Investors have expressed a keen interest in programs that would facilitate bulk sales of real estate-owned properties. However, few are optimistic that such a program will come to fruition. Based on cost figures provided by Carrington Holding Company, Vincent Fiorillo, a portfolio manager at DoubleLine Capital, suggested investors could easily earn returns of 9.0 percent by renting REO properties. “This is a very attractive alternative investment opportunity,” Fiorillo said at the American Securitization Forum’s ASF 2012 conference last week in Las Vegas ...

A new proposal by the Obama administration to refinance non-agency mortgages with negative equity could have a major impact on the non-agency market, though approval by Congress appears unlikely. “Borrowers with standard non-GSE loans will have access to refinancing through a new program run through the FHA,” the Obama administration said in a fact sheet released this week. “For responsible borrowers, there will be no more barriers and no more excuses.” The program would require that borrowers ...

The Department of Justice announced last week that it will increase the number of attorneys, analysts, agents and investigators looking into unlawful activities regarding mortgage-backed securities. The emphasis on MBS was directed by President Obama and is part of a new working group involving the DOJ, federal regulators and a number of state attorneys general. The DOJ, Department of Housing and Urban Development, Securities and Exchange Commission and state attorneys general led by New York AG Eric Schneiderman formed the Residential Mortgage-Backed Securities Working Group under the existing Financial Fraud Enforcement Task Force ...

A settlement involving major servicers and state attorneys general could be close, as state AGs have until Feb. 6 to agree to a potential $25 billion settlement. Negotiations on the settlement have dragged on for 15 months and were previously slated to end Feb. 3. Ally Financial, Bank of America, Citigroup, JPMorgan Chase and Wells Fargo would reportedly be included in the settlement. Some $17 billion in penalties paid by the banks would go toward principal reductions, $5 billion would go toward a reserve account that would ... [Includes three briefs]

December was a productive month for FHA as the percentage of endorsements, fueled by strong refinance activity, rose 6.3 percent from the previous month, according to Inside FHA Lending’s analysis of agency data. However, 2011 overall was not as generous. Refinance transactions totaled 30,515 for the month, up 15.1 percent from November, with borrowers’ FICO scores averaging in the 703-706 range. Streamline refis were up 20.2 percent and conventional-to-FHA refis also increased 11.5 percent over the same period. Total cash-out refis, likewise, bumped up 7.7 percent on a monthly basis. In the advent of President Obama’s latest refinancing proposal ...

Federal banking regulators this week reminded banks and thrifts to pay close attention to how they monitor risks and calculate loss reserves in their home-equity loan business. An interagency supervisory memo sent this week does not change the regulators’ policy on allowance for loan and lease losses for closed-end second mortgages and home-equity lines of credit, but it urges lenders to “monitor all credit quality indicators” relevant to junior liens. Although many observers have raised concerns about the risk of second mortgages, delinquency rates on loans held by banks, thrifts and credit unions have been lower...

The U.S. residential housing market used to provide the lion’s share of business for non-agency asset securitization, but experts at this week’s American Securitization Forum say it will take years for the sorely damaged housing market to recover and the nationalized mortgage finance system to be overhauled. Supply and demand fundamentals in the housing market are severely broken, said Laurie Goodman, senior managing director at Amherst Securities Group. There are some 2.9 million borrowers in foreclosure or more than 12 months delinquent, plus another 400,000 units of real estate-owned properties. With...

Securitization experts are expecting a rerun of last year in 2012, as the U.S. economy slowly rights itself and most segments of the asset-backed securities market generate reasonable new issuance and stable performance. While observers suggest the housing market may make only modest improvement this year, no one expects much non-agency mortgage activity. Growth in issuance of non-agency mortgage-backed securities is going to be very slow, said Ron Mass, co-head of structured products at Western Asset Management Co. Because the market is underwriting the mortgage borrower, and no longer relying...

If there was any question about what was driving the housing market in 2011, some year-end housing numbers have provided two clear answers: investors and distressed properties. The combination of investors buying up large amounts of distressed properties not only put downward pressure on home prices, but also cut into the home-purchase mortgage business by generating a significant number of cash sales. These are some of the major conclusions that can be drawn from a look at 2011 results from the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. Last year’s housing...(Includes one data chart)

The Federal Reserve’s recent suggestion that policymakers consider having the government-sponsored enterprises refinance underwater non-agency mortgages appears unlikely to happen, according to industry analysts and even the Fed. Still, the Fed claims such a program would stabilize the housing market and it would likely reduce losses on non-agency mortgage-backed securities. The Fed said the Home Affordable Refinance Program could be expanded beyond GSE loans – or Fannie Mae and Freddie Mac could implement new programs – to refinance non-agency borrowers that would otherwise meet HARP underwriting requirements. According to the Fed, 1.0 million to 2.5 million non-agency borrowers meet HARP refi standards ...