250,000 and ... [Includes one brief]

House Republicans may be able to pass tough FHA reform and solvency legislation out of committee but they may not have enough votes on the House floor or in the Senate to sustain such a bill, according to industry sources. Even after two successive hearings in the House Financial Services Committee this month, there has been no clear indication from Chairman Jeb Hensarling, R-TX, as to which proposals might go into a legislative package of FHA reforms. Hensarling is said to be operating “with a very strong hand,” and if it were up to him entirely, he would draft legislation that would contain some ...

The Consumer Financial Protection Bureau may run into budget pressures as it transitions from its start-up and rulemaking period to supervision and enforcement, all while policymakers struggle with spending restraints and Congressional Republicans continue to sharpen their CFPB axes in light of the Noel Canning v. National Labor Relations Board ruling, according to an industry consultant. If the bureau does need more funding, it might find its influence unexpectedly limited. The D.C. Circuit Court of Appeals’ Jan. 25 decision in Canning raises...

Securitization of nonperforming loans has increased significantly since 2009, with ever greater issuance expected this year. However, industry participants warn that requirements in the Securities and Exchange Commission’s proposed revision Reg AB will effectively extinguish the market for NPL securitization. Ryan Stark, a director at Deutsche Bank Securities, noted that since the collapse of the non-agency market, issuance involving nonperforming loans has far outpaced issuance of new non-agency MBS. He said about 30 nonperforming loan deals were completed from 2010 through the end of 2012, most without ratings. Issuance of NPL securities started...