Agency MBS

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

February 26, 2015 - Inside Mortgage Finance

Even After Taking Its Foot Off the Gas, Wells Remains Dominant in Market Share, Sees Room for Growth

Only one lender accounted for more than 10 percent of the single-family mortgage volume completed by Fannie Mae and Freddie Mac in 2014: Wells Fargo. The bank also dominates deliveries to Ginnie Mae and originations of jumbo mortgages. Wells had $180.89 billion in mortgage originations in 2014, accounting for 14.6 percent of total mortgage originations, according to Inside Mortgage Finance. The bank’s share of mortgage originations declined from 18.9 percent in 2013 as refinance activity slowed and nonbanks made efforts to compete for production and servicing. Officials at Wells said...

February 26, 2015 - Inside Mortgage Finance

Appraisals and Property Issues Accounting For Larger Share of Mortgage-Closing Delays

Property characteristics and appraisals have accounted for an increasing share of the issues that delay closing of purchase mortgages, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. Real estate agents participating in the survey cited property issues as causing 22.5 percent of closing delays in January, based on a three-month moving average. That’s up from a 16.5 percent share as recently as October. The increase appears...

February 26, 2015 - Inside Mortgage Finance

Guaranty Fee Income Keeps Growing at Fannie And Freddie, Buyback Volume Eased in 4Q14

Falling interest rates tripped up Fannie Mae and Freddie Mac during the fourth quarter, indirectly leading to sharp declines in profitability despite continuing gains in their key mortgage-backed securities guaranty fee operations. Together, the two government-sponsored enterprises earned $1.54 billion in net income during the fourth quarter of 2014, down 74.3 percent from the previous quarter. With their retained portfolios in shrinkage mode, net interest income was down 11.9 percent from 2013. The big factor was...

February 26, 2015 - Inside Mortgage Finance

Suddenly, Ocwen is Popular Among Investment Bankers That Want to Help With Its ‘Managed’ Liquidation

Ocwen Financial – once deemed the fastest-growing residential servicer in the nation – is now facing huge shrinkage and is undergoing what some analysts and investment bankers are now calling a managed or “controlled” liquidation. The questions facing investors and business partners of the company is how fast can Ocwen shrink and what will be left for shareholders other than a pile of cash. “This could be...

February 26, 2015 - IMFnews

Nationstar’s Profit Drops 82 Percent, Originations Fall; However, $35B of MSR Deals Revealed

The fourth quarter was Nationstar’s worst production quarter of the year.

February 24, 2015 - IMFnews

Yellen Committed to Letting MBS Run Off the Fed’s Balance Sheet

Fed chief Janet Yellen also signaled a continuation of the status quo for interest rates...

February 23, 2015 - IMFnews

Short Takes: A Nice Bump for Ocwen’s Share Price / Will Ocwen Unload Non-Agency MSRs Too? / CashCall’s Non-QM Loan / Fidelity Grows Revenues 21 Percent

In case you’re wondering, Ocwen services roughly $208 billion of non-agency product.

February 23, 2015 - IMFnews

Nationstar Agrees to Buy Almost $10B of MSRs From Ocwen; More Deals Ahead?

The sale and transfer must first be approved by Freddie and its regulator, the Federal Housing Finance Agency.

February 20, 2015 - IMFnews

Ocwen Agrees to Sell $9.8 Billion of MSRs to Nationstar; ‘New Rez’ Will Buy HLSS

New Residential will pay roughly $18.25 a share for HLSS, valuing the deal at $1.3 billion.

