Agency MBS

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

November 26, 2014 - Inside The GSEs

Fannie, Freddie MBS Activity Drops Month-to-Month in October

Together, Fannie Mae and Freddie Mac in October posted a combined decline in the volume of single-family mortgages securitized, according to a new Inside The GSEs analysis. Fannie and Freddie issued $63.1 billion in single-family mortgage-backed securities in October, a 1.5 percent decrease from September. On a year-to-date basis, October’s MBS issuance dropped an even steeper 50.6 percent.

November 26, 2014 - Inside The GSEs

Enterprise Endnotes

Fannie, Freddie Conforming Loan Limits Mostly Unchanged for 2015. The Federal Housing Finance Agency this week said that conforming loan limits for Fannie Mae and Freddie Mac in 2015 would remain at current levels in most markets. For much of the country, the conforming loan limit for one-unit properties will remain at $417,000. The loan limits are established under the terms of the Housing and Economic Recovery Act of 2008 and are calculated each year.

November 26, 2014 - Inside The GSEs

Fannie Prices Its Fourth CAS Deal Of 2014; Backed by $53.8B UPB

Fannie Mae has priced its final risk-sharing transaction of the year, a nearly $1.5 billion offering that priced wider than previous deals, the GSE announced last week. The $1.49 billion note is the GSE’s fourth transaction under its Connecticut Avenue Securities series of 2014. Last year, the Federal Housing Finance Agency ordered both Fannie Mae and Freddie Mac to shrink the GSEs’ role in the U.S. housing market.

November 26, 2014 - Inside The GSEs

FHFA: CSP Moving Forward, Senators Seek More Transparency

Fannie Mae and Freddie Mac are testing parts of the new common securitization platform and are expected to have the system largely built in 2015. But the GSEs have a lot of work to do building interfaces for their systems to work with the new platform while the joint venture that’s running the CSP won’t be functional for several years, according to two recent Federal Housing Finance Agency reports.

November 26, 2014 - Inside Mortgage Trends

$50 Billion of Servicing Deals Before Yearend?

With just over four weeks left in 2014, investment bankers expect a flurry of bulk deals to hit the market. But whether they close or not is a different matter. “There are definitely several deals – both large and small – that are being considered,” said Tom Piercy, managing member of Interactive Mortgage Advisors. “We are working on four or five deals totaling $10 billion.” Piercy said he wasn’t at liberty to provide details about the transactions since some have yet to be finalized. In two recently announced auctions, IMA is selling a $3.2 billion package of Fannie Mae/Freddie Mac mortgage servicing rights and a $1.6 billion pool. The brokerage firm also is in the process of selling a New York-based mortgage ...

November 26, 2014 - Inside Mortgage Trends

Mortgage Execs Concerned About G-Fee Increase

The majority of mortgage industry executives believe a proposal to raise Fannie Mae and Freddie Mac guaranty fees will hurt lenders, raise origination costs and lead to fewer loans being made, according to a survey by Genworth U.S. Mortgage Insurance. “The survey findings were in line with expectations and highlight the need for continued dialog on regulatory reform and credit access,” said Rohit Gupta, president/CEO of the company. An estimated 53 percent of executives believe raising the g-fees would result in fewer loans being closed. And 23 percent of executives said higher fees for the government-sponsored enterprises would increase demand for FHA loans. While 13 percent said an increase would limit industry competition, 11 percent said it would stoke competition. ...

November 26, 2014 - Inside Mortgage Trends

G-Fee Terrain Leveled Dramatically in 2013

Fannie Mae and Freddie Mac guarantee fee pricing disparities were dramatically leveled out in 2013, according to data released by the Federal Housing Finance Agency. In 2010 and 2011, small lenders typically paid about 10 basis points more in g-fees to the government-sponsored enterprises than did the five largest lenders in the market, the report shows. In 2012, the disparity fell to about 6 bps. Last year, it was down to 2 bps. Small lenders – defined as those that ranked outside the top 100 GSE sellers – paid an average of 53 bps, while the top five sellers paid 51 bps. Three more lender groups based on size that fell between the two extremes paid average fees of 51 or 52 bps....

