Agency MBS

Browse articles from all of our Newsletters related to Agency MBS.

February 12, 2016 - Inside FHA/VA Lending

Share of Ginnie VA MBS Down in Fourth Quarter, Wells Fargo Leads

Sellers delivered $35. 2 billion in VA loans into Ginnie Mae pools in the fourth quarter of 2015, down 15.0 percent from the previous quarter, according to Inside FHA/VA Lending’s analysis of Ginnie loan-level data. Retail lenders and correspondents accounted for the bulk of VA loans securitized during the quarter. Retail accounted for 45.8 percent of VA purchase loans, enjoying a slight edge over correspondents, which comprised 45.5 percent of securitized VA loans. The broker share of securitized VA purchase loans was 8.7 percent, down 21.2 percent from the third quarter. Meanwhile, retail accounted for 53.8 percent of Ginnie mortgage-backed securities backed by VA refinance loans in the fourth quarter, while correspondents’ share was down to 28.5 percent. The broker channel accounted for 17.7 percent of VA loans securitized during the period. The average FICO score on Ginnie VA loans in the ... [1 chart]


February 12, 2016 - Inside MBS & ABS

Fitch Proposes Changes to Loss Model Used to Rate RMBS Deals, Slightly Reducing Projected Losses

Fitch Ratings proposed a number of changes to its residential MBS loss model this week, as part of an annual review. The changes would prompt slightly lower loss expectations for most of the types of deals that are currently being issued. The rating service said the most meaningful proposed change with a positive implication on loss expectations is expected to be a lower default assumption for borrowers with strong equity positions. The lower default assumption was prompted by a proposed Cure Rate Adjustment. Fitch said...


February 12, 2016 - Inside MBS & ABS

Fannie and Freddie High-LTV Refinance Business Fell Off a Cliff in 2015 Despite Surge in Refi Activity

Fannie Mae and Freddie Mac last year securitized just $14.40 billion of refinance mortgages with high loan-to-value ratios and no private mortgage insurance coverage, according to a new analysis by Inside MBS & ABS. That was down 51.7 percent from the total for 2014 and amounted to a drop in the bucket compared to the high-water mark for the Home Affordable Refinance Program back in 2012. The sharpest downturn was...[Includes two data tables]


February 12, 2016 - Inside MBS & ABS

GSE Risk-Sharing Panelists Tout Benefits of Increased Participation from REITs and Mortgage Insurers

Panelists speaking at a seminar on Fannie Mae and Freddie Mac credit-risk transfers this week agreed that the program, while successful, could use some fine-tuning such as creating a deeper mortgage-insurance version and broader participation by real estate investment trusts. While REITS are active in credit risk transfers, their participation is small when compared to their role in non-agency MBS, said experts at the seminar sponsored by the Urban Institute and CoreLogic. Bill Roth, chief investment officer of Two Harbors, noted that REITs have purchased or retained the subordinate tranches in at least 60 percent of the non-agency MBS issued over the past three years, but just 2 percent of CRT deals issued by the government-sponsored enterprises as of July 2015. “REITs would love...


February 12, 2016 - Inside MBS & ABS

Agency Jumbo MBS Gained Some Ground in 2015 But Market Remained Dominated by 30-Year FRM

Agency MBS backed entirely by “conforming jumbo” mortgages was one of the fastest-growing sectors of the market last year, but traditional 30-year fixed-rate mortgages remained the overwhelming favorite, according to a new analysis by Inside MBS & ABS. Fannie Mae and Freddie Mac issued $21.17 billion of jumbo-only MBS in 2015, a 90.2 percent increase from the previous year. Ginnie Mae issuance of such pools was up even more, by 163.0 percent, last year. Conforming-jumbo loans are...[Includes two data tables]


February 12, 2016 - IMFnews

MBS Prices Spike As Yield on 10-Year Treasury Hits Four-Year Low; What’s Next?

The bid price on the FNMA 3.50 bond has become so frothy that some investors are shorting the security...


