The Treasury Department strongly defended the Home Affordable Modification Program this week after criticism and calls for changes from the Special Inspector General for the Troubled Asset Relief Program. The Obama administration is also considering extending HAMP, which is currently set to expire at the end of this year. “Data show that the majority of homeowners who receive assistance from HAMP have a high likelihood of long-term success to avoid foreclosure, and that HAMP modifications continue to outperform private industry modifications,” said Andrea Risotto, Treasury’s spokesperson for HAMP. She was responding...

“The private-label market is showing new signs of life,” according to Standard & Poor’s, which predicted that banks are likely to increase their securitization of jumbo mortgages. In a report released late last week, S&P projected $14 billion in non-agency jumbo MBS in 2013. Redwood alone set a goal of issuing $7 billion in non-agency MBS this year and is on pace to exceed that volume, helped by a pending $425 million deal, its sixth of the year. PennyMac Mortgage Investment Trust is also aiming to issue a non-agency jumbo MBS in the Redwood mold in the third quarter of 2013. JPMorgan Chase and EverBank Financial issued...[Includes one data chart]

Many people in the mortgage lending and securitization sectors thought the controversial eminent domain plan pushed by Mortgage Resolution Partners was graveyard dead after suffering a few high-profile defeats in various locales throughout the country. They were wrong. Now, a number of interested industry parties are back on the defensive, trying to convince city officials in Richmond, CA, to abandon a new advisory arrangement with MRP and to discourage local government representatives in North Las Vegas, NV, to not reach a similar agreement with the firm. In both instances, the plan being advanced by MRP would involve...

The National Association of Insurance Commissioners recently proposed changes to modeling values of insurance company holdings of non-agency MBS and commercial MBS. The proposal could increase loss forecasts and prompt some sales of the securities, according to analysts. The NAIC proposed using the Treasury strip curve as the discount rate in determining the net-present value of expected loss for modeled securities, as opposed to using each security’s coupon rate to determine expected losses. The standard-setting group governed by state insurance regulators noted that the Treasury strip curve is a risk-free curve. “Using a consistent risk-free rate for all modeled securities in calculating the expected loss reflects...

Securitization of income-property mortgages jumped 23.0 percent from already strong levels during the first three months of 2013, according to a new Inside MBS & ABS market analysis. A total of $47.61 billion of commercial MBS were issued during the first quarter, including a variety of non-agency deals as well as multifamily MBS issued by Fannie Mae, Freddie Mac and Ginnie Mae. That was the strongest level since structured finance markets tanked in 2008. The previous post-crash high was...[Includes one data chart]

Moody’s Investors Service has come up with a monitoring approach to evaluating “tail risk” in non-agency MBS that pay scheduled principal and prepayments to the securities on a pro-rata basis and assessing the adequacy of the credit enhancement available to the rated securities. Tail risk is what might be described as the “end of life” risk of a disproportionately large loss (based on current balance of the pool) on the underlying pool at the end of a transaction’s term when few loans remain in the pool and credit enhancements, although high in percentage terms, may be very low in dollar terms. The proposed change in approach at Moody’s will mostly affect...

Nationwide, mortgage originations fell by 4.8 percent during the first quarter of 2013, but a lot of that decline took place at the industry’s biggest lender, Wells Fargo, according to a new market analysis and ranking by Inside Mortgage Finance. Mortgage originations totaled an estimated $500.0 billion during the first three months of the year, down from $525.0 billion during the fourth quarter of 2012. It still ranked as the fourth strongest quarter in new loan production since the mortgage market tanked back in 2008, and originations in early 2013 were up 19.0 percent from the same period last year. But most of the indicators are...[Includes two data charts]

“We need the light hand of government to set standards and systems for the market to move forward and private capital to return,” said Chris Katopis, executive director of the Association of Mortgage Investors, in testifying at a hearing this week in the House Financial Services Committee. While members of the committee appear to be nowhere near agreement on how to resolve the ongoing conservatorships of Fannie Mae and Freddie Mac – or how they might be replaced – lawmakers, non-agency MBS issuers and investors all agreed on the need for new standards to increase non-agency MBS activity. The AMI called...

“Private capital out there, here we come,” Edward DeMarco, acting director of the Federal Housing Finance Agency, said this week. He was talking about pending risk-sharing pilot transactions between the government-sponsored enterprises and the non-agency market. The FHFA set a goal for Fannie Mae and Freddie Mac to each issue at least $30.0 billion in risk-sharing transactions this year. Those efforts were delayed in 2012 due to regulatory concerns, but DeMarco said the GSEs will soon issue such deals ...

The Senate Banking, Housing and Urban Affairs Committee hasn’t marked up a bill in more than a year, but Democrats and Republicans on the panel pushed this week to begin the process of reforming the government-sponsored enterprises. “I think the time is right to address this issue and move it forward,” Sen. Jon Tester, D-MT, said this week at a hearing by the committee. “I think there are folks on both sides of the aisle that want to quit playing with this like a political football and ...