Secondary Market

The Federal Housing Finance Agency (FHFA) is restructuring its safety and soundness and mission offices this week, including establishing an integrated supervision structure and a revamped housing mission and policy division. The agency says changes in the supervision program structure will promote greater uniformity and consistency in the examinations of Fannie Mae, Freddie Mac, and the Federal Home Loan Banks.

Although the nation is in the midst of an economic recovery, unemployment levels remain extremely elevated, and that - along with lower housing prices and a large inventory of homes in foreclosure - is leading to an increase in defaults on housing finance agency (HFA) loans, according to the analysts at Standard & Poor's (S&P). A recent study by S&P has revealed that delinquent HFA loans have exceeded state averages for the first time since the agency began tracking loan performance in 2006.

Moody's Investors Service studied two million loans backing residential mortgage-backed securities (RMBS) pools and found that a loan that is modified and then reported as current is three times as likely to default over the ensuing twelve months as a current loan that has not been modified. The agency's also put the practices of eight major servicers under the microscope. It found that six-month re-default rates vary considerably, from 20 percent for Citi and Litton to 33 percent for Bank of America.

Freddie Mac announced this week that its multifamily whole loan and bond guarantee business had approximately $15 billion in volume in 2010, down from $17 billion in 2009. The volume includes Freddie Mac's targeted affordable housing products. Last year Freddie Mac's multifamily business settled more than $13 billion through the GSE's conventional programs.

ICP Financial, a U.S. real estate investment firm headquartered in Boulder, Colorado, has signed an agreement with an unnamed top 5 European bank to buy distressed commercial real estate property and mortgage portfolios directly from American banks. The arrangement gives ICP a $4.8 billion purse to make individual purchases between $5 million and $180 million.

The Federal Housing Finance Agency (FHFA) has sided with consumer advocacy groups that say private transfer fee covenants, also referred to as Wall Street home resale fees, place a hidden financial burden on homebuyers and home sellers. FHFA sent a proposed rule to the Federal Register this week, which would limit Fannie Mae, Freddie Mac, and the Federal Home Loan Banks from dealing in mortgages on properties the federal agency describes as ""encumbered"" by certain types of private transfer fee covenants.

The delinquency rate on loans held in U.S. commercial mortgage-backed securities (CMBS) rose again in January to hit its highest reading in history, despite new issuance and falling spreads, according to Trepp, LLC. The New York-based firm closely tracks the CMBS and commercial mortgage market, and it found that the percentage of loans 30 or more days delinquent, in foreclosure, or REO climbed 14 basis points last month to 9.34 percent. The value of delinquent loans in commercial mortgage bonds now exceeds $61.4 billion.

DBRS, a provider of credit rating opinions across a range of financial institutions, corporate entities, government bodies, and various structured finance product groups, has hired Richard Carlson as an SVP within the commercial mortgage-backed securities (CMBS) group. Carlson will focus on operational risk reviews for CMBS ratings, including servicer evaluations and originator reviews globally.

Ally Financial, the parent company of GMAC Mortgage, said Tuesday that it brought in net income of $1.1 billion for the full-year 2010, a sharp turnaround from the $10.3 billion net loss recorded for 2009. During the fourth-quarter period of last year, the company posted a profit of $79 million, compared to a net loss of $5 billion for the fourth quarter of 2009. The company's financial sheet turned from red to black largely due to gains in its mortgage operations.

Fannie Mae announced Tuesday it has launched a multifamily mortgage-backed securities system called Fannie Mae Guaranteed Multifamily Structures, or Fannie Mae GeMS, that will include Delegated Underwriting and Servicing (DUS) Megas, DUS REMICs, and syndicated DUS Megas.