February 12, 2016 - IMFnews

Jumbo-Only MBS Issued by Fannie and Freddie Up 90 Percent in 2015

The jumbo MBS business may be struggling but not "GSE jumbos," according new figures from IM&A...


February 11, 2016 - Inside Mortgage Finance

More Potential Trouble for Private MIs: Quicken Wants Them to Bid for Its Borrower-Paid Business

While the mortgage insurance industry patiently waits to see if the FHA will cut government MI premiums further this year, the sector is facing another potential threat to profitability: pricing concessions from the nation’s second largest retail originator, Quicken Loans. Moreover, Quicken – also the largest nonbank lender in the U.S. – is promising to pass on 100 percent of the cost savings to its customers, at least that’s what a company spokesman told Inside Mortgage Finance this week. “We take...


February 11, 2016 - Inside Mortgage Finance

Congressmen Seek Answers from FHFA, Treasury On Violation of GSE Capital Reserve Requirements

Two Republican lawmakers in the House have raised questions about the diminishing capital held by Fannie Mae and Freddie Mac at a time when the two government-sponsored enterprises are expected to generate huge dividends for the government over the next decade. Reps. Stephen Lee (TN) and Mick Mulvaney (SC) recently asked the Federal Housing Finance Agency and the Treasury to consider the impact on the financial system and taxpayers of the GSEs holding no capital. They argue that Fannie and Freddie are already in violation of their statutory capital reserve requirements, and they will not be able to hold any capital after Jan. 1, 2018. “It is...


February 11, 2016 - Inside Mortgage Finance

Jumbo Market Held Up Better Than Government-Insured, Conventional-Conforming Sectors in 4Q15

Don’t tell Bernie Sanders this, but the upper class appeared to suffer less than other folks during the fourth-quarter decline in mortgage production, according to a new Inside Mortgage Finance ranking and analysis. Mortgage lenders produced an estimated $78 billion of big-ticket home loans to, hopefully, well-to-do borrowers during the final three months of last year. That was down 8.2 percent from the third quarter, a little over half the rate of decline in total mortgage originations during the period. For the full year, jumbo mortgages accounted...[Includes two data tables]


February 11, 2016 - IMFnews

Freddie Sees Nothing But Roses for Multifamily

Freddie officials estimate that industry wide, multifamily originations could top $250 billion this year...


February 11, 2016 - IMFnews

MountainView Selling $7.2B of MSRs, Prestwick Out with Large ‘Flow’ Deal

Rates are still falling, but MSR packages continue to hit the auction block...


February 11, 2016 - IMFnews

Two GOP Congressmen Voice Concerns Over Declining GSE Capital

The two GOP congressmen want the Treasury Department and FHFA to suggest steps they can take in the near term “to rectify the situation.”


February 11, 2016 - IMFnews

In 4Q15, Jumbo Market Held Up Better Than GSE and FHA Lending

Bernie Sanders' worst nightmare: not much of a slowdown in the rich taking out jumbo loans...


February 10, 2016 - IMFnews

Short Takes: Everything’s Coming Up Blackstone / Odds Increase for an FHA Premium Cut? / Volatile Rates a GSE Problem? / U.S. Bank No Longer Facing Servicing Restrictions / Correction on Redwood Numbers

Falling rates are great for the mortgage industry, right? Yes and no...


February 9, 2016 - IMFnews

The New White House Budget: $151.5 Billion of GSE Dividends to Come – Right to Uncle Sam

The White House still wants to kill Fannie and Freddie, but in the meantime it benefits from the their healthy revenue streams...


February 9, 2016 - IMFnews

GSE MBS Production Slipped in January. A TRID ‘Ice Patch’?

MBS issuance rebounded in December, with Fannie/Freddie production rising 17.7 percent. In other words, had TRID not caused a December bump in GSE business, January could have looked better than it did.


