Agency MBS

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

August 27, 2015 - IMFnews

Short Takes: Fannie Gets the Origination Blues / Hopefully, It Won’t Come True / Marix Gets Freddie Approval / Freddie Grows. Don’t Tell FHFA / MIAC Hires Trading Desk Chief

If Fannie Mae's origination forecast comes true, just $615 billion in loans will be written from July 1 to Dec. 31, an ugly outlook indeed…

August 25, 2015 - IMFnews

Fannie Mae Unveils ‘HomeReady,’ A Successor Program to ‘MyCommunityMortgage’

HomeReady will become part of DU later this year and replaces the MyCommunityMortgage product, which in some circles was known as Fannie’s “subprime” option.

August 24, 2015 - IMFnews

Short Takes: And Now for the ‘Dark Side’ of Low Rates / Jumbo Trouble Because of Stocks? / SPS Suddenly Likes Performing Loans / Wells, the Correspondent King (Again) / Buck Hawkins Departs iFreedom

Many wealthy borrowers feel rich because they’re sitting on huge stock market gains achieved over the past few years. But now...

August 24, 2015 - IMFnews

A Growing Source of Profits for the GSEs: Multifamily; Cap Worries?

Freddie’s multifamily business grew so much that some industry observers worried that the GSE could reach the $30 billion annual multifamily business cap set by the FHFA.

August 24, 2015 - IMFnews

MBA’s Stevens Pushes for Ending GSE Conservatorships

A former FHA commissioner, Stevens said GSE reform should include a new charter for Fannie Mae and Freddie Mac...

August 21, 2015 - Inside FHA/VA Lending

HUD Publishes Latest Updates to FHA Single Family Policy Handbook

The FHA will not issue a new case number for any FHA-to-FHA refinance if the current mortgage has a repair or rehabilitation escrow account in FHA Connection. The change, which is one of several updates to FHA Single Family Policy Handbook 4000.1, applies only to FHA streamline refis. It aims to ensure that escrow funds of the mortgage being refinanced are properly applied as well as conform to system requirements. The updated sections become effective on Sept. 14, 2015. Another change clarifies that the payoff statement for the mortgage being refinanced is the only document required when calculating the maximum mortgage amount for simple refi transactions. In addition, guidance for loan-to-value limits for cash-out refis has been updated to clarify that the 85 percent LTV restriction applies only to cash-out refis. HUD also noted that appraisers have flexibility in regards to when inspections should ...

August 21, 2015 - IMFnews

SHORT TAKES: GSE Reform: Fuhgeddaboudit / Ditch the Housing Goals / More Looks Under the CFPB's Hood

Despite former Federal Housing Finance Agency Acting Director Ed DeMarco's call for comprehensive reform of the nation's housing finance system and Fannie Mae and Freddie Mac, the analysts at Compass Point Research & Trading remain convinced "that there is neither the legislative capacity nor political will to address housing finance reform in this Congress."

August 21, 2015 - Inside MBS & ABS

Fracking, Earthquakes and Collapsing Oil Market Pose New Challenges to Housing, Mortgage Finance

Investors have a lot more to worry about these days than the collateral damage stemming from problems in Greece and China and a bumpy U.S. stock market. Ratings analysts indicate some new energy-related risks – most notably earthquakes near “fracking” sites and a plunge in the price of oil – have emerged as potentially significant challenges to investors in real estate and to mortgage lenders. Analysts at Standard & Poor’s said in a recent client note that earthquakes in proximity to fracking sites introduce a unique risk factor into the investment equation for those with a stake in real estate located in affected regions. “In particular, determining whether or not earthquake coverage is...

August 21, 2015 - IMFnews

Freddie Ramping Up Its Multifamily Business

On Wednesday, Freddie Mac announced that it guaranteed its second multifamily small balance loan securitization. The government-sponsored enterprise expects to guarantee approximately $109 billion in SB Certificates and plans to price them next week.

August 21, 2015 - Inside MBS & ABS

Fannie and Freddie Juggle Annual Caps on Multifamily Business With Goals to Increase Affordable Housing

Fannie Mae and Freddie Mac continue to increase their focus on the multifamily segment, which generated growing income for the two government-sponsored enterprises during the second quarter. Freddie Mac’s comprehensive income for multifamily grew by $102 million to $366 million for the second quarter. The increase was primarily due to higher unrealized gains on available-for-sale-securities. New purchase volume remained...

