RMBS

While Bank of America's settlement with Freddie Mac and Fannie Mae provides greater clarity for its ultimate exposure regarding representations and warranty losses, there is still uncertainty for the bank holding company regarding losses in the areas the deal does not cover, a report from Fitch Ratings said.

Mortgage rates slipped a few basis points in the week ending Jan. 6. According to Freddie Mac, 30-year. fixed mortgage rates averaged 4.77% with an average 0.8 point, down nine basis points from last week. Still, the no-point rate remains near 5% and removes many borrowers from the refinancing window.

Shares of MBIA jumped by nearly one-third in the last week as traders bet that the bond insurance holding company will win or settle a series of lawsuits.

Residential servicers that are part of the HOPE NOW alliance completed 112,022 loan modifications in November, a 10% drop from the previous month as proprietary modifications fell to their lowest level since the fall of 2009.

Gleacher & Co. said Tuesday that it has started a residential mortgage banking subsidiary called Descap Mortgage Funding.

U.S. Bank National Association, which is U.S. Bancorp's lead bank, has completed the purchase of the domestic and European-based securitization trust administration businesses of Bank of America. The deal closed on Dec. 30.

House prices are likely to go down during the first half of 2011 and then rebound in the second half, according to many forecasters.

Mortgage application activity declined 3.9% in the week ending Dec. 24 in response to higher mortgage rates and the year-end holiday slowdown.

Ever since private-label MBS litigation began, aggrieved investors have faced an uneasy trade-off between cost and thoroughness: They must prove their losses stem from systemic underwriting flaws, but they can ill afford the time and money required to bicker over how each loan was underwritten.

While much of the next Congress will focus on making changes to the Dodd-Frank Act, lawmakers are also likely to deal with problems in mortgage servicing.