Secondary Market

The ongoing tension between the Justice Department and the House Oversight Committee saw a new development this week as Rep. Darrell Issa (R-California), committee chair and vocal critic of Attorney General Eric Holder, requested the department turn over all of its documents related to its recent securities settlements with JPMorgan Chase and Citigroup.

Joseph A. Smith Jr., who also oversees the 2012 National Mortgage Settlement between five major mortgage servicers and 49 states, said Tuesday that Chase has provided more than $6.3 million so far in credited consumer relief, with nearly $5.1 million coming from cuts to borrowers' principal loan amounts and the rest coming from forbearance actions.

Ratings agency Standard & Poor's might be looking to strike a deal of up to $1 billion with the government to settle a suit filed last year, the Wall Street Journal reports. The suit alleges that S&P "knowingly and with the intent to defraud, devised, participated in, and executed a scheme to defraud investors" in collateralized debt obligations and securities backed by residential mortgages between September 2004 and October 2007.

More and more lenders are taking advantage of OpenClose's LenderAssist loan origination system (LOS) to gain greater insight into the secondary market, the Florida-based company announced.

Citi released its quarterly earnings report Monday morning, posting net profit of $181 million—a decline of 96 percent compared to earnings of $4.2 billion a year ago. The second quarter's results include a $3.8 billion charge related to a $7.0 billion settlement with the Residential Mortgage-Backed Securities (RMBS) Working Group, also announced early Monday.

Representatives John K. Delaney (D-Maryland), John Carney (D-Delaware), and Jim Himes (D-Connecticut) introduced Thursday new housing finance reform legislation aimed at winding down Fannie Mae and Freddie Mac and replacing them with a federally backed insurance program administered through Ginnie Mae.

Signs of a healing—though still depressed—jobs market provided some slight lift to mortgage rates this week, market data shows. In its weekly Primary Mortgage Market Survey, Freddie Mac recorded the average 30-year fixed rate at 4.15 percent (0.7 point) for the week ending June 10, up from 4.12 percent in last week's survey. A year ago, the 30-year fixed-rate mortgage (FRM) averaged 4.51 percent following a spike in late June.

Citing unnamed sources, the Wall Street Journal reported late Tuesday that Citigroup and the Justice Department are closing in on a $7 billion settlement to resolve an investigation into the bank's sale of faulty mortgage-backed securities. The Journal reports that according to people familiar with the matter, the deal will include $4 billion in cash payments to the federal government, with the rest coming in the form of borrower relief.

In its newest monthly prime jumbo trends report, Fitch Ratings finds weighted average combined loan-to-value ratios for residential mortgage-backed securities (RMBS) deals made in the last few have fallen substantially, fueled by ongoing gains in house prices. Together, the improvement in equity positions combined with stronger borrower credit profiles has helped keep delinquency down, Fitch reports.

On Wednesday, the Urban Institute (UI) issued a report finding that, based on the latest numbers, Ginnie's book of business is now at $1.5 trillion—a rate of growth that has tripled over the last seven years. What this means is that at its current rate of growth, Ginnie Mae will soon surpass Freddie Mac as the silver medalist in the single-family mortgage securitization platform game, behind Fannie Mae.