The so-called RMBS 2.0 features squeaky-clean collateral and high-definition transparency, but industry experts say, more importantly, that after years of mostly talk there is now some momentum in the market. Adam Yarnold, a managing director at Barclays Capital, said there are half a dozen residential mortgage conduits – including his firm – that are buying loans. During a panel session at the secondary market conference sponsored by the Mortgage Bankers Association, he noted that more broker/dealers are in the wings. Barclays is buying high-quality loans with loan-to-value ratios below 70 percent and debt-to-income ratios that come close to the standards proposed by federal regulators for qualified residential mortgages, Yarnold said. The company hosts a web-based portal through which it locks loans and...

Both Fannie Mae and Freddie Mac continued to shrink their mortgage portfolios as required by government regulators during the first quarter of 2011 even as the two government-sponsored enterprises posted dramatically different earnings reports for the first three months of the year. Under the terms of the purchase agreement with the Treasury Department and under Federal Housing Finance Agency regulation, both Fannie and Freddie’s mortgage-related investments portfolio are subject to a cap that decreases by 10 percent each year until each portfolio reaches $250 billion. By Dec. 31, 2011, neither company will be able to hold an unpaid principal balance for mortgage-related investments that exceeds $729 billion. “FHFA has stated that we will not be a substantial buyer or seller of mortgages for... [Includes one data chart]

The Securities and Exchange Commission is reportedly looking into the securitization and put-back practices of Credit Suisse and JPMorgan Chase in connection with alleged recoveries from defective mortgages repurchased by originators from securitization trusts. Credit Suisse confirmed to Inside MBS & ABS a disclosure made by bond insurer MBIA Insurance Corp. that the Zurich-based bank had received a subpoena from the SEC seeking data on repurchases of certain defective loans. The disclosure was made in a lawsuit against three Credit Suisse units – Credit Suisse Securities, DLJ Mortgage Capital, Inc. and Select Portfolio Servicing – which MBIA filed with the New York State Supreme Court on April 29. The suit seeks to compel Credit Suisse to turn over data which MBIA believes would bolster its fraud and breach-of-contract claims against...

&PTop rating agencies continue to have different requirements for issuers to obtain the most favorable ratings on certain transactions, including the all-important criterion of credit enhancement. The latest manifestation of this dynamic involved a recent $1.45 billion servicer advance receivable transaction by American Home Mortgage Servicing Inc., a deal that passed muster with DBRS and Standard & Poor’s. But AHMS withdrew the deal from consideration at Fitch Ratings because of that company’s more conservative rating criteria. DBRS and S gave most components of the transaction a triple-A rating. That included two $325 million senior term notes and a $600 million senior variable funding note. The deal included subordinate term notes of $150 million and $50 million. The primary assets of...

The requirement from last year’s landmark financial services legislation that MBS issuers retain some of the risk associated with residential mortgages will raise the costs of securitizing them to prohibitive levels, discouraging the return of private capital and maintaining the market’s dependence on Fannie Mae and Freddie Mac, industry experts warn. The proposed definition of “qualified residential mortgages” under the terms of the Dodd-Frank Wall Street Reform and Consumer Protection Act was a major focus of concern raised during a webinar last week sponsored by Inside Mortgage Finance. “I think the big-picture news is that certainly the risk-retention regulations do what Dodd-Frank mandates that they do. But in some very important ways they go beyond that...

The battle over the Dodd-Frank-mandated risk-retention rules continues on Capitol Hill, with lawmakers rehashing concerns about either the detrimental or beneficial effects the proposed rule may have on the market. The Dodd-Frank Act required federal regulators to come up with a definition of “qualified residential mortgages” that would be exempt from a 5 percent risk-retention requirement when securitized. During a hearing this week in the House Oversight Subcommittee on TARP, Financial Services and Bailouts of Public and Private Programs, Republican lawmakers argued that transparency is a better solution to restoring investor confidence and reviving the non-agency MBS market. But according to Rep. Elijah Cummings, D-MD, lenders shouldn’t be let off the hook, and the risk-retention rules do furnish necessary...

Government Accountability Office: Foreclosure report: The GAO released a report last week entitled Mortgage Foreclosures: Documentation Problems Reveal Need for Ongoing Regulatory Oversight, which was compiled as a result of a probe House Democrats requested...

Between the servicing alignment initiative recently announced by the Federal Housing Finance Agency, the consent decrees bank regulators struck with some top mortgage servicers last month, and possible national servicing standards from federal policymakers in the near future, there may be very little room left for state attorneys general and regulators to influence servicing practices going forward...

One of the most critical factors contributing to the foreclosure documentation debacle was a fundamental failure on the part of many of the nation’s top mortgage servicers to truly manage their foreclosure networks, and that’s one of the deficiencies federal bank regulators are trying to remedy in their recent consent orders, industry experts have concluded...

The mortgage servicing industry is going to have its hands full and then some as it faces multiple levels of regulatory and statutory requirements over its practices, raising the question of exactly how all of these mandates and protocols are going to interact and how servicers are going to interface with them...