RMBS

For several months Fannie Mae has insisted that it's not in the servicing business, but a recent 10-Q filing by the government-owned GSE reveals that it agreed to buy $74 billion of MSRs from Bank of America in the third quarter. No purchase price was disclosed.

New York Mortgage Trust (NYMT) said it plans to use the net proceeds from its recently priced common stock public offering to acquire certain of the company's target assets, including multifamily CMBS.

Massachusetts on Thursday sued the nation's five largest residential servicers, alleging their foreclosure practices were unlawful and deceptive.

For the week ending Dec. 1, mortgage rates were little changed as reported by Freddie Mac's weekly survey.

Freddie Mac announced it has ordered all evictions involving foreclosed occupied single family and 2 to 4 unit properties that had Freddie Mac mortgages to be suspended from December 19, 2011 to January 2, 2012.

Early outlooks for 2012 suggested net organic supply at around $10 billion with an added volume of more than $78 billion coming from paydowns/sales from the GSE and U.S. Treasury portfolios.

Bloomberg recently reported that a number of dealers expect the Fed to initiate a new round of MBS purchases, with the goal of pushing mortgage rates lower and giving a boost to the still-sickly housing market. The idea of more MBS purchases raises a host of critical issues, particularly with respect to an exit strategy. (An investor who holds more than $1 trillion of an asset class effectively becomes the market.) Nonetheless, I believe that a well-conceived program can positively impact mortgage rates and housing.

With the macroeconomic uncertainty and headline risk still driving the securitization markets as 2012 comes to an end, it is no wonder that investors are looking for assurance before they sail through the uncharted waters of structured investments.

As the European sovereign crisis and uncertainty in the U.S. housing market play havoc with the prices of securitizable assets, appraising risk seems as easy for investors as threading a needle while riding a rollercoaster.

To achieve a recovery in both the housing sector and the overall economy, mortgage banks need insight into the misconceptions on how mortgage delinquency and economic stress have impacted borrower behavior. This includes insight into what a "strategic default" is.