The Treasury Department issued a wide-ranging request for comments last week as part of an effort to increase issuance of non-agency mortgage-backed securities. Treasury officials said they are working toward developing standards and practices for the non-agency MBS market. “The private-label securities market has been dormant since the financial crisis,” said Treasury Secretary Jacob Lew. “The fact is, we need to attract more private capital to the housing market ...

MBS prices have been hovering around their highs for the year and could stay that way through the fall with minor corrections occurring along the way. “Prices have risen even on the good economic news,” said Joe Farr, director of sales and marketing for MBSQuoteline. “But they fell by about 1 percent over the past week.” Recently, when the Consumer Price Index rose, there was...

The Securities and Exchange Commission has largely wrapped up its enforcement on structured finance issues related to the financial crisis, according to current and former officials at the federal regulator. The SEC’s Complex Financial Instruments Unit is now focusing on more recent issues in the structured finance sector. “The unit has now shifted its attention to the next frontier, and I expect it to zero in on the structuring, rating, valuation, sale, and use of other types of complex financial products, such as commercial MBS, structured notes and credit default swaps,” Andrew Ceresney, the director of the SEC’s division of enforcement, said in May. Stephen Crimmins, a partner at the law firm of K&L Gates who previously worked at the SEC for 14 years, said...

Even though the risk-sharing targets set for Fannie Mae and Freddie Mac have been all but met this year, expect the two government-sponsored enterprises to come to market with risk-sharing transactions at least once a quarter, with the likely result of both firms exceeding the 2014 target “by at least” $20 billion, predicted an analysis by Wells Fargo Securities. The FHFA’s 2014 Conservatorship Scorecard directs the GSEs to reduce taxpayers’ risks by increasing the role of private capital in the market via several strategies, including tripling the credit risk transfer goals to $90 billion in 2014 from $30 billion in 2013. Year-to-date, Fannie Mae’s Connecticut Avenue Securities program has already achieved...

Commercial banks and thrifts held $172.6 billion of non-mortgage ABS as of the end of the first quarter, a 10.2 percent drop from December 2013, according to a new Inside MBS & ABS analysis of call report data. The industry’s top ABS investor, TD Bank, increased...[Includes one data chart]

This week, the Federal Reserve, as expected, maintained the current pace of its reduction of support of the housing and mortgage markets, reducing its net purchases of agency MBS to $15 billion per month (down from $20 billion), beginning in July. The Fed Open Market Committee also maintained its forward guidance regarding the federal funds rate target of between zero and 0.25 percent and reaffirmed its view that a highly accommodative stance of monetary policy remains appropriate. “Even after today’s action takes effect, we will continue...

A group of institutional investors – including BlackRock and Pacific Investment Management Co. – filed suit this week against six banks for their alleged failure as mortgage-bond trustees for over $2 trillion worth of mortgage securities. The suits against the banks – U.S. Bancorp, Citigroup, Deutsche Bank, The Bank of New York Mellon, HSBC Holdings, and Wells Fargo – were filed in New York State Supreme Court, New York County. The plaintiffs seek unspecified damages for losses exceeding $250 billion on nearly 2,220 non-agency MBS trusts issued between 2004 and 2008. The suits allege...

Six months ago, AmeriHome Mortgage of California was a little known subsidiary of Impac Mortgage Holdings. But not anymore. Now controlled by Athene Holding Ltd., an insurance company owned by Wall Street veteran Leon Black, the nonbank lender is gearing up to make a splash in the jumbo and non-agency market as a correspondent buyer of mortgages. “They’re...

Major post-crisis changes in the mortgage market should boost new issuance of residential MBS and have a long-lasting, positive impact on credit, according to Moody’s Investors Service. The rating service cites three key developments that will continue to support a strong credit environment for new MBS issuance, starting with the final rule on ability to repay and qualified mortgages. Moody’s believes the rule will help MBS performance by improving the reliability and accuracy of data lenders use to underwrite loans. Under the ATR rules, lenders are required...

Waiting for a large merger or acquisition to happen in the mortgage market is a bit like waiting for Godot: there’s plenty of talk about his arrival, but he may never show. “Right now there’s a large discrepancy between what the buyer wants to pay and what the seller wants to sell at,” said Chuck Klein, managing partner in Mortgage Banking Solutions, Austin, TX. “Any company that’s making money will not sell at just book value.” One large company that likely will not be sold this year is...