February 8, 2016 - IMFnews

Fairholme Continues Push to Have FHFA Cough Up More PSPA Documents

In November, Judge Sweeney denied Fannie Mae’s motion to quash or invalidate a subpoena issued by the plaintiff’s counsel…


February 8, 2016 - IMFnews

Finally, Signs of Credit Loosening in the GSE Market

In the fourth quarter, 20.3 percent of refi loans sold to the GSEs were in the low-score category, the highest level for the year.


February 5, 2016 - Inside The GSEs

GSE Roundup

Freddie Default and Work Reporting Changes. Freddie Mac announced last week that servicers are not able to directly change the reporting of a third-party sale to an REO status without submitting a rollback request. Freddie said it also updated its foreclosure sale reporting error codes to more accurately reflect today’s housing market and align it with servicer’s needs. Fannie Ends 2015 with $42.3B in Multifamily Loans. Fannie Mae said that it provided $42.3 billion in financing to the multifamily market in 2015 to support 569,000 units of multifamily housing, of which more than 90 percent of the units financed support affordable or workforce housing. Approximately 99 percent of the multifamily loans Fannie financed last year were securitized...


February 5, 2016 - Inside The GSEs

Fannie Mae Connect Introduces 5 New Reports

Fannie Mae launched a new version of Fannie Mae Connect on Jan. 29 that includes five seller/servicer reports that were added to the system based on customer feedback. The Loan Delivery Edit Dashboard replaces the Data Quality Dashboard and provides insight into any possible issues at delivery with loan-level detail for fatal, warning and informational edits. About six months worth of data will be provided under this new report. This is the only new report that can be accessed by servicers as well as sellers. The Lender Dashboard gives monthly lender-specific data on things like delivery activity, loan performance and operational activities. It also includes a comparison of profile to peers and to expected loan performance value.


February 5, 2016 - Inside The GSEs

DU Updates Set for June Includes Trended Credit Data

Fannie Mae is planning to release an updated version of Desktop Underwriter in June with more specific details to come by the end of this month. But for now the GSE notified its lenders about some of the changes they can expect in DU Version 10.0. The updates in the latest version will “help lenders underwrite with confidence while expanding access to credit and sustainable homeownership for creditworthy borrowers,” said Fannie in a notice that went out on Jan. 28. The release is targeted to take place the weekend of June 25, 2016, and will include enhanced credit risk assessment using trended credit data provided by Equifax and Transunion. This tool...


February 5, 2016 - Inside The GSEs

Fannie Says High DTI Program Not Risky, Creates Mortgage Access

Fannie Mae said its new mortgage product that allows borrowers to have higher debt-to-income ratios because it includes income from non-borrowers is not risky. HomeReady was rolled out in August as a revised affordable lending product to replace the MyCommunityMortgage program focused on helping low- and moderate-income borrowers. A key component of HomeReady is that it counts income from relatives or friends who will also live in the home, which helps allow for a DTI ratio of up to 50 percent. Fannie said the reality of today’s market shows that homeowners are sharing homes and in many cases a significant amount of the income is being earned by the co-resident in these “extended-income households.”


February 5, 2016 - Inside MBS & ABS

Originators/Sellers Win Big in U.S. Appeals Court, Judges Agree Claims Accrue When a Loan Is Sold

A federal appeals court in Denver unanimously affirmed a lower court ruling that a claim of damage related to an originator/seller’s misrepresentation accrues when the loan is sold. Ruling in six cases involving plaintiffs Lehman Brothers Holdings and Aurora Commercial Corp. versus Universal American Mortgage Co. and Standard Pacific Mortgage, the Tenth Circuit Court of Appeals rejected plaintiffs’ contentions that their claims were really “indemnification” claims that did not accrue until they bought the loans from Fannie Mae and Freddie Mac. The overarching issue in this complicated case is...


