The recent rancorous debate over raising the debt ceiling brings little hope of relief from the overwhelming amount of regulation coming down the pike. Analysts say the uncertainty has made it more difficult to quantify risks for MBS and other securitized products. Analysts at Bank of America/Merrill Lynch said the outcome of the debate was far worse than expected, forcing them to temper their optimism for securitized products. Instead, they are calling for a more neutral exposure. “The pragmatism we thought we would see never really emerged,” said Chris Flanagan, an analyst with the firm. “Instead ...

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...

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...

Two Harbors Investment Corp. said this week it is “impressed with the investment opportunities” in the non-agency MBS sector, particularly over the next year and beyond and is pushing forward with its plans to begin a securitization program. Thomas Siering, president and CEO of the New York-based real estate investment trust, said during a conference call to discuss the firm’s second quarter earnings that despite the “challenging” non-agency environment in June, there is tremendous opportunity to profit from non-agency MBS issuance throughout the rest of this year into 2012. “The recent pullback in the non-agency market has created...

The Mortgage Bankers Association urged the Federal Housing Finance Agency to include other fee structures and not just seek public comment on one servicing fee structure in a forthcoming proposal. The FHFA has been working behind closed doors with Fannie Mae, Freddie Mac and Ginnie Mae to devise a new servicing compensation structure for mortgages securitized by the agencies, which account for over 90 percent of new lending. Industry groups and others have been consulted during the process, which is expected to result in an exposure document subject to public comment. The MBA cautioned the FHFA against showing preference for any...

Fannie Mae and Freddie Mac will not be branching out into the role of a “master servicer” in a new, yet-to-be-launched $2 billion bond program as top Republican members of the House Financial Services Committee feared, according to Treasury Secretary Timothy Geithner.In a letter dated July 21 and in response to a letter sent by Committee Chairman Spencer Bachus, R-AL, Vice Chairman Jeb Hensarling, R-TX, and four of the committee’s subcommittee chairman, Geithner firmly ruled out any participation by the two GSEs in Treasury’s loan-guarantee program.

The Federal Housing Finance Agency said last week to expect further litigation in its ongoing efforts to recover losses suffered by Fannie Mae and Freddie Mac in connection to the two GSEs’ investments in non-agency securities.Last week, the Finance Agency filed suit against UBS Americas Inc. and various related entities alleging misstatements and omissions of non-agency MBS purchased by Fannie and Freddie.