Ratings on servicer advance asset-backed securities issued by Home Loan Servicing Solutions and Nationstar Mortgage could be downgraded due to a change in rating criteria by Standard & Poor’s that was implemented after the ABS were issued.

“The recent decline in large-lender share of the primary market is temporary, and principally a result of cyclical factors that caused larger lenders to pull back from the market,” said Fannie Mae's Gerry Flood.

Some 44 percent of mods on portfolio loans by eight large banks and thrifts include principal reduction in the third quarter of 2013.

Issuance of jumbo MBS was strong in 2013 until interest rates started to rise in May due to concerns that the Federal Reserve was set to taper its stimulus efforts.

State attorneys general extended the national servicing settlement to the nonbank sector with an extra emphasis on servicing transfers.

Some 29.3 percent of home purchases completed in November relied solely on cash. That was the third monthly increase in the share of cash transactions.

Fannie Mae will take a closer look at transfers to subservicers. The Federal Housing Finance Agency settled a non-agency MBS lawsuit with Deutsche Bank.

Flagstar will sell the servicing rights on about half of its portfolio to the real estate investment trust and subservice the loans.

Bexil American Mortgage partnered with a private real estate investment trust to launch a correspondent program. Meanwhile, New Jersey filed a lawsuit against Credit Suisse regarding non-agency mortgage-backed securities issued before the financial crisis.

FHA officials first asked for the servicing authority back in June, but the request has gone nowhere. Fannie Mae and Freddie Mac already have transfer authority.