Secondary Market

Beginning on June 15, 2015, the US Securities and Exchange Commission’s (SEC) rule 15Ga-2 takes effect for new residential mortgage-backed securities (RMBS), according to Moody’s Credit Outlook Report. The rule is intended to provide transparency into the credit quality of mortgage loans underlying transactions. The rule will require issuers or underwriters of asset-backed securities (ABS) that nationally recognized statistical rating organization rate to publish the findings and conclusions of any third-party review (TPR) firms’ due-diligence reports on loan quality.

Years of hardships and constant changes in the mortgage service industry have encouraged RMBS 3.0 investors to voice their requests for servicer improvements, according to Fitch Ratings.

At this year's Federal Home Loan Banks (FHLBanks) directors' conference, speaker FHFA Director Melvin L. Watt, delivered a speech regarding the past year of positive developments that occurred in these 12 banks.

This week, Freddie Mac released the results of its Quarterly Refinance Analysis for the first quarter of this year, revealing that borrowers lowered their monthly mortgage payment and shortened their long-term payment by taking advantage unexpectedly low mortgage rates. Refinance activity accounted for 63 percent of all single-family originations.

HSBC Bank has asked the Court of Appeals in White Plains, New York, to consider reviving a 2012 lawsuit against Deutsche Bank Structured Products Inc. The 2012 claim alleged that Deutsche misrepresented the quality of residential mortgages it sold to investors in 2006.

New Jersey federal court documents filed earlier this week revealed that Prudential Insurance Co. has moved to settle its ongoing lawsuits with Bank of America NA, Merrill Lynch & Co. Inc., First Franklin Financial Group, and a number of lenders in the mortgage industry. The suits, which were first filed in March 2013, alleged Bank of America and others knowingly sold Prudential $2.1 billion in low-quality mortgage-backed securities—and made false statements about them.

Following weeks of debate over whether the Federal Housing Finance Agency (FHFA) would be lowering its fees to guarantee mortgages backed by Fannie Mae and Freddie Mac, the ...

Nomura and the Royal Bank of Scotland, also a defendant in the case, are the first two financial institutions out of 18 sued by the FHFA in 2011 that failed to reach a settlement and took the case to trial. FHFA sued the 18 institutions to recoup U.S. taxpayer costs following the government's $188 billion bailout of Fannie Mae and Freddie Mac in 2008, after which the government seized control of both Enterprises.

Bidders must meet qualifications set forth by FHFA. In early March, FHFA issued enhanced requirements for the buyers and servicers of Agency non-performing loans that call for bidders to identify servicing partners at the time of qualification and complete a questionnaire to demonstrate a record of successful loan resolution through foreclosure alternatives, since many of the loans being sold in these portfolios are deeply delinquent – two years or more delinquent in some cases.

Freddie Mac began the STACR program in the second half of 2013 as part of the Enterprise’s goal of reducing risk to taxpayers by increasing private capital’s role in the mortgage market.