Servicing

The Federal Reserve could easily purchase mortgage-backed securities or other assets with the cash it gets when existing MBS holdings roll off the government's books, but late Friday questions about whether this would be an effective means of economic stimulus persisted.

Speculation about whether the Fed might try to inject stimulus into the economy by buying more mortgage-backed securities has been greeted with skepticism by some researchers.

The Federal Housing Administration soon will roll out a special refinancing program to help underwater homeowners take advantage of historically low loan rates.

European-style covered bonds, which are being viewed as an additional way to help struggling mortgage and other asset-backed capital markets get back on their feet, moved forward last week but some market participants say the concept is not moving quickly enough.

While record-low single-family mortgage rates continue to fall, refinancing activity remains "relatively shallow" in a historical context as economic data such as Friday morning's weak jobs report continue to reinforce the need for tight underwriting standards.

United Guaranty Corp., Greensboro, N.C. had pre-tax net income of $226 million for the second quarter, parent company American International Group said. The turnaround from a pre-tax loss of $488 million one year prior represents lower levels of newly reported delinquencies on domestic first and second lien loans and international products, as well as higher cure rates for those loans.

July prepayment speeds on Fannie Mae and Freddie Mac cusp coupons spiked, while high coupon speeds were "tame" and Ginnie Mae speeds surged, according to Credit Suisse.

The yield on the benchmark 10-year Treasury fell to a new, yearly low of 2.82% Friday morning in the wake of another weak employment report.

MountainView Capital Group, Denver, has purchased a broker/dealer unit from Capmark Financial, a move that will expand MVCG's ability to trade fixed income securities, including MBS.

Fannie Mae reported a net loss of $1.2 billion in the second quarter — excluding premiums paid to the U.S. Treasury — a sizeable improvement from 1Q when it bled $11.5 billion of red ink.