August 21, 2015 - IMFnews

Fannie Names Winning Bidders of Second NPL Sale

Fannie Mae on Thursday unveiled that Lone Star (LSF9 Mortgage Holdings) was the sole winning bidder on its second sale of non-performing mortgages. The auction was marketed in late July and is expected to settle Sept. 25.

August 21, 2015 - IMFnews

GSEs’ Alt A Performance Improves, Losses Persist

Delinquencies are receding in the government-sponsored enterprises’ holdings of Alt A mortgages but outsized losses from the loans are still an issue.

August 21, 2015 - Inside MBS & ABS

Banks Continue Loading Up on Agency MBS as Holdings Reached Record $1.03 Trillion in June

Commercial banks and savings institutions continued to grow their investments in agency MBS during the second quarter of 2015, according to a new Inside MBS & ABS ranking and analysis. Banks and thrifts held $1.583 trillion of agency and non-agency MBS on their balance sheets at the end of June. That was up just 0.3 percent from the first quarter, but it was the highest level since the first nine months of 2012, when bank and thrift MBS holdings topped $1.60 trillion. All the gain came...[Includes two data tables]

August 21, 2015 - IMFnews

Banks’ Agency MBS Holdings Reached Record $1.03 Trillion in June

Commercial banks and savings institutions kept increasing their stake in agency mortgage-backed securities during the second quarter of 2015, according to a new Inside MBS & ABS ranking and analysis.

August 20, 2015 - Inside Mortgage Finance

Manufactured Housing Industry Looks to Fannie Mae and Freddie Mac for Better Financing Options

The manufactured housing industry wants the Federal Housing Finance Agency to push Fannie Mae and Freddie Mac to purchase more manufactured housing loans under its forthcoming “duty-to-serve” rule. The “duty-to-serve” rule was mandated by the 2008 Housing and Economic Recovery Act to steer the government-sponsored enterprises to support underserved markets. In particular, that included manufactured housing, rural housing and affordable housing preservation. A final rule has never been implemented...

August 20, 2015 - Inside Mortgage Finance

Shift in Purchase-Mortgage Market Share Toward GSEs, Current Homeowners Part of a Seasonal Trend

Fannie Mae and Freddie Mac have been gaining purchase-mortgage market share from the FHA in recent months, according to the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. The shifts appear to be part of seasonal home-buying patterns rather than direct competition for mortgages with low downpayments. “From our statistics, we see...

August 20, 2015 - Inside Mortgage Finance

Correspondent Channel Showed Biggest Gain in Origination Volume During Second Quarter of 2015

All three mortgage production channels saw solid gains in originations from the first quarter to the second quarter of 2015, but correspondents had the best of it. Correspondent lenders generated an estimated $132 billion of new mortgages during the second quarter, according to a new Inside Mortgage Finance ranking and market analysis. That was up 26.9 percent from the first quarter, a few clicks faster than the overall 23.6 percent increase in production volume. The correspondent share edged...[Includes four data tables]

August 20, 2015 - IMFnews

FHFA Raises Low-Income Housing Goals on Single-Family, Multifamily

The Federal Housing Finance Agency released final housing goals for Fannie Mae and Freddie Mac for 2015 through 2017 on Wednesday. It increased both the single-family low-income purchase goals and multifamily low-income goals and established a new low-income housing subgoal for small multifamily properties.

August 20, 2015 - IMFnews

GSEs Gaining Purchase-Mortgage Market Share from FHA Seen as a Seasonal Trend

A recent shift in the purchase-mortgage market share toward the government-sponsored enterprises appears to be part of seasonal home buying patterns rather than direct competition for mortgages with low downpayments.

August 14, 2015 - Inside Mortgage Trends

Study: Mortgage Finance Ripe for Disruption

A new research paper analyzing the risks and opportunities for disruption in the housing finance system notes that new business models and services make the entire mortgage industry ripe for change. Although the paper by the Collingwood Group notes that disruption is inevitable in any industry, it said it is most predictable in an industry faced with conditions where the current model is too challenging, inefficient, costly and unresponsive to customer and business needs. “With no fundamental changes to origination processes in decades, lost efficiency, growing regulatory hurdles, high costs and low profits, there is...

