Secondary Market

The Association of Mortgage Investors has sent letters to a handful of large banks expressing concerns on behalf of its members who hold residential mortgage-backed securities certificates. The mortgage investors called for enforcement of repurchases based on what they described as ""significant breaches"" of representations and warranties that have been discovered in the underwriting of loans, and voiced concerns that servicers are putting more effort into modifying their own loans than those of investors.

The Collingwood Group announced Wednesday that it has retained Manoj K. Singh as a special advisor. In his new role, Dr. Singh will work with the Collingwood Group to help clients navigate the business opportunities that exist in Washington as a result of the housing crisis. Dr. Singh was previously SVP of single-family pricing and securitization at Freddie Mac. He also held executive-level positions with Bear Stearns, Lehman Brothers, and Wasserstein Perella Capital Management.

Mortgage Electronic Registration Systems, Inc. (MERS) is withdrawing from the foreclosure business. MERS has issued a notice to its members stating that no foreclosure proceeding may be initiated and no legal proceedings in a bankruptcy may be filed in the name of MERS. Amid an onslaught of court filings and foreclosure-related investigations, MERS proposed a rule change in March banning its members from using MERS as the foreclosing agent. The policy change has officially been adopted.

Auction.com is in the midst of a three-day online auction of Texas commercial real estate properties and nonperforming notes. The company says in total, the assets up for sale are valued at more than $300 million, making it the largest conglomerate of commercial real estate assets to be auctioned online in Texas history. Barclays Capital matched the list of assets to be sold to its database of commercial mortgage-backed securities (CMBS). The firm pegs CMBS exposure to the Texas auction at about $262.5 million.

Concerns have begun to mount that underwriting standards for loans in newly issued commercial mortgage-backed securities (CMBS) are on the decline. Addressing this issue, the analysts at Fitch Ratings say they believe there is quite a way to go before standards approach levels seen in 2007, a year viewed by many as the most volatile vintage for CMBS. While Fitch agrees that underwriting standards have declined in recent months, the company stressed that deterioration so far has been off of ""very high standards.""

The rise in foreclosures in recent years may lead to long-term vacancies, further exacerbating housing prices and the market as a whole, according to Stephan Whitaker, a Cleveland Federal Reserve Bank researcher. In a recent study, Whitaker determined a strong correlation between foreclosures and vacancy rates, suggesting foreclosure may permanently scar some homes. He found that foreclosed homes still have higher vacancy rates than neighboring houses two to five years after a sheriff's sale.

Fannie Mae has issued a notice to servicers alerting them of a change in the effective date for new delinquency management and default prevention standards. According to the bulletin, Fannie is pushing the date by which servicers must implement the new requirements out by a month to October 1, 2011. The revised rules are part of the directive issued by the company's regulator in late April to bring both Fannie Mae's and Freddie Mac's procedures for handling past-due mortgages in line with one another.

BlackBox Logic, LLC recently entered into agreements with several prominent academic institutions and faculty members to provide researchers with data on U.S. and international residential real estate and capital markets. In addition, BlackBox recently expanded to offer data covering residential mortgage backed securities (RMBS) in the United Kingdom, with plans to expand that service to other European countries.

Treasury is currently reviewing a proposal to aid distressed homeowners by allowing a short sale of mortgage notes from mortgage-backed securities (MBS) trusts to new investors. The proposal was put forth by American Home Mortgage Servicing. The company says this strategy could be key to unlocking principal reduction modifications, which could save hundreds of thousands of homes from foreclosure and reduce losses for both investors and underwater borrowers.

Sales prices of commercial real estate properties rose 6.3 percent in May, according to Moody's Investors Service. The agency's latest reading marked the first positive move in its property price index in six months and the largest one-month increase since Moody's began tracking commercial real estate prices in 2000. The firm's analysts attribute much of the turnaround to an increase in prices of distressed transactions, which rose 4.8 percent during May.