February 5, 2016 - Inside MBS & ABS

Cash-Out Refinances on the Rise, More GSE Borrowers Are ‘Un-HARPing’ Loans

Cash-out refinances are staging a quiet comeback as rising home-price appreciation makes such deals feasible for more homeowners. The number of cash-out refinances continued to reach new recent highs in the third quarter of 2015, rivaling numbers not seen since 2008. Black Knight Financial said close to 300,000 cash-out refinances were originated in the third quarter of last year, and about one-million over the past 12 months. During that same time period, 42 percent of all first-lien refinances had a cash-out component, the highest share since 2008. In addition, the average cash-out amount was the most it’s been since 2007 at more than $60,000. In all, these homeowners tapped...


February 5, 2016 - Inside MBS & ABS

Mortgage REITs Have Been Down So Long, They’re Starting To Look Up, But MBS Investments Continue to Shrink

The outlook for publicly traded real estate investment trusts that invest in agency MBS and related products is starting to improve, in part, because competing investments are looking ugly. That might seem like a small consolation prize for REITs, but several are posting decent earnings, even though the book value of their common stock is relatively weak. Meanwhile, while certain investors shun their stocks, many companies have engaged...


February 5, 2016 - Inside MBS & ABS

Jefferies and Two Nonbank Lenders Team Up on Planned MBS Backed by Warehouse Facility for Agency Loans

Jefferies Funding is underwriting a securitization of a revolving warehouse facility for agency mortgages originated by two nonbanks. The $225.0 million Station Place Securitization Trust 2016-1 received provisional Aaa ratings this week from Moody’s Investors Service. The rating service said the transaction is based on a “back-to-back” repo structure, with the three classes of notes scheduled to be paid off one year after issuance. The proceeds from the sale of the notes will be used by the issuer to purchase eligible mortgages and participation certificates from the repo seller. The revolving warehouse facility will be sponsored...


February 5, 2016 - Inside MBS & ABS

Agency MBS Issuance Down Slightly in January Despite Increase in Purchase-Mortgage Activity

Fannie Mae, Freddie Mac and Ginnie Mae produced a combined $88.96 billion of single-family MBS in January, a modest 1.4 percent decline from December, according to a new ranking and analysis by Inside MBS & ABS. Ginnie production was actually up 7.2 percent from the previous month, while both the government-sponsored enterprises posted declines in new issuance. January’s agency MBS production included...[Includes two data tables]


February 5, 2016 - IMFnews

How Many Seller-Servicers Will Actually Use the GSEs’ New ‘Loser-Pay’ Dispute Resolution Process?

Colonial National Mortgage was a beta site for the IDR and Allen Maulsby, executive vice president of the bank, said the IDR process is very “legalistic…”


February 5, 2016 - IMFnews

Issuance of Agency MBS Down Slightly in January; But Ginnie Production Rises

Ginnie Mae even posted a 5.6 percent increase in refinance loan securitizations...


February 4, 2016 - Inside Mortgage Finance

House Approves Legislation Delegating Direct Endorsement Authority to USDA Lenders, Streamlining FHA Condo Rules

Housing reform legislation that would ease FHA restrictions on condominium financing and allow delegation of loan approval authority to qualified lenders under the U.S. Department of Agriculture’s rural housing programs this week passed the House by a vote of 427-0. Described as an FHA reform bill, H.R. 3700, the “Housing Opportunity Through Modernization Act,” would make several incremental changes across a number of federal housing programs. It would modify...


February 4, 2016 - Inside Mortgage Finance

Moody’s Upgrades MGIC, Radian to Investment Grade; NAIC’s Proposed Capital Rules Create Uncertainty

For the first time since October 2008, Moody’s Investors Service upgraded two top private mortgage insurance companies to investment grade due to strong performance of new insurance written, cost savings and fewer losses. However, risk factors, including proposed capital regulations from the National Association of Insurance Commissioners, could adversely impact the ratings. Mortgage Guaranty Insurance Corp. and Radian Guaranty now have Baa3 ratings from Moody’s, although other rating servicers appear disinclined to follow. Both MIs continue to be rated below investment grade by Standard & Poor’s. The improved ratings come...


