JPMorgan Chase is close to selling a non-agency jumbo mortgage-backed security, according to traders and jumbo executives familiar with the company’s activities. Chase is treating the MBS as a test deal – which has been delayed – though it could close by the end of this month. A spokesman for Chase declined to comment on the matter but a source at the company confirmed that a deal is in the works. Chase might issue the deal as a private placement or the company might keep the security for its own portfolio and ...

Firms are looking to issue new non-agency mortgage-backed securities with looser representation and warranty standards than most post-crisis issuance, according to Fitch Ratings. The rating service issued a report this week critical of looser reps and warrants and pointed to Redwood Trust as an issuer with high standards for reps and warrants. “We believe that transactions with these more aggressive rep and warranty provisions have the potential to weaken a transaction and effectively reduce ...

Federal regulators said they are nearly finished writing the final rule on risk retention in non-agency mortgage securitizations, including a revised definition for qualified residential mortgages. Issuance of the rule was delayed until the Consumer Financial Protection Bureau finished its ability-to-repay rule which set standards for qualified mortgages. “QM coming out really now does allow us to finish it,” Federal Reserve Governor Daniel Tarullo said of the risk-retention rule ...

Federal regulators are under pressure from Congress and others to bring more mortgage-related lawsuits, particularly involving “Wall Street banks.” Obama administration officials and former employees of the regulators suggest that more lawsuits are likely, including a focus on non-agency mortgage-backed securities. The latest calls for lawsuits came last week from Sen. Elizabeth Warren, D-MA. At a hearing by the Senate Banking, Housing and Urban Affairs Committee, she questioned how much ...

The state of Oregon this week inked a deal with the Treasury Department to use Troubled Asset Relief Program funds to help refinance underwater non-agency mortgages in what’s believed to be the first such initiative under the Obama administration’s Hardest Hit Fund program. The program, which will be tested in Multnomah County, OR, will roughly parallel the Home Affordable Refinance Program for underwater Fannie Mae and Freddie Mac mortgages. It’s also similar to a proposal developed by Sen. Jeff Merkley, D-OR, that would create a new federal agency to refinance underwater non-agency mortgages using funds generated through a new bond program. Many observers see...

Securitization of nonperforming loans has increased significantly since 2009, with ever greater issuance expected this year. However, industry participants warn that requirements in the Securities and Exchange Commission’s proposed revision Reg AB will effectively extinguish the market for NPL securitization. Ryan Stark, a director at Deutsche Bank Securities, noted that since the collapse of the non-agency market, issuance involving nonperforming loans has far outpaced issuance of new non-agency MBS. He said about 30 nonperforming loan deals were completed from 2010 through the end of 2012, most without ratings. Issuance of NPL securities started...

JPMorgan Chase is working on what’s been described by some market participants as a “test” jumbo MBS deal, but isn’t quite ready to bring the bond to auction. According to traders and jumbo executives who are familiar with JPM’s activities, the security was set to come out earlier this week, but has been delayed. The bank, on the other hand, isn’t giving much guidance on the situation. It’s also possible that JPM might keep...

Moody’s Investor Services ranked as the top rating service in non-mortgage ABS ratings during 2012, according to a new Inside MBS & ABS ranking. DBRS was the leader in rating non-agency MBS transactions last year. In a market that grew by 15.9 percent in 2012, Moody’s increased the volume of ABS deals it rated by just 6.9 percent over its activity back in 2011. Still, the company edged past Fitch Ratings with a 64.9 percent market share even though it mostly sat out the booming credit card sector. Moody’s had its highest penetration rates in business loan ABS and was well represented in student loan and vehicle finance securitizations. Fitch had...[Includes two data charts]

Stonegate Mortgage Corp. this month launched a new jumbo conduit, hiring Eric Schlotz, a 15-year veteran from GMAC-RFC in Minneapolis, to manage the operation. As for when the conduit might actually securitize loans, that’s a different matter. Schlotz told Inside MBS & ABS that securitization is not on the immediate drawing board, but will be an option for the future. “We anticipate whole loan sales and private deals,” Schlotz said. Asked whether he feels...

The ranks of non-agency mortgage-backed security issuers are set to expand beyond Redwood Trust and Credit Suisse, but industry analysts note that issuance remains constrained due to bank portfolio execution and the government-sponsored enterprises. At the American Securitization Forum’s ASF 2013 conference last week in Las Vegas, Laurie Goodman, a senior managing director at Amherst Securities Group, predicted $25 billion to $30 billion in new non-agency MBS will be issued this year, the most ...