Secondary markets

On an otherwise slow Friday, 11 of the 17 Mortgage Industry Equity Composite closed lower than on Thursday.

The benchmark yield rose above 3% for the first time in three months before fluctuating as investors weighed the Fed’s decision last week to start cutting bond-buying in January.

Purchase mortgage volumes will come in lower than some expect next year, securities strategists fear.

Land-backed debt, called dirt bonds, earned 1.1% through Dec. 23. This is more than any other area of the market, according to Standard & Poor’s.

Many new issues are experiencing 10%-20% growth above their initial offering size, according to Fitch.

Anthony Orso, CEO of Cantor Commercial Real Estate, has a forecast for commercial mortgage-backed securities issuance that far outstrips that of others in the market.

Bayerische Landesbank has filed similar residential mortgage-backed securities suits against other banks over the past two years.

Incoming FHFA director Mel Watt’s postponement of a g-fee increase may mean he is likely to favor expansion of credit over shrinking the GSEs.

The ratings agency has downgraded $45 million in securities issued by Bank of America in 2005 and 2006 citing macroeconomic and servicing factors.

Allstate filed similar suits in the same court against Bank of America’s Merrill Lynch unit, Citigroup, Goldman Sachs Group and Morgan Stanley.

The performance of Mortgage Industry Equity Composite shares tracked by this publication ranged from an increase in value by as much as 7% to a loss of less than 1%.

There previously were triple-C, double-C or single-C ratings on all the downgraded commercial mortgage-backed securities, suggesting defaults were likely.

MBS issuance continues to decline as the Fed reduces bond buying.

Next year could mark the return of the first purchase-dominated mortgage market since 2000 if the Federal Reserve’s decision to reduce its bond purchases holds and current forecasts pan out.

Companies like Lennar Corp. have seen an 18% jump in prices on their inventory this year.

All but two of the Mortgage Industry Equity Composite members closed higher on Friday than they did on Thursday.

The aggregate principal balance of the purchased loans, secured by six different multifamily and mixed-use properties owned by the same borrower, was approximately $18 million.

Some see little evidence that shrinking Fannie and Freddie will bring private capital into the mortgage market.

Michael Flood previously was a director in Fannie Mae’s single and multifamily divisions and also oversaw Troubled Asset Relief Program assets for the White House Office of Management and Budget.

Auditors report solid improvement in the capital position of the federal mortgage insurance fund.