August 14, 2015 - Inside Mortgage Trends

eClosing Pilot Reveals Limits of Tech, Speed Bumps

Emerging eClosing technology may make borrowers a little smarter, according to the Consumer Financial Protection Bureau, but it isn’t easy for lenders to implement. A CFPB report on the agency’s eClosing project found that borrowers who participated in the pilot scored slightly higher in a quiz on the closing process than did those who relied on good-old paper. The eClosers were...

August 14, 2015 - Inside The GSEs

Redwood Trust Now Risk Sharing With Fannie and Freddie

Redwood Trust set up a new risk-sharing agreement with Freddie Mac last month. This makes the real estate investment trust the first to execute proprietary risk-sharing arrangements with both GSEs. In the arrangement with Freddie, Redwood commits to absorb the first 1 percent of credit losses on up to $1 billion of new conforming loans it expects to deliver to Freddie over the course of the third quarter of 2015. Redwood said this is done through a special-purpose entity. The REIT entered into the risk-sharing agreement with Freddie in July and had already been in a risk-sharing transaction with Fannie since the fourth quarter of 2014. In that transaction, Redwood sold protection on the first 1 percent of losses on a $1.1 billion Fannie pool.

August 14, 2015 - Inside The GSEs

Fannie Says Homeowners Miscalculating Amount of Equity

Homeowners may be selling themselves short when it comes to the amount of equity in their homes and faulty valuation tools may be the culprit, says a new Fannie Mae analysis released last week. As many as 15 million homeowners are underestimating how much equity they’re actually sitting on, especially as house prices continued to rise over the past several years. CoreLogic estimates of the percent of homeowners having significant home equity was much higher than the percent who actually perceived themselves as having equity in Fannie consumer surveys. Many homeowners also mistakenly think a large downpayment is required to buy a home, according to data from Fannie’s National Housing Survey. This means the number of consumers...

August 14, 2015 - Inside The GSEs

Freddie Targets Small Apartment With New Risk-Transfer Program

The smaller apartment building market has become a part of Freddie’s risk-transfer program as the GSE guaranteed its first multifamily small-balance loan securitization last week. This new credit risk- transfer is composed of multifamily mortgage-backed securities by small-balance loans underwritten by Freddie and issued by a third-party trust. Freddie said the goal is to more effectively provide liquidity and service to markets that are less populated and to smaller apartment communities with between five and 50 units. Approximately 31 percent of U.S. renter households live in apartment properties this size, said the GSE. In these deals, Freddie is selling the first-loss position, which allows it to unload substantially all of the credit risk associated with the small-balance loans.

August 14, 2015 - Inside The GSEs

Fannie, Freddie Reap Rising Profits in Q2 Due to Interest Rate Hikes

Both Freddie Mac and Fannie Mae reported second-quarter earnings last week that were significantly higher than the first quarter, thanks primarily to rising interest rates. Freddie posted a net income of $4.17 billion, compared to $524 million in the first quarter. In addition to higher interest rates, the GSE attributed the increased income to a steeper yield curve and $3.1 billion in derivative gains. That gain represents a big comeback from the $2.4 billion in derivative losses in the first quarter. Fannie reported a net income of $4.64 billion, compared to $1.89 billion in the first quarter. Fannie said that number was largely driven by guaranty fee income in the second quarter.

August 14, 2015 - Inside The GSEs

GSEs' 97 LTV Product Still Lacks Any Momentum

The GSEs’ low-downpayment products designed to loosen credit availability have been slow to pick up steam. Freddie Mac introduced its 97 percent loan-to-value program in March 2015, on the heels of Fannie Mae kicking off its 97 LTV program in December 2014. The CEOs of both companies recently said that so far the volume of low-downpayment purchase loans in GSE business is relatively small. Freddie CEO Donald Layton said during last week’s earnings call, “Actually the numbers have not grown large enough to be reporting level in terms of size.” Fannie echoed that sentiment in its earnings call and said it introduced the 97 LTV product as part of its effort to create programs that make credit available on a broader basis.

