RMBS

A proposal by San Bernardino County to use eminent domain to seize, and then restructure, underwater private-label mortgages would result in more than just losses to private investors. Fannie Mae, Freddie Mac and the Federal Home Loan Banks are also in major investors in private-label securities and they too would suffer if the county took over what is estimated to be 150,000 underwater mortgages.

The Securities Industry and Financial Markets Association (SIFMA) has reached a consensus on the issue of cities using their power of eminent domain to refinance underwater mortgages (using reducing principal reductions) that reside in private-label MBS, saying it will foul up the securitization process.

Thanks to continued, ultra-low interest rates, Freddie Mac is feeling quite bullish about loan production for the remainder of 2012, hiking its origination forecast by $200 billion to $1.65 trillion for the year.

The Prestwick Mortgage Group is marketing a $58 million package of mortgage servicing rights backed by mostly multifamily commercial mortgages held by private investors.

Freddie Mac reported new record lows along 30- and 15-year fixed mortgage rates as well as 5/1 hybrid ARMs for the week ending July 19. Both 30- and 15-year rates declined three basis points to 3.53% (no -point rate at 3.71%) and 2.83%, respectively. Meanwhile, 5/1 hybrids fell five basis points to a 2.69% average which matches this week's one-year ARM rate.

Western Asset Mortgage Defined Opportunity Fund’s public-private investment fund or Master Fund was terminated on July 15.

The U.S. Department of Housing and Urban Development (HUD) will now be accepting applications for qualified entities to purchase severely troubled loans that were formerly insured by the Federal Housing Administration (FHA) through the Distressed Asset Stabilization Program.

Syncora Holdings announced on July 17 that its unit Syncora Guarantee had settled claims related to RMBS with Countrywide Financial Corp., Bank of America Corp. and their affiliates.

It appears that Redwood Trust—until recently the only securitizer of jumbo mortgages in the nation—has company in the space: Credit Suisse First Boston. But don’t pop the champagne quite yet. It’s not what you think.