February 4, 2016 - Inside Mortgage Finance

GSEs Launch Independent Dispute-Resolution Process As Final Determination on Loan Eligibility Disputes

Fannie Mae and Freddie Mac this week announced the final piece of a multiyear process to relieve seller anxiety about potential buybacks, an independent dispute-resolution process for the most difficult to resolve repurchase demands. As a last resort, the new IDR process may not see that much activity, especially since seller repurchases of government-sponsored enterprise mortgages have been declining sharply. For a buyback dispute to get to a final determination by a third-party arbitrator, it will have to go through three normal steps in the buyback process. The IDR process began...[Includes one data table]


February 4, 2016 - IMFnews

More of the Same: House GOP Launches Salvos at GSEs, FHA, CFPB

As might be expected, the GOP is once again pushing to kill Fannie Mae and Freddie Mac...


February 3, 2016 - IMFnews

Final Tally: 2015 the Second Worst for MBS Trading Volume

No wonder Wall Street firms are trimming their fixed-income desks. MBS daily trading continues to struggle…


February 2, 2016 - IMFnews

Fannie Mae and Freddie Mac Implement ‘Independent Dispute Resolution’ Program

For lenders, the best scenario is that an arbitrator might rule in their favor, with a GSE reimbursing them for what Fannie and Freddie call “certain costs and expenses.”


February 1, 2016 - IMFnews

Short Takes: Equifax Includes FHA in its ‘Subprime’ Numbers / When is Subprime Not FHA? / It Appears PHH is Trading at a Discount / A Jumbo Loan for the Playboy Mansion? / President Trump Might Free the GSEs

Super-jumbo lenders take note: Hugh Hefner’s Playboy mansion is now officially for sale.


February 1, 2016 - IMFnews

FBR Drops Coverage of PHH, Fannie and Freddie Too; No Earnings Date for PHH Yet

In the announcement on dropping coverage, FBR quoted PHH management as saying “organic growth is hard to come by, strategic initiatives are taking longer to achieve, and prepayment speeds on the company’s MSR are still elevated…”


February 1, 2016 - IMFnews

Cenlar Ordered to Pay Borrower More than $200,000 for Causing ‘Emotional Distress’ after ‘Outrageous Conduct’

The subservicer started charging the borrower various attorney fees after completing the modification and didn’t respond to the mortgagor’s questions about those fees in a timely matter...


January 29, 2016 - Inside FHA/VA Lending

Around the Industry


January 29, 2016 - IMFnews

What We’re Hearing: Oh, and Here’s a New Fee / Losing Money on Loans Because of TRID? / Too Embarrassed to Give TRID Results? / What Would Ed DeMarco Say Now? / Phoenix Out with New MSR Deal / Promotions at Stonegate

90 cents on the dollar for a mortgage with TRID errors? That can't be welcome news...


January 29, 2016 - IMFnews

Do GSE Plaintiffs Have a Shot in State Court Regarding the Earnings ‘Sweep’?

The plaintiffs argue that state law prohibits the preferred stock of a corporation from getting a cumulative dividend right equal to all of a company's net worth...


January 29, 2016 - Inside MBS & ABS

GSE Nonperforming Loan Auctions Off to Record Start in 2016, Debate on HUD Sales Continues

Fannie Mae and Freddie Mac plan to ramp up their bulk sales of nonperforming loans in 2016 with the two government-sponsored enterprises ushering in the year by going to market with nearly $3 billion in NPL offerings in January. Freddie’s first NPL auction of the year was its largest so far, totaling $1.6 billion in unpaid principal balance and marketed in seven pools. The NPLs are serviced...


January 29, 2016 - Inside MBS & ABS

Fitch Revises MBS Rating Criteria, Allowing For Differentiation in Due Diligence Based on Asset Types

Fitch Ratings will allow for differences in third-party due diligence practices when rating various types of residential MBS, granting concessions to risk-sharing transactions from the government-sponsored enterprises. The firm released revised master-rating criteria late last week. Among the changes compared with criteria that were released in October was an allowance for differences among non-agency MBS backed by recent originations, transactions related to the GSEs and non-agency MBS backed by seasoned loans. While most jumbo MBS issued in recent years have included third-party due diligence reviews of 100 percent of the loans in a deal, the GSEs’ much larger risk-sharing transactions have been...


