The outstanding volume of single-family agency MBS continued to grow during the first quarter of 2012, accounting for a slightly larger share of the overall mortgage market. Total agency MBS edged up 0.6 percent from the end of 2012 to reach $5.381 trillion – still slightly below the record of $5.430 trillion set at the end of 2009. The agency MBS market declined in early 2010 as Fannie Mae and Freddie Mac began buying distressed home loans out of MBS pools. While the agency MBS market was up in the first quarter, the amount of home mortgage debt outstanding continued to decline, dropping...(Includes one data chart)

If investors in non-agency mortgage-backed securities had easy access to the addresses of mortgages included in non-agency MBS, the sector’s market share would increase, according to a new proposal by the Reason Foundation, which promotes libertarian principles. “Ignorance of the borrower’s address and identity is a major disadvantage for the residential MBS investor or anyone trying to analyze residential MBS deals,” according to Marc Joffe, a research associate at the Reason Foundation and Anthony Randazzo ...

Fannie Mae and Freddie Mac mortgage-backed securities remained the preferred investment choice of the 12 Federal Home Loan Banks during the first quarter of 2012, with a modest increase from the previous quarter, according to a new analysis and ranking by Inside The GSEs based on data from the Federal Housing Finance Agency. Meanwhile, Ginnie Mae securities posted a decline within the FHLBank system during the first three months of the year. GSE MBS accounted for 70.7 percent of combined FHLBank MBS portfolios, up 2.3 percent from the fourth quarter of 2011. The Finance Agency’s data do not separately break out Fannie and Freddie volume or share.

Most of the non-mortgage securitization market seems to be approaching the more normal levels that were seen prior to the financial crisis, according to market participants, analysts and observers gathered for the annual meeting of the American Securitization Forum this week in Washington, DC. “We’ve come a pretty long way, if you think about 2008, pre-2008 and post-crisis,” said Bob Behal, principal with The Vanguard Group. He noted that there have been healthy pricing levels in auto loan and credit card ABS and more active student loan and container sectors, as well as some interesting niche products and...

A proposal from the Financial Industry Regulatory Authority to begin disseminating data for agency MBS traded as specified pools could compromise the confidentiality of market participants and discourage them from future participation, according to the Securities Industry and Financial Markets Association. The FINRA wants to implement shorter reporting timeframes for MBS-SP transactions (initially two hours, then one hour), as well as real-time dissemination of trade information. Volume information would be capped at $10 million. Trades above that amount would be displayed as “10+.” “Our dealer and...

Both Fannie Mae and Freddie Mac held onto their ample shares of mortgage-backed securities with something of a bump during the first quarter of 2012, according to a new Inside The GSEs analysis. The GSEs issued a combined $303.9 billion in MBS during the first quarter, a 13.9 percent increase from the fourth quarter of 2011. Compared to the first quarter of last year, Fannie and Freddie saw a 16.4 percent increase in MBS issuance. Between the two companies, Fannie and Freddie registered a plentiful 77.9 percent share of new MBS during the period that ended March 31, 2012, up from 77.1 percent the two companies held during the fourth quarter of 2011 and much farther apart from the 74.8 percent both GSEs held during the first quarter of 2011.

Look for the Federal Housing Finance Agency to press its multiple legal actions against many of the nation’s biggest issuers of non-agency mortgage-backed securities after a federal judge rejected a bid by UBS Americas to turn back the FHFA’s lawsuit over its sale of non-agency MBS to Fannie Mae and Freddie Mac. Judge Denise Cote, of the U.S. District Court for the Southern District of New York, two weeks ago denied UBS’ motion to dismiss on statute of limitations grounds, while dismissing the FHFA’s negligent misrepresentation claims. The FHFA, as GSE conservator, sued UBS in July 2011 alleging that billions of dollars of MBS purchased by Fannie and Freddie were based on offering documents that contained “materially false statements and omissions.”

The Mortgage Bankers Association is pushing a proposal to change the remittance schedule on Freddie Mac participation certificates and make them fully fungible with Fannie Mae pass-through MBS for good delivery under to-be-announced guidelines. The proposal would address the historical discount to Fannie MBS at which Freddie securities trade, said MBA President Dave Stevens during the group’s National Secondary Market Conference in New York this week. Freddie PCs typically trade 1 or 1.5 points behind Fannie MBS, a difference that Freddie Mac – and ultimately U.S. taxpayers, now that the government-sponsored...

Although Fannie Mae and Freddie Mac have begun buying the latest generation of Home Affordable Refinance Program mortgages with loan-to-value ratios exceeding 125 percent, a number of lenders are holding these loans in the pipeline until the government-sponsored enterprises open the spigot on securitization options for these loans. According to the Federal Housing Finance Agency, Fannie and Freddie purchased 1,548 of the high LTV HARP loans in February. FHFA Senior Associate Director Meg Burns said during an Inside Mortgage Finance webinar this week that a similar volume of 125+ LTV loans were...

A subsidiary of Credit Suisse Group issued a $741.94 million non-agency jumbo mortgage-backed security at the end of March, the first jumbo issuance by a company other than Redwood Trust since 2008. CSMC Trust 2012-CIM1 included some unique characteristics prompting criticism from Fitch Ratings and speculation about whether Credit Suisse will issue more non-agency MBS. Standard & Poor’s and DBRS placed AAA ratings on the senior bond in the privately-placed deal based on 8.00 percent credit enhancement. Fitch – which was paid to provide feedback on the deal but ultimately was not selected to rate the deal – said the credit enhancement for the AAA tranche should have been 9.75 percent ...