February 20, 2015 - Inside FHA Lending

Ginnie Mae Servicing Up Slightly in 4Q, 2014

Ginnie Mae servicing volume gained a mere percentage point in the fourth quarter of 2014 from the previous quarter, capping a productive year for servicers of government-backed mortgages, according to Inside FHA Lending’s analysis of agency data. Servicing volume rose by only 1.0 percent to $1.5 trillion during the last three months of 2014 from $1.4 trillion in unpaid principal balance in the first quarter, and increased 4.0 percent year over year. Four out of the top five Ginnie Mae servicers were banks, of which three experienced declines in their servicing portfolios on quarterly and year-over-year bases. The leader of the pack, Wells Fargo, closed out the year with $416.0 billion in Ginnie Mae servicing and capturing 27.8 percent of the market. Its servicing portfolio fell ... [ 1 chart ]

February 20, 2015 - Inside FHA Lending

VA to Issue Final ‘Qualified Mortgage’ Rule in May

The Department of Veterans Affairs expects to have a finalized Qualified Mortgage (QM) rule by May to help clear up some issues that have arisen since the agency issued an interim final rule last spring. The VA issued the interim QM rule for comment on May 9, 2014, to define which VA loans will have QM status under the ability-to-repay (ATR) rule. Issued by the Consumer Financial Protection Bureau, the ATR rule provided temporary QM status to loans eligible for FHA insurance and guaranties by the VA and the Department of Agriculture’s Rural Housing Service. Eligible government-backed loans must be 30-year fixed-rate with no interest-only, negative amortization or balloon features. Total points and fees must not exceed 3 percent of the total loan amount for loans of $100,000 or more. Loans that meet the definition of a temporary VA-eligible QM are considered as in compliance with the ATR rule. They are designated as “safe harbor QMs,” provided they are not ...

February 20, 2015 - Inside FHA Lending

Lenders Urged to Study Changes in New Handbook

FHA lenders should spend the next couple of months familiarizing their staff with the requirements in the FHA’s new Single Family Housing Policy Handbook to ensure proper implementation of the changes on June 15, 2015, according to compliance experts. The impending changes in the Single Family Handbook are complex and significant. Lenders will need proper legal guidance to navigate and understand hundreds of pages of consolidated housing policies and guidance, as well as substantive changes to FHA requirements, said K&L Gates experts in a recent analysis. The handbook is a consolidated, authoritative source of single-family housing policy and is meant as a one-stop resource for FHA lenders. It gathers and streamlines all FHA requirements, which are currently spread throughout various handbooks, mortgagee letters and other documents, making it easier for lenders to ...

February 20, 2015 - Inside FHA Lending

Tech Issues Delay HECM Financial Analysis Rule

The FHA has delayed the effective date of new guidance that will require reverse mortgage lenders to perform a financial assessment of applicants for a Home Equity Conversion Mortgage. The FHA indicated that the change was necessary to allow vendors and the Department of Housing and Urban Development to align their respective software before the new system can be operational. Those familiar with the technology said delivering the required system enhancements should not take long. The FHA said a new effective date should be expected within 30 to 60 days of the original March 2 effective date. It will be announced in a new mortgagee letter, the agency added. The new guidance requires lenders to evaluate HECM borrowers’ willingness and capacity to meet their obligations and to comply with program requirements. “Financial assessment” means doing a much more ...

February 20, 2015 - Inside FHA Lending

VA Lending Up in 4Q, Year Over Year

VA loan volume continued to rise in the fourth quarter of 2014, driven by low interest rates and a strong demand for the lower downpayment loans, according to an Inside FHA Lending analysis of Ginnie Mae/VA data. The volume of VA loans securitized in Ginnie Mae mortgage-backed securities rose 4.0 percent in the fourth quarter to $107.8 billion from the previous quarter, with more than half of the loans coming through the retail channel. Retailers accounted for $51.5 billion in VA loans securitized during the quarter while correspondents and brokers accounted for $44.4 billion and $11.9 billion, respectively. The overall average FICO score for VA loans was 707, with average loan-to-value and debt-to-income ratios of 95.0 percent and 38.2 percent, respectively, during the quarter. Correspondents came up big with VA purchase loans, accounting for $31.7 billion of the $65.1 billion in total purchase loans produced during the fourth quarter. Retail loan officers accounted for $28.5 billion while brokers brought in ... [ 1 chart ]

