Mortgage industry veteran Lewis Ranieri says big banks will easily dodge the risk-retention requirements for mortgage securitizers that have been proposed by federal regulators. Issuers of non-agency mortgage securities that aren’t backed by “qualified residential mortgages” would have to retain a 5 percent interest in the transaction. In a joint comment letter submitted by Ranieri and Kenneth Rosen, chairman of Rosen Consulting Group, a real estate research firm, the pair warned that risk retention as proposed will benefit ...

The FHA has announced changes to help ensure prompt, accurate and consistent responses to industry and public inquiries about FHA matters. The new primary electronic mail address and Internet site of the FHA Resource Center, which includes a Frequently-Asked-Questions site, will be easier to remember and access, according to the FHA. The new email address is answers@hud.gov, which replaced the previous info@fhaoutreach.com. The site address for the FHA FAQ site will change from www.fhaoutreach.gov/FHAFAQ to www.hud.gov/answers. Users should begin using the new addresses exclusively on Aug. 15, according to the FHA. The primary...

The zero risk weight for Ginnie Mae mortgage-backed securities remains despite Standard & Poor’s recent lowering of the long-term rating of the U.S. government and federal agencies from AAA to AA+ and affirmation of the A-1+ short-term rating, according to federal regulators. The rating agency also removed both the short- and long-term ratings from CreditWatch, where they have been since July 14 with negative implications. On August 5, federal banking and credit union regulators announced that, for risk-based capital purposes, the risk weights for Treasury securities and securities guaranteed by...

Short of a market miracle, the chances of other Ginnie Mae mortgage-backed securities servicers catching up with market leaders Wells Fargo and Bank of America are practically nil. Wells Fargo and BofA appear to have a solid lock on 55.0 percent of Ginnie Mae servicing outstanding based on a combined portfolio total of $634.0 billion at the end of June. Overall, the supply of Ginnie Mae servicing grew 3.8 percent during the second quarter. Wells Fargo commanded a 28.2 percent share of Ginnie Mae servicing during the second quarter, up 4.7 percent from the first quarter. Not far behind is second-ranked BofA with a 26.6 percent share, thanks to... [Includes one data chart]

Officials testifying before a Senate Banking, Housing and Urban Affairs Committee hearing this week came out in strong opposition to eliminating a government guarantee in the MBS market of the future, claiming that such measures would have a significant impact on borrowers’ ability to obtain plain vanilla 30-year fixed-rate mortgages. “Many large investors utilize the MBS market to execute trades driven by macroeconomic views and would not utilize a market which combines credit risk with interest rate risk,” said Andrew Davidson, president of Andrew Davidson & Co., an analytics and consulting firm. “With a smaller investor base, liquidity would be...

Production of agency MBS in July slipped to its lowest monthly level since early 2009, according to a new analysis and ranking by Inside MBS & ABS. Fannie Mae, Freddie Mac and Ginnie Mae issued a total of just $70.34 billion of single-family MBS during July, down 3.4 percent from the previous month. It was the lowest one-month production level since January 2009 and left year-to-date issuance down 4.3 percent from the first seven months of 2010. Ginnie production was actually up slightly from June levels, but both Fannie and Freddie posted significant slowdowns. Freddie issuance dropped 15.5 percent from the previous month and accounted for [Includes one data chart]

Major MBS issuers are concerned about the potential harm evolving risk-retention regulations could have on securitization structures, regardless of which structure issuers decide to use. In response to the interagency proposed rule on credit risk retention, Citigroup said the public interest is not served by requiring securitizers to hold positions that are designed to take losses. “For example, all deal parties, the rating agencies and the investors are fully aware that the lowest tranche, sometimes referred to as a ‘first loss’ tranche, may take losses and no representation is made that such tranche is either investment grade or will receive...

Issuers of ABS backed by vehicle loans urged federal regulators to adopt a pool-level approach to determine new risk-retention requirements rather than the all-or-nothing standard proposed earlier this year that featured a narrowly drawn definition of “qualified auto loans. ”Like the more widely discussed provisions on non-agency MBS securitization, the interagency proposed rule carved out an exemption from the 5 percent risk-retention requirement for auto ABS that are backed exclusively by qualified auto loans. But issuer members of the American Securitization Forum said the proposed definition of qualified auto loans features...

Nationally recognized statistical rating organization Kroll Bond Rating Agency demonstrated its optimism in the non-agency market by requesting public comment this week on its rating methodology for evaluating residential MBS. “By providing complete transparency into our approach and processes, we aim to instill trust in the market and to raise the bar on ratings accuracy,” said James Nadler, Kroll’s president, in a statement. “These [publications on our proposed rating process] demonstrate our strong commitment to serving the market through a rigorous evaluation of the collateral as well as key parties in an RMBS, and combine all aspects of...

Wall Street and the Chicago City Council are at loggerheads over a revised ordinance establishing mortgage lender liability for vacant and abandoned buildings caught in the foreclosure process. Tentatively set to take effect Sept. 18, the ordinance addresses the issue of vacant and abandoned foreclosed properties for which ownership is unclear. It holds banks responsible for the upkeep and security of such properties even before they assume title to those properties. In a recent analysis, Moody’s Investors Service warned that such lender liability laws increase mortgage lending transaction costs, which will worsen if...