Secondary markets

First Horizon National in Memphis lost close to $125 million in the second quarter after it bought back scores of soured mortgage loans from Fannie Mae and Freddie Mac.

Citigroup plans to cut roughly 350 additional jobs this year from its securities division, which includes investment banking and trading.

San Bernardino County's proposal to use eminent domain to seize, and then restructure, underwater private-label mortgages could hurt Fannie Mae, Freddie Mac and the Federal Home Loan Banks.

On July 17, a 26-count indictment was unsealed charging Eliseo Jara Jr., Sergio Jara, Antonio Perez Marcial, Lucia Yolanda Chavez, Arlene Jeanette Jara, Candace Shantel Gonzales, Joseph Shawn Chavez Jr., Melissa Rochelle Jara and Ricardo Fabian Salinas in a mortgage fraud conspiracy. The indictment was returned on July 12 by a federal grand jury in Fresno and the defendants were arrested at their residences on July 17.

The Securities Industry and Financial Markets Association has reached a consensus on the issue of cities using their power of eminent domain to refinance underwater mortgages that reside in private-label MBS, saying it will foul up the securitization process.

As we’ve reported before, private equity firms have been eyeing the mortgage market for the past two years – in particular MSRs. But here’s the catch: although there has been plenty of ‘talk,’ no household name PE firms (if there is such a thing) have taken the bait.

The Prestwick Mortgage Group is marketing a $58 million package of MSRs backed by mostly multifamily commercial mortgages held by private investors.

Orrstown Financial Services sold $28.6 million of nonperforming commercial loans to an unnamed outside investor.

Wells Fargo will continue to purchase brokered loans through its correspondent channel, which has cheered up the National Association of Mortgage Brokers.

Total loan application volume increased 16.9% on a seasonally adjusted basis for the week ended July 13.

The problem with the jumbo MBS market is the sterling credit quality of current production and the staunch unwillingness of originators to sell mortgages into securitization trusts.

CU Members Mortgage said it signed 22 new credit union clients in the second quarter.

A regulator will allow bond insurer MBIA Inc. to make a payment on surplus notes issued in 2008.

Among the many concerns San Bernardino County’s recent eminent domain proposal highlighted, one that stood out to me was the larger problem with second liens.

ASF executive director Tom Deutsch told a congressional panel that the 5% risk retention requirement will increase costs for mortgage borrowers. But the costs will be “prohibitive” if the final rule also requires the securitizer to maintain a “premium capture cash reserve account,” which is not required by the statute.

With servicing multiples as low as they’ve been over the last 18 months, the head of Edison, N.J.-based Real Estate Mortgage Network Inc. has decided to take advantage of the situation, growing its portfolio by starting a correspondent lending division. The new unit will operate out of its new Irvine, Calif. wholesale fulfillment center.

Two Harbors Investment Corp. plans to offer 35 million additional shares of its common stock in a public offering, using the proceeds to buy additional MBS.

A day after Wells Fargo dropped its wholesale/broker bombshell, the smoke is starting to clear and some industry players are taking a proactive approach to what may lie ahead.

Twelve Democratic senators have called for a U.S. investigation into any role banks and regulators may have played in the scandal over the London Interbank Offered Rate.

As California goes, so goes the nation? Let’s hope not, at least as to legislation that will make California the first state in the nation to codify provisions of the national mortgage settlement.