August 17, 2015 - IMFnews

GSE MBS Issuance Continues to Increase, Partly Due to Seasoned Loans

A big part of Freddie’s sharp increase in issuance came from the $8.00 billion of seasoned loans the company securitized in July.

August 14, 2015 - Inside The GSEs

New NPL Auction From Freddie, Combined UPB of $1.2 Billion

Freddie Mac continues to unload seriously delinquent loans from its retained portfolio and unveiled plans late this week to auction off $1.2 billion of non-performing loans. The NPLs are currently serviced by Ocwen Loan Servicing, LLC. The planned sale marks Freddie’s sixth NPL auction of the year. The GSE is now marketing the nonperformers in five geographically diversified pools. Bids are due from qualified investors by Sept. 9. The sale is expected to settle in October. The government sponsored mortgage giant said the winning bidder “will be determined on the basis of economics, subject to meeting Freddie Mac’s internal reserve levels.” Credit Suisse Securities, Wells Fargo Securities, LLC, and First Financial Network are the advisors on the deal.

August 14, 2015 - Inside The GSEs

GSE Business Up in July, Little Change in Traits

Fannie Mae and Freddie Mac saw modest gains in issuance of single-family mortgage-backed securities during July, with little sign of any expanded underwriting by sellers The two GSEs generated $83.29 billion of single-family MBS last month, up 7.2 percent from June. Fannie managed only a 1.9 percent gain for the month, while Freddie volume surged 13.8 percent, which gave the company an unusually high 47.0 percent share of the GSE market. A big part of Freddie’s sharp increase in issuance came from the $8.00 billion of seasoned loans the company securitized in July. That was nearly double the volume of Freddie mortgages more than three months old that were securitized in June. Some $1.92 billion of those loans were modified....

August 14, 2015 - IMFnews

The NPL Auctions Keep Coming at Freddie Mac; A New One for $1.2 Billion

The cover bids on some past Freddie NPL pools have been in the mid-70s to low 80s (on the dollar) as a percentage of the unpaid principal balance.

August 14, 2015 - Inside MBS & ABS

Capital Requirements, Including Designation of ‘High Quality,’ a Major Factor for MBS Investors

The application of capital requirements to MBS and other structured finance products in the coming years will likely trump any typical collateral analysis investors currently consider, according to analysts at Standard & Poor’s. In a report published late last week, the analysts said global capital requirements have the potential to become impediments to providing financing via securitized products. “Of particular investor focus recently are...

August 14, 2015 - IMFnews

Value of REIT MBS Holdings Continues to Slip

It was the group’s lowest MBS portfolio valuation since the fourth quarter of 2011.

August 14, 2015 - Inside MBS & ABS

Value of REIT MBS Holdings Continued to Slip In 2Q15 Despite Small Gain in Non-Agency Assets

Real estate investment trusts that focus on the MBS market saw the value of their holdings slump again during the volatile second quarter of 2015. Top mortgage REITs reported a fair market value of $249.10 billion for their single-family MBS holdings as of the end of June. That was down 5.6 percent from the previous quarter, and it was the group’s lowest MBS portfolio valuation since the fourth quarter of 2011. The decline came...[Includes one data table]

August 13, 2015 - Inside Mortgage Finance

M&T Bank in Talks with the DOJ to Resolve FHA-Related Charges; PHH Mortgage Gets Offer

M&T Bank is attempting to reach a settlement with the Department of Justice to resolve an investigation into the bank’s origination of FHA loans and sales of conventional-conforming mortgages to Fannie Mae and Freddie Mac. The bank disclosed the investigation in its quarterly filings with the Securities and Exchange Commission, noting similar ongoing investigations at other financial institutions. A bank spokesman declined to comment beyond what was disclosed in the SEC filing but noted that the government agencies are conducting one investigation. On the FHA side, DOJ and the Department of Housing and Urban Development’s Office of the Inspector General are investigating...