November 26, 2014 - Inside The GSEs

New Fannie, Freddie Rep & Warrant Framework Favorably Received

Both Fannie Mae and Freddie Mac, at the direction of the Federal Housing Finance Agency, last week rolled out changes to their selling representation-and-warranty frameworks in an effort to reduce lenders’ concerns about when they might be asked to repurchase a loan. The GSEs noted that some lenders were concerned about repurchase risk and other market factors causing an increase in credit overlays, which has limited access to credit for potential creditworthy borrowers.

November 26, 2014 - Inside The GSEs

FHFA Tweaks REO Policy to Allow ‘Qualified’ Foreclosure Repurchase

The Federal Housing Finance Agency this week unveiled a policy alteration that would potentially allow a foreclosed homeowner to purchase a home – including one he/she lost due to arrears – from the real estate owned inventory of Fannie Mae or Freddie Mac. The change will permit Fannie and Freddie to sell existing REO properties to any qualified purchaser at the property’s fair-market value, as determined by the GSE, according to the FHFA.

November 26, 2014 - Inside The GSEs

FHFA: Final G-Fee Decision Due 1Q15, 2013 Hikes Unevenly Spread

As the Federal Housing Finance Agency prepares a new guaranty fee framework to unveil in early 2015, a report issued by the FHFA last week noted that big g-fee increases in 2013 were not spread evenly across the market. According to the FHFA’s sixth annual study, average mortgage-backed security g-fees charged by Fannie Mae and Freddie Mac jumped from 36 basis points in 2012 to 51 bps last year.

November 26, 2014 - Inside The GSEs

Calls to End GSE Conservatorships Mount From Different Sources

The Obama administration noted this week that it is less than keen on the idea of taking up an outgoing Democrat senator’s call to end the six-plus year conservatorships of Fannie Mae and Freddie Mac. Last week, Senate Banking, Housing and Urban Affairs Committee Chairman Tim Johnson, D-SD, suggested the GSEs’ conservatorship be ended if legislative reform is not forthcoming.

November 26, 2014 - Inside MBS & ABS

A Handful of Critical Impediments Block Return To Healthy U.S. RMBS Market, Sector Experts Say

The most significant blockages to the return of a healthy and sustainable non-agency residential MBS market in the United States are low volume issuance, regulation, weak AAA demand and missing structural reforms, according to top market professionals. “What’s holding back the recovery?” asked Rui Pereira, managing director at Fitch Ratings, during a panel discussion at a residential MBS reform symposium sponsored by the Structured Finance Industry Group and Information Management Network in New York City earlier this month. “Other sectors have rebounded and we’re starting to see new asset classes emerge. And yet, we’re seeing very little momentum in our market. So the question is, what’s stalling the RMBS recovery?” In the run-up to the discussion, Pereira polled...

November 26, 2014 - Inside MBS & ABS

FHFA: Extensive ‘Testing’ Underway at GSE Common Securitization Platform, An ‘Important Priority’ in 2015

The development of a common securitization platform for Fannie Mae and Freddie Mac and the progression of a single government-sponsored enterprise security remains an “important priority” for the Federal Housing Finance Agency over the next year, according to the FHFA. The GSE conservator noted in its “2014 Performance and Accountability Report” and the FHFA’s revised “Strategic Plan: Fiscal Years 2015-2019,” both issued last week, that the project is proceeding with deliberate speed. “Most of the software needed for the platform’s core functionality has been put...

November 26, 2014 - Inside Mortgage Finance

GSE Loan Limits Mostly Unchanged for 2015

The Federal Housing Finance Agency this week said that conforming loan limits for Fannie Mae and Freddie Mac in 2015 would remain at current levels in most markets. Some 46 counties will get...

November 26, 2014 - Inside Mortgage Finance

Lenders Satisfied So Far With Fannie, Freddie Reps- And-Warrant Relief But More Clarifications Expected

Industry groups say they are generally pleased with last week’s more detailed update to Fannie Mae’s and Freddie Mac’s representation-and-warranty framework, but lenders remain expectant of additional details from the Federal Housing Finance Agency going forward. The new rules, retroactive to January 2013, provide that lenders might not be required to repurchase loans that contain data inaccuracies or misrepresentations of buyers’ qualifications, unless those inaccuracies and misrepresentations are “significant” or appear in multiple loans. The clarifications of life-of-loan exclusions announced by the government-sponsored enterprises are designed...