February 20, 2015 - IMFnews

What We’re Hearing: A GSE ‘Flying Naked’? / When Hedging Losses Turn Into Gains / 2018 is Year Zero / The C&I Conundrum / IBM’s Seterus Up to Something? / Former First Mariner Mortgage Chief Wins ‘Non-Compete’ Case

In 2018, the GSE capital buffer falls to zero dollars. Zilch. Nada. Hopefully by then, President Bush or President Clinton will have worked out a GSE reform deal with Congress…

February 20, 2015 - IMFnews

Fannie Posts Much Lower Earnings; CEO Says Lack of Capital Cushion Increases Likelihood of a Treasury Draw

When it comes to capital cushions, 2018 is "Year Zero" for Fannie Mae and Freddie Mac.

February 20, 2015 - Inside MBS & ABS

Is Now the Time to De-emphasize RMBS and Plow Into Servicing Rights? Cherry Hill Is…

Cherry Hill Mortgage Investment Corp., which has 76 percent of its assets invested in MBS, plans to whittle that down a bit and make a major push into mortgage servicing rights. The question is: will other real estate investment trusts follow suit? One REIT executive, who spoke under the condition his name not be used, said...

February 20, 2015 - Inside MBS & ABS

Market Participants Raise Some Issues, Questions About Proposed GSE Single Security With FHFA

Industry participants in the Treasury Market Practices Group raised questions about the tax consequences and other issues involved in the plan to develop a “single security” in a meeting with the Federal Housing Finance Agency last month. The recently released minutes of the meeting do not provide much detail. The FHFA representatives described in broad terms the project to create a fungible MBS that Fannie Mae and Freddie Mac would both issue in the to-be-announced market. In response, “Most TMPG members noted...

February 20, 2015 - Inside MBS & ABS

Mortgage Securitization Rate Hit Post-Crash Low in 2014 as MBS Fees Stay High and Portfolio Funding Remains Cheap

Securitization was still the dominant method to fund new home mortgage production in 2014, but Wall Street got a run for its money from portfolio lenders. A new Inside MBS & ABS analysis reveals that 70.5 percent of residential mortgages originated last year were funneled into mortgage securities. That was down from 78.5 percent in 2013 and represented the lowest mortgage securitization rate since 2006. Delivering eligible loans into new Fannie Mae, Freddie Mac and Ginnie Mae securities is...[Includes one data chart]

February 20, 2015 - IMFnews

Securitization Rate Hits Post-Crash Low as Banks Continue to Covet Whole Loans

Almost 71 percent of residential loans originated last year were funneled into mortgage securities. In 2013 the securitization rate was 78.5 percent.

February 19, 2015 - IMFnews

Fannie Plagued by Derivative Accounting as Well, 4Q Income Drops 66 Percent Fannie Mae posted a net profit of $1.3 billion in the fourth quarter, a 66 percent decline sequentially, blaming the earnings downdraft on a reduction in the fair value of its derivatives. The GSE “derivative problem” also plagued the fourth quarter results of Freddie Mac, which reported a slim profit of $227 million after writing down its derivatives by $3.4 billion. …

February 19, 2015 - Inside Mortgage Finance

Freddie Earnings Plunge

Freddie Mac earned just $227 million in the fourth quarter, blaming the 90 percent sequential decline in profits on derivative losses of $3.4 billion. In a briefing with the media, Freddie CEO Don Layton went out of his way to explain that when interest rates eventually rise, the government-sponsored enterprise could benefit greatly. “I wish that accounting was more tied to economics but it’s not,” he said. Layton stressed...

February 19, 2015 - IMFnews

Short Takes: Stearns Hires Executive Away From Wells Fargo / LOs in the Dumps Over Their Careers? / $1.35 Trillion in Originations This Year? / FHFA Official Bolts for Collingwood

Manna from heaven? Roughly 87 percent of LOs expect residential production to exceed 2014’s volume…

February 19, 2015 - IMFnews

Freddie Mac Working on New Non-performing Loan Auction

Fannie Mae has explored NPL auctions, but has yet to pull the trigger.