August 13, 2015 - Inside Mortgage Finance

More Condo Lending is Flowing Through the Agencies, Strength in First Timers, Purchase

The volume of new mortgage originations for condominiums and co-operatives was up nicely at Fannie Mae, Freddie Mac and FHA during the second quarter, with particular strength among first-time homebuyers and purchase mortgages, a new analysis by Inside Mortgage Finance has found. The two government-sponsored enterprises securitized $20.69 billion of condo loans during the second quarter, a 27.4 percent increase from the first three months of the year. There was a slightly bigger gain in condo purchase-money loans (up 30.9 percent) than condo refi loans (up 24.1 percent). It was...[Includes one data table]

August 13, 2015 - Inside Mortgage Finance

Private MIs Post Big Jump in New Insurance Written But Still Lose Some Market Share to FHA in 2Q15

The private mortgage insurance industry had its best quarter since the housing market crash during the second quarter of 2015, according to a new Inside Mortgage Finance ranking and analysis. Private MIs provided insurance on $60.51 billion of new single-family mortgages during the second quarter, a strong 33.7 percent increase over the first three months of the year. It was the biggest three-month output for the industry since the first quarter of 2008. The sharp increase in purchase-mortgage lending during the second quarter helped float...[Includes three data tables]

August 13, 2015 - IMFnews

Short Takes: Neighborhood Watch Program Goes Down Without Explanation / Compass Point Repeats ‘Sell’ Rating on Walter / DeMarco Stresses Data Standardization / Houlihan Lokey Prepares IPO / Wolters Gets Ready for HMDA Changes / Carrington Hires PennyMac Executive

HUD's Neighborhood Watch system is down, but this cabinet level agency has no explanations for the press or public

August 13, 2015 - IMFnews

MIAC: First Half a ‘Buyer’s Market’ for Servicing Rights

Is the bulk MSR market in the doldrums?

August 13, 2015 - IMFnews

MIs Post Huge Jump in New Insurance Written, Best Showing Since the Crash

The sharp increase in purchase-mortgage lending during 2Q helped float the private MI boat higher.

August 12, 2015 - IMFnews

Mortgage Lenders Still Playing it Safe on Loans Sold to Fannie and Freddie

In the second quarter of 2015, 66.4 percent of loans sold to the GSEs had credit scores of 740 or higher.

August 11, 2015 - IMFnews

Five Oaks Takes Loss, Hopes to Issue Another Jumbo MBS in September

Five Oaks issued its first jumbo MBS in April and plans for another deal by the end of September.

August 10, 2015 - IMFnews

M&T in Talks With Feds Over GSE and FHA Underwriting Practices

The bank said it is cooperating with the two investigations, which could result in treble damages under The False Claims Act.

August 10, 2015 - Inside the CFPB

CFPB DT Complaint Database Has Several Deficiencies, OIG Finds

The Office of Inspector General for the CFPB has found that the bureau has moved to secure the Data Team Complaint Database, which supports the CFPB’s Consumer Response System (CRS) through which it handles consumer complaints. However, there are several control deficiencies that need to be remedied. “Overall, we found that the CFPB has taken steps to secure the DT Complaint Database in accordance with the Federal Information Security Management Act and the agency’s information security policies and procedures,” the report began. For example, the CFPB has deployed network-level firewalls and intrusion detection systems for the DT Complaint Database. “However, we identified several control deficiencies related to configuration management, access control, and audit logging and review,” the report added. “Specifically, ...

August 7, 2015 - Inside FHA/VA Lending

Ginnie Tightens Servicing Transfer Policy as Reporting Issues Arise

A growing number of issuers are engaging in servicing transfers prematurely or making changes to their servicing platforms, causing problems for Ginnie Mae’s monthly pool-level and loan-level reporting. A Ginnie Mae issuer “transfers servicing” when it shifts in-house servicing to a subservicer, moves servicing from one subservicer to another, or relocates servicing in-house. Effective servicing as well as accurate and timely reporting are critical to Ginnie’s mortgage-backed securities program, the company said in recently issued guidance on servicing transfers. The new policy guidance would ensure that issuers have the capacity and oversight controls at all times to meet their obligations under the Ginnie Mae MBS program. Currently, issuers are required to obtain Ginnie’s approval before engaging in any servicing transfer with a subservicer or from one subservicer to another. Effective immediately, any issuer that wishes to ...