January 29, 2016 - Inside MBS & ABS

GSE Shareholders Argue Treasury Sweep Illegal, Look to Higher Courts for Clarity on State Law

Investors in Fannie Mae and Freddie Mac stock haven’t had a lot of success challenging the federal government’s quarterly earnings sweep at the two government-sponsored enterprises, but they’re looking for better results in the two states where the GSEs are chartered. The plaintiffs, David Jacobs and Gary Hindes on behalf of themselves and other shareholders, said state law prohibits the preferred stock of a corporation from getting a cumulative dividend right equal to all the net worth of the corporation. Their lawsuit is pending in the state supreme courts of Delaware, where Fannie is chartered, and Virginia, Freddie’s corporate domicile. The filing pointed...


January 29, 2016 - Inside MBS & ABS

Redwood Pulls the Plug on Buying Fannie/Freddie Loans; Vows to Return to its Roots as an ‘Investor’

Redwood Trust, which pioneered the revival of the jumbo MBS market a few years back, this month officially exited the Fannie Mae/Freddie Mac correspondent-purchase business, dismantling the effort and trimming the size of its Denver office. The real estate investment trust had entered the government-sponsored enterprise market two years ago, after obtaining agency approvals at the end of 2013. It quickly built a network of several dozen lenders that sold whole loans to Redwood, which pooled them in GSE MBS. But sources familiar with the effort told...


January 29, 2016 - Inside MBS & ABS

Although Average Trading Volume of MBS Improved in 2015, December Was a Dud

For full-year 2015, the average daily trading volume for agency MBS improved by 9.2 percent from the year prior to $194.4 billion, according to figures compiled by the Securities Industry and Financial Markets Association. Although that might seem like something to crow about, there’s some bad news in the numbers: December marked the worst reading of the year with an average daily trading volume of just $149.2 billion. No other month comes close, not even November at $180.2 billion. Over the past 10 years, 2015 will go down...


January 29, 2016 - Inside MBS & ABS

Securitization of Income-Property Mortgages Reached Post-Crash High in 2015 Thanks to Multifamily Boom

The surging multifamily housing market in the U.S. was a major factor in the huge increase in commercial MBS issuance last year, according to a new Inside MBS & ABS analysis. A total of $206.66 billion of income-property mortgages were securitized during 2015, a 22.6 percent increase from the previous year. It was the strongest annual output of commercial MBS since 2007, the year before the wheels fell off the non-agency CMBS market. New issuance rebounded...[Includes one data table]


January 29, 2016 - IMFnews

Income-Property MBS Hit Post-Crash High in 2015; GSE, Ginnie Mae Multifamily Shine

All three agencies posted big increases in multifamily MBS issuance last year, with Freddie (up 65.4 percent) and Fannie (up 36.4 percent) leading the way…


January 28, 2016 - Inside Mortgage Finance

Investor Flight to Safety Driving Rates Lower, Extending Support to the Mortgage Market

The turmoil in financial markets around the world is fueling a flight to safety on the part of investors into U.S. dollar-denominated assets, helping to keep mortgage rates in the U.S. housing market lower than they otherwise would be. But how long that will continue is anyone’s guess. “The recent volatility in worldwide financial markets caused Treasury rates to decline, so we’ve seen that being picked up in mortgage rates,” Danielle Hale, managing director of housing statistics for the National Association of Realtors, told Inside Mortgage Finance. Mike Fratantoni, chief economist at the Mortgage Bankers Association, said...


Poll

A lot has been written lately regarding loan closing delays tied to the new TRID rule. What’s been the average delay at your lending shop, if at all? (Report in business days, not calendar.)

TRID has caused no delays whatsoever because we were prepared.

30%

1 to 4 days.

27%

5 to 10 days.

13%

11 to 15 days. It’s been a nightmare.

11%

We’re too embarrassed to tell you.

20%

Housing Pulse