November 26, 2014 - Inside Mortgage Finance

Correspondent Channel Saw Biggest Origination Volume Gains During Third Quarter of 2014

All three mortgage-production channels generated solid increases in new origination volume during the third quarter of 2014, but the correspondent market had a measurably bigger gain, according to a new Inside Mortgage Finance ranking and analysis. An estimated $105 billion of home loans were produced by correspondent originators during the third quarter, up 14.1 percent from the previous quarter. That lifted the correspondent share of new originations to 30.4 percent for the, and 30.3 percent on a year-to-date basis. Correspondents are...[Includes four data charts]

November 26, 2014 - IMFnews

Short Takes: How Much Will RBS Pay the GSEs? / Citizens in the Hunt for LOs / Did Anyone Think the FHFA Was Going to Lower Loan Limits? / When in Rome…

But did anyone really think the FHFA was going to reduce the GSE loan limits? Really…

November 26, 2014 - IMFnews

Under FHFA Policy Change, ‘Qualified’ Foreclosed Homeowners Can Repurchase Their Homes

Prior to FHFA’s new directive, Fannie and Freddie required homeowners who have been through foreclosure and want to buy their home back to pay the entire amount owed on the mortgage.

November 25, 2014 - IMFnews

Short Takes: So, Where’s the Housing Bubble? / Altisource Buys / A $1 Billion Quarter for FGMC / Delinquencies at Freddie Continue to Fall

What exactly is Launched in 1996, it’s supposedly the largest directory of homes for sale by owners. In other words, they don’t use traditional Realtors…

November 25, 2014 - IMFnews

GSE Loan Limits Mostly the Same Next Year, but Higher in 46 Counties

An unspecified number of counties would have been assigned lower loan limits, based on house price trends, but the FHFA weighed “other factors” and left them unchanged.

November 24, 2014 - Inside the CFPB

Bureau Warns Mortgage Lenders Against SSDI Discrimination

The CFPB put out a bulletin last week advising lenders not to create illegal hurdles for recipients of Social Security Disability Income who apply for mortgages, warning that requiring unnecessary documentation from such consumers could raise fair lending risk. The new bulletin discusses standards and guidelines on verification of SSDI, including those under the CFPB’s ability-to-repay rule, the Department of Housing and Urban Development’s standards for FHA loans, the Department of Veterans Affairs’ standards for VA-guaranteed loans, and guidelines from Fannie Mae and Freddie Mac. The bureau begins by noting that to verify income for qualified mortgage debt-to-income ratios under the ability-to-repay rule, lenders are required to look at whether the Social Security Administration benefit verification letter or equivalent document ...

November 25, 2014 - IMFnews

Correspondent Channel Posted Biggest Origination Gain of the Quarter

Wells Fargo reported a 2.1 percent drop in its correspondent originations from the second quarter to the third, and its year-to-date volume was down 57.3 percent.

November 24, 2014 - IMFnews

Short Takes: No More Thanksgiving Rally for GSE Shares / Sterne Agee Sees Little Optimism in ASPS / Mortgage Network Expands / RBS Kisses Mortgage Trading Desk Goodbye

Regarding Altisource Portfolio Solutions, Sterne Agee noted: “It is difficult to be optimistic from here"...

November 24, 2014 - IMFnews

IMA, MountainView Out with Large MSR Packages

The Prestwick Group and MIAC are also working on servicing deals.

November 21, 2014 - Inside FHA Lending

Around the Industry

Essent EVP to Retire in March. Adolfo Marzol, Essent Guaranty’s executive vice president, will step down, effective March 31, 2015, after five years with the company. VA Hybrid Adjustable-Rate Mortgage Pooling Eligibility. The Department of Veterans Affairs recently expanded the type of loans it will guarantee to include 7/1 and 10/1 hybrid ARMs. While Ginnie Mae’s Mortgage-Backed Securities Guide does not bar the inclusion of hybrid ARMs in Ginnie MBS, GinnieNET is not currently able to process these loans for pool processing. GinnieNET is being updated in order to accommodate VA 7/1 and 10/1 hybrid ARM pooling. Effective with issuances dated on or after Dec. 1, 2014, VA 7/1 and 10/1 hybrid ARMs will be eligible for pooling. CFPB Publishes Revised List of Rural and Underserved Counties. The Consumer Financial Protection Bureau has published its 2015 list of ...

November 21, 2014 - Inside FHA Lending

FNMA Accepts Guaranteed Rural Housing Loans

Fannie Mae has begun purchasing rural housing loans with a Department of Agriculture/Rural Development guarantee. The government-sponsored enterprise accepted delivery of Section 502 (RD-502) loans from USDA-approved lenders on Nov. 3 – an open challenge to Ginnie Mae, which has dominated the market. The loans were delivered as standard products with no variance required. Other government-backed loans such as FHA and VA continue to require a negotiated variance. The Section 502 single-family guaranteed housing loan program provides financing to low- to moderate-income rural homebuyers. A community is eligible for 30-year fixed-rate RD-502 loans if it is located in an area that meets the USDA’s definition of “rural.” The Farm Bill, signed into law in February of this year, defines “rural” as any area outside of city limits with a ...

November 21, 2014 - Inside FHA Lending

GNMA Eyes Stronger Oversight of Nonbank Issuers

Ginnie Mae is seeking comment on several proposed data collections, including those that would strengthen the agency’s ability to monitor participants in its mortgage-backed securities programs. Due to its growing concern over the influx of non-depository issuers into the single-family MBS program, Ginnie has proposed to collect more loan-level data to supplement the information already being collected and reported on a monthly basis. The proposed data collection consists of bankruptcy-related information (action type, case identifier, chapter type, bar date) as well as borrower-related information (borrower bankruptcy indicator, classification type, total mortgaged properties, counseling initiated indicator and credit score date). Other proposed new data include document custodian ID, type of insurance claim coverage, investor unpaid principal balance (UPB), adjustment to ...

November 21, 2014 - Inside FHA Lending

Congress Urged to Extend Expiring VA Loan Limits

Thousands of military veterans in high-cost areas may be deprived of VA’s home-loan guarantee benefits unless Congress extends the current VA loan limits before the end of the year. Those loan limits expire on Dec. 31, 2014. The VA loan limits are based on median home values estimated by the FHA, providing loans up to 125 percent of local area median price. The program does not set a cap on how much a veteran can borrow to finance a home purchase but it does limit the maximum amount it can guarantee to 25 percent of the current loan limit. Veteran and industry groups are urging Congress to make the VA limits permanent. A VA spokesperson said the agency was not asked for a position on the issue since Congress did not put forward any bill in any of the hearings this year. “But as a general rule, VA wants to maximize the opportunities ...

November 21, 2014 - Inside FHA Lending

HECM Portfolio Down to Negative in FY 2014

The economic value of the FHA’s Home Equity Conversion Mortgage legacy portfolio fell to negative $0.9 billion in fiscal 2014 due mainly to volatility in long-term house prices and interest rates, according to the latest independent actuarial report on the health of the Mutual Mortgage Insurance Fund. The latest result was a significant improvement from FY 2012, when the fund stood at negative $2.8 billion. In fiscal 2013, the HECM portfolio’s economic value of positive $6.5 billion appeared to be a whopping change from the previous year but that amount reflected a $4.6 billion cash infusion from the forward program and from the $1.7 billion mandatory appropriation, the report clarified. The report also showed a corresponding decline in the HECM capital ratio to negative 1.20 percent. Actuarial projections for fiscal 2015 place the HECM portfolio’s economic value at negative $1.1 billion. The fund’s capital resources for ...

November 21, 2014 - IMFnews

What We’re Hearing: Higher FHA Costs, Not Lower / The GOP in Favor of This Tax Hike? / How About Regulating Nonbank Lenders? / Cyprus? Wilbur Ross Really is a Bottom Fisher / Ocwen Isn’t the Only Servicer That Loves India

There’s a growing fear that the CSBS might move to increase capital standards for nonbank originators as well.

November 21, 2014 - Inside MBS & ABS

MBS Pioneer Ranieri Active in the Single-Family Rental Space, But With a Twist; Can an MBS Deal Be at Hand?

Home Partners of America, a single-family rental company affiliated with MBS veteran Lewis Ranieri, has been quietly gobbling up homes across the U.S., and may have its eye on tapping the securitization market. “They are very active,” said one associate close to Ranieri, who spoke under the condition his name not be used. Moreover, Home Partners – formerly known as Hyperion Homes LLC – recently received...

November 21, 2014 - Inside MBS & ABS

Three Smaller Firms Set to Participate in NY Fed’s Pilot Program for Agency MBS Sales

The Federal Reserve Bank of New York announced this week that it selected three firms to participate in a pilot project to expand agency MBS sellers beyond the large primary dealers that work with the NY Fed. The pilot will last for about one year and the firms will participate as counterparties on the Open Market Trading Desk along with primary dealers in the Desk’s agency MBS operations. Brean Capital, Loop Capital Markets and Mischler Financial Group were selected to participate in the Mortgage Operations Counterparty Pilot Program, which was announced in August. The NY Fed didn’t disclose the number of firms that applied for the pilot but noted that the intent was always to work with a small number of firms to speed the pilot and keep costs low for the NY Fed. The pilot program participants are set...

November 21, 2014 - Inside MBS & ABS

Watt: GSE G-Fees Not ‘Most Important Factor’ to Bring Back Private Capital; CSP, Single Security Progresses

The head of the Federal Housing Finance Agency told Senate Banking, Housing and Urban Affairs Committee members this week that a decision on Fannie Mae and Freddie Mac guaranty fees will come soon after the New Year. In his first oversight hearing since taking the reins of the agency in January, FHFA Director Mel Watt stated during questioning that the regulator of the government-sponsored enterprises will make its move on g-fees during the first quarter of 2015. In one of his first acts as FHFA director, Watt postponed...

November 21, 2014 - Inside MBS & ABS

GSE Guaranty Fee Hikes in 2013 Hit Purchase Business, Marginal Credit Borrowers Harder

Average MBS guaranty fees charged by Fannie Mae and Freddie Mac jumped from 36 basis points in 2012 to 51 bps last year, according to an annual study by the Federal Housing Finance Agency that was released late this week. But the impact of the fee hikes was not spread uniformly across the government-sponsored enterprises’ business. The report shows that the estimated average g-fee on purchase mortgages climbed from 40 bps in 2012 to 55 bps last year. The average fee for refinances rose slightly less, by 14 bps, for both rate-term deals (48 bps in 2013) and cash-out refinances (53 bps last year). According to the FHFA study sample, the purchase business rose...

November 21, 2014 - Inside MBS & ABS

Banks Report Modest Increase in MBS Holdings During 3Q14, Biggest Jump in Non-Agency MBS

Banks and thrifts held a combined $1.535 trillion of residential MBS at the end of September, a modest 0.6 percent increase from the previous quarter, according to a new Inside MBS & ABS analysis of bank call reports. Bank MBS holdings had spiked higher in the first quarter of this year, only to fall back in the following period. Compared to a year ago, the industry’s aggregate MBS portfolio was up 1.4 percent. Bank and thrift MBS holdings first crossed...[Includes two data charts]

November 21, 2014 - IMFnews

Risk-Based Pricing Continues: Lower FICO Score Borrowers Saw Bigger Hikes in G-Fees

The increase in g-fees last year made all three loan-purpose categories more profitable.

November 21, 2014 - IMFnews

Banks Post Modest Gain in MBS Holdings, Non-Agency Growth Leads

The biggest gain in bank MBS investment during the third quarter was in non-agency securities.

November 20, 2014 - Inside Mortgage Finance

Sen. Johnson Calls for End of Conservatorships, Dems Push Watt Hard on GSE Principal Reduction

The outgoing chairman of the Senate Banking, Housing and Urban Affairs Committee this week urged the head of the Federal Housing Finance Agency to look to a final resolution of Fannie Mae and Freddie Mac, while the progressives on the panel pressed the regulator and former Democrat congressman hard to approve principal reductions. “Everyone agrees that conservatorship cannot continue forever, so I hope my colleagues will keep working towards a more certain future for the housing market,” said Sen. Tim Johnson, D-SD, during a hearing with FHFA Director Mel Watt this week. But if “Congress cannot agree on a smooth, more certain path forward I urge you, Director Watt, to engage the Treasury Department in talks to end the conservatorship.” Watt did not address...

November 20, 2014 - Inside Mortgage Finance

All Cylinders Firing in 3Q14, As Surge in Conventional- Conforming Market Led Increase in Total Originations

Mortgage originations increased in all the major product categories during the third quarter of 2014, although new adjustable-rate mortgage lending was down slightly. A new Inside Mortgage Finance analysis shows that conventional-conforming originations increased by 11.7 percent from the second quarter to the third. That was slightly faster than the 10.2 percent increase in jumbo production and the 10.1 percent rise in government-insured lending. The home-equity market showed...[Includes two data charts]

November 20, 2014 - IMFnews

Short Takes: Stop Guessing on Lawsky Already / Share Price of Fannie and Freddie Common Soars / Foreclosures on the Rise / Essent Sells More Stock

A GSE bill? Since Congress and President Obama have such a strong track record of working together on legislation we know how that’s going to turn out…

November 20, 2014 - IMFnews

Fannie and Freddie Make it Official on R&W Relief but with Several ‘Exclusions’

In regard to misrepresentations, relief will not be offered if it can be proved that a borrower was misled by the originator. And, of course, any mortgage subject to fraud must be bought back.

November 20, 2014 - IMFnews

FHFA’s Watt: Fewer Than 100 Companies Affected by FHLB Membership Changes

Several weeks back, a FHFA official told IMFnews that just 18 members would be affected by the captive rule, mostly REITs.

November 19, 2014 - IMFnews

Short Takes: Any G-Fee News? No / Keeping an Eye on MSR Sales / Why Realtors Will Live Forever / California Home Sales Nothing Special / Jeb Will be Back, Hensarling At Least

After a servicing sale closes, the GSEs must monitor each transaction to make sure the transfer of receivables took place in a timely manner and more…

November 19, 2014 - IMFnews

MIAC Auctioning Off $908 Million Fannie/Freddie Portfolio

With roughly six weeks left in 2014, some mortgage firms are rushing to sell MSRs as a way to bolster fourth quarter profits.

November 19, 2014 - IMFnews

CFPB Warns Mortgage Firms on How they Treat Borrowers with Disability Income

The new bulletin discusses standards and guidelines on verification of disability income, including those under the CFPB’s ability-to-repay rule.

November 19, 2014 - IMFnews

Senate Banking Chair Urges Watt and Treasury to End GSE Conservatorships

The two GSEs have been in conservatorship for six-plus years now, with no legislative solution to their future in sight.

November 18, 2014 - IMFnews

Short Takes: Obama Won’t Give Up on Killing the GSEs / Redwood Sells Debt / More Ocwen Customer Complaints / Carrington Bolts ARMs / The Return of Mike Baldwin

Republicans have never been big fans of the GSEs and there’s plenty of Democrats who aren’t so sure about the government “guaranty” as well...

November 18, 2014 - IMFnews

FHFA: Extensive ‘Testing’ Underway at Common Securitization Platform

In 2015, the team at the GSE common securitization platform will focus on implementation of the remaining software components...

November 18, 2014 - IMFnews

Fannie Continues to Loosen Rules; 990 Days for a Foreclosure in New York

Fannie Mae recently loosened its credit standards on condominium loans. What's next?

November 17, 2014 - IMFnews

Short Takes: Former FHFA Chief Blasts Mortgage Industry / Who’s Behind the HIC? / More Relief From FHA / Ocwen’s Stock Recovers Slightly / Venable Hires Ex-Hensarling Staffer

So, which groups are behind the "housing-industrial complex"? DeMarco isn't naming names...


What is it going to take to convince lenders to loosen the credit box (i.e., remove underwriting overlays)?

The recent rep and warranty changes announced by the Federal Housing Finance Agency should go a long way in protecting lenders from future buybacks and help expand mortgage credit.


There won’t be any significant elimination of underwriting overlays until the government stops seeking huge mortgage-related penalties and settlements from lenders.


There shouldn’t be any expansion of the mortgage credit box since looser underwriting is what caused the recent mortgage crisis.


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