August 7, 2015 - Inside FHA/VA Lending

DOJ, NY Bank Seek to End Probe of FHA Loan Sale to Fannie, Freddie

M&T Bank is in talks with the federal government to resolve an investigation of a pre-crisis sale of FHA-insured and conforming mortgages to Fannie Mae and Freddie Mac that resulted in losses for the government-sponsored enterprises. The New York-based bank disclosed the settlement discussion in a second-quarter filing with the Securities and Exchange Commission and is cooperating with the investigation. The Department of Justice and the Department of Housing and Urban Development’s Inspector General are investigating whether M&T Bank complied with FHA’s underwriting guidelines as well as with guidelines for selling loans to Fannie and Freddie. It is unclear how much the FHA paid out in loss claims in this case but investigators said that, based upon their review of a sample of FHA loans for which a claim was paid, “some of the loans do not meet underwriting guidelines.” M&T Bank could be ...

August 7, 2015 - Inside FHA/VA Lending

VA Securitization in Ginnie MBS Increases in 2Q but Not Like FHA

Sellers saw a modest increase in VA loans delivered to Ginnie Mae in the second quarter of 2015, most of which were streamline refinance loans, but FHA definitely took the cake, according to an Inside FHA/VA Lending analysis of agency data. Approximately $39.1 billion in VA purchase and refi loans were placed in Ginnie Mae pools in the second quarter, up 11.8 percent from the prior quarter. Of that amount, $20.9 billion were VA refinances, up 2.1 percent from the first quarter. Some 52 percent of the VA refis were originated in-house while correspondents accounted for 30.7 percent. Brokers brought in 17.3 percent of the securitized VA refi loans. VA purchase loans underlie an estimated $18.2 billion in Ginnie mortgage-backed securities in the second quarter, 48.4 percent of them retail. That number was up 25.5 percent from the previous quarter. VA loan correspondents were busy as well, accounting for ... [ 2 charts ]

August 7, 2015 - Inside MBS & ABS

New Multifamily Small Balance Loan Securitization Program Helps Freddie Finance Small Apartments

Freddie Mac guaranteed its first multifamily small balance loan securitization this week as part of its effort to better serve less populated markets and smaller apartment communities. The government-sponsored enterprise plans to guarantee approximately $108 million in this first series of SB Certificates. This is a new credit risk transfer comprised of multifamily MBS backed by small balance loans underwritten by Freddie and issued by a third-party trust. In these SB deals, Freddie is ...

August 7, 2015 - Inside MBS & ABS

Freddie and Fannie Continue to Reduce Mortgage Portfolios; Profits Up Sharply in Second Quarter

Fannie Mae and Freddie Mac reduced their retained mortgage portfolios by a combined $44.4 billion during the second quarter, a period during which the government-sponsored enterprises posted substantial increases in net earnings. Freddie Mac’s non-agency MBS holdings declined 11.6 percent, while its un-securitized whole-loan portfolio dropped 3.0 percent. The GSE sold $3.3 billion of non-agency MBS and securitized $2.1 billion of single-family ... [Includes one data chart]

August 7, 2015 - Inside MBS & ABS

Strong Execution for Freddie’s Non-Agency-MBS-Like Transaction, More Non-TBA Deals Expected from GSEs

Freddie Mac’s first Whole Loan Securities deal was met with strong demand from investors, according to industry analysts. The transaction differed in a number of ways from the risk-sharing deals the government-sponsored enterprises have issued, as its structure was more like a non-agency MBS. The $300.27 million WLS 2015-SC01 included senior tranches with a total balance of $278 million and credit enhancement of 7.50 percent. Investors could purchase the senior ...

August 7, 2015 - Inside MBS & ABS

Ginnie Sets a Monthly Issuance Record in July, Pulls a Rare Coup in Agency MBS Market

It doesn’t happen often in the agency MBS market, but Ginnie Mae last month took the yellow jersey away from Fannie Mae. Ginnie issued a record $45.54 billion of single-family MBS in July, the agency’s biggest monthly output ever. That was a 12.6 percent increase from June, and nudged past Ginnie’s previous biggest month, July 2009, when its issuers pumped out $44.84 billion of single-family MBS. And it beat Fannie’s $44.14 billion of ... [Includes two data charts]


During the first half of 2015 all residential lenders originated a better-than-expected $805 billion of home mortgages, according to Inside Mortgage Finance. What do you expect in the second half?

Just as good. We like what we’re seeing.
Better. Applications are strong.
Worse. We’re worried about rates, seasonality.
A lot worse. The fourth quarter could be a killer.

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