February 19, 2015 - IMFnews

Freddie Posts Meager Earnings of Just $227 Million, but Says Not to Worry, It’s All About Derivative Accounting

After Freddie Mac makes its next dividend payment in March to the U.S. Treasury, the GSE will have returned $91.8 billion to the government versus financial assistance draws of $72.3 billion.

February 18, 2015 - IMFnews

Earnings at Freddie Mac Plunge by 90 Percent; GSE Blames it on Derivative Losses of $3.4B

Freddie reported a $2.7 billion net worth at Dec. 31 and will pay Treasury a $900 million dividend based on fourth quarter results.

February 18, 2015 - IMFnews

Short Takes: Would You Buy Ocwen Now? / MIAC Offering MSRs / Sindeo Secures Investment / Fannie Rolling Out New Version of DU / Clayton Hires Former Subprime Executive

Ocwen’s massive servicing portfolio (roughly $377 billion in UPB) is worth more than the entire market capitalization rate of the company...

February 18, 2015 - IMFnews

Final GSE Multifamily Tally: $56.9 Billion

Over the past few years there has been some debate about the role Fannie and Freddie play in the multifamily sector with GSE critics pushing for the two to scale back their involvement.

February 18, 2015 - IMFnews

GSE MBS Issuance Down in January as Refis Sputtered

Freddie Mac actually increased its monthly volume by 7.3 percent from December levels, but Fannie Mae’s production fell 15.6 percent.

February 17, 2015 - IMFnews

Highest Cash-Out Refi Share Since ’09 but Dollar Volume Drops

From 2005 to 2007 homeowners converted an estimated $823 billion of home equity into swimming pools, cars, hospital bills and other uses. Of course, those days are long gone.

February 17, 2015 - IMFnews

Correspondent Share of Agency MBS Reached 35 Percent in 2014

Broker-originated purchase mortgages pushed the envelope a little further, with an average credit score of 719.1 and an average DTI of 37.7.

February 13, 2015 - Inside The GSEs

GSE Roundup

Bulletin 2015-1. Jan. 29. Freddie Mac announced its participation in an expanded Home Affordable Modification Program “Pay for Performance” incentive program. The program was developed in conjunction with Fannie Mae at the direction of the Federal Housing Finance Agency. The expanded program will include HAMP’s “Year Six Pay for Performance” incentive, which provides a $5,000 lump-sum payment to help eligible borrowers with first-lien Freddie Mac loans modified under HAMP reduce their principal balance. The HAMP incentive is effective April 1, 2015. Servicing Update. Feb. 9. Freddie introduced a bulk appeal template for late foreclosure sale reporting compensatory fees. Servicers can use this template to submit multiple compensatory fee appeals at a time through Freddie’s Default Fee Appeal System. The system ...

February 13, 2015 - Inside The GSEs

Fannie and Freddie Do $56.9B In Multifamily Business in 2014

Fannie Mae and Freddie Mac wrote a combined $56.9 billion of multifamily business in 2014, up 4.6 percent from the previous year. Fannie issued $11.4 billion in multifamily mortgage-backed securities in the fourth quarter of 2014, bringing the year’s total to $28.6 billion, mostly through its Delegated Underwriting and Servicing program. That represented a slight uptick from the previous year’s $28.5 billion. Fannie also re-securitized $2.5 billion of DUS MBS through its Guaranteed Multifamily Structures (GeMS) program in the fourth quarter. That brought total 2014 issuance in the program to $12.0 billion, making last year the biggest year for GeMS issuance since the program started. “2014 was a strong year for Fannie Mae multifamily activity on all fronts. The DUS ...

February 13, 2015 - Inside The GSEs

9th Circuit Court Upholds GSE Exemption from Local Taxes

The U.S. Court of Appeals for the Ninth Circuit recently affirmed that federal mortgage programs and their administrators, including Fannie Mae and Freddie Mac, are exempt statutorily exempt from state and local taxation of real property transfers. The panel – consisting of Circuit Court Judges Richard Paez, Jay Bybee and Consuelo Callahan – held that because Congress had power to regulate the secondary mortgage market, it was authorