Trustees of residential MBS should consider themselves “on notice” that they need to be much more attentive and aggressive in meeting their obligations under the pooling and servicing agreements governing MBS trusts, according to a trade group representing investors. Last week, the Association of Mortgage Investors sent letters to several major MBS trustees – including JPMorgan Chase, Deutsche Bank, US Bank, Wells Fargo and Bank of New York – remind-ing them of their legal obligations to RMBS certificate holders. The AMI letter also informed trustees that ...

Credit rating agencies and government regulators are making wholesale changes to the way they come up with and use credit ratings in order to prevent a repeat of the financial meltdown, witnesses at a hearing of the House Committee on Financial Services said. “While much has changed with regard to credit ratings and credit rating agencies over the course of the past several years, our fundamental mission remains the same: to provide the market with independent benchmarks about the creditworthiness of ...

Regardless of whether the White House and Congress come to a debt ceiling deal before the fast approaching Aug. 2 deadline, agency MBS are in for a rough ride, experts say. Last week, Moody’s Investors Service and Standard & Poor’s lit a fire under the debt talks and sparked widespread consternation throughout the MBS arena when they announced that each may cut the U.S. credit rating two double-A within three months if there isn’t a “credible” agreement to address the U.S. debt burden. Consequently, Moody’s placed on review for possible downgrade ...

Fannie Mae this week released a revised prospectus for its single-family MBS program that updates language on non-standard collection options such as biweekly payment plans, certain hybrid ARM pools and loan eligibility. The government-sponsored enterprise also expanded its discussion of representations and warranties provisions affecting its single-family MBS. In addition to requiring sellers to repurchase mortgages that breach the reps and warranties, Fannie said it is important for investors to consider that there are other mandatory and optional cases where loans may be ...

A coalition of six Federal Home Loan Banks has gone to court seeking formal standing as investors in the proposed $8.5 billion Bank of America settlement over mortgage-backed securities even as court papers reveal investors could be owed a sum three times greater than the current BofA proposal.The Federal Home Loan Banks of Boston, Chicago, Indianapolis, Pittsburgh, San Francisco and Seattle together own certificates in 73 of the trusts that are part of the proposed settlement for which they paid more than $8.8 billion.

California continues to be the top source of new single-family mortgages for Fannie Mae and Freddie Mac even as Fannie remains the dominant GSE in terms of production through the first half of the year, according to an upcoming special report, GSE Market Profile: First Half 2011 by Inside Mortgage Finance Publications.

Most of the top mortgage originators of agency-eligible home loans posted significant declines in MBS issuance during the second quarter, but a handful of firms bucked the current, according to a new ranking and analysis based on the Inside Mortgage Finance MBS Database. Overall agency MBS production declined 33.8 percent from the first quarter to the second, hitting its lowest three-month volume since the end of 2008. Through the midway point in 2011, single-family mortgage securitization by Fannie Mae, Freddie Mac and Ginnie Mae was off ... [includes two data charts]

A new Inside Mortgage Finance analysis reveals that the proposed qualified residential mortgage standard drafted earlier this year by federal regulators would affect individual mortgage originators in dramatically different ways. As the regulators acknowledged in their proposed rule, a significant share of Fannie Mae and Freddie Mac loans originated through 2009 would not meet new standards for loan-to-value ratios, borrower credit history, debt-to-income ratio and other factors. Most loans being sold to the government-sponsored enterprises under today’s pristine underwriting and pricing policies also would fail to meet the... [Includes one data chart]

High-risk mortgages securitized by Fannie Mae and Freddie Mac continued to drag down earnings for the government-sponsored enterprises in the first quarter of 2011, forcing the two GSEs to go deeper into debt to the federal government. Fannie and Freddie lost a combined $13.0 billion on their mortgage-backed security guarantee programs during the first quarter, a significant deterioration from the $6.6 billion the GSEs lost during the previous quarter, according to the Federal Housing Finance Agency’s latest conservatorship report. Since the beginning of 2008 through the first quarter of 2011, Fannie and Freddie have burned through...

Residential mortgage securitization activity fell sharply during the second quarter of 2011, reaching its lowest level since the low point in the financial market meltdown of 2008. A new analysis by Inside MBS & ABS reveals that only $245.9 billion of single-family MBS were issued during the second quarter of this year, a sharp 31.0 percent downturn from the first three months of 2011. Second quarter MBS issuance wasn’t much stronger than the $222.3 billion of MBS issued back in the fourth quarter of 2008, and to find a lower quarterly issuance volume you have to go ... [includes one data chart]