Secondary Market

The Securities Exchange Commission voted Wednesday to propose new rules to enhance oversight of clearing agencies that are "systemically important" or that are involved in complex transactions, such as security-based swaps.

The Securities and Exchange Commission (SEC) announced Wednesday that it has charged global investment bank and brokerage firm Jefferies LLC with "failing to supervise employees on its mortgage-backed securities desk who were lying to customers about pricing."

In recent months, institutional investors seem to prefer buying non-performing loans instead of more solvent ones, according to David LeBlanc, managing director of capital markets at DebtX. His company is the world’s largest online loan sale advisor for buyers and sellers of commercial, consumer, and specialty finance debt.

Christy Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP) announced in a press release Friday that a federal jury in New Haven has convicted Jesse C. Litvak, a registered broker-dealer and former managing director at New York investment bank Jefferies & Co., Inc., of multiple offenses involving schemes to defraud customers trading in residential mortgage-based securities (RMBS).

Wells Fargo is looking to reenter the subprime mortgage market by lowering its standards of acceptable credit scores for borrowers. Wells Fargo is the largest U.S. mortgage lender, and a move back into the subprime market may signal a sizable shift in the mortgage lending environment.

In prepared remarks for the House Financial Services Committee, newly installed Fed chair Janet Yellen echoed much of what analysts have seen in recent Federal Open Market Committee (FOMC) statements, with references to a recovering (but still weakened) labor market, a slowing housing market, restrictive fiscal policy, and the usual prediction of a “moderate” expansion in the nation’s economic activity.

Freddie Mac announced the pricing of its first Structured Agency Credit Risk (STACR) transaction of the year: a $1 billion offering of debt notes whose buyers will share in the risk. According to the company, the offering "represents one of the largest subordinate mortgage credit securitizations ever brought to market."

Ocwen Financial Corporation announced Thursday that plans to purchase the mortgage servicing rights of a portfolio worth $39 billion from Wells Fargo Bank have been halted by the New York Department of Financial Services (NY DFS). The Atlanta-based business serves as a financial services holding company. The transaction has been halted indefinitely, and any timeline for the completion of the deal remains undecided.

About four years after the Federal Housing Finance Agency (FHFA) directed the GSEs to develop a uniform collateral data portal, the Office of the Inspector General of the Federal Housing Finance Agency (FHFA OIG) finds the portal is not being used to its potential, and the GSEs continue to purchase loans with red flags.

In its weekly published Primary Mortgage Market Survey, Freddie Mac put the average 30-year fixed mortgage rate at 4.23 percent (0.7 point) for the week ending February 6, down from 4.32 percent previously. Meanwhile, Bankrate reported a drop of 7 basis points in the 30-year fixed average to 4.43 percent, with the 15-year fixed falling 6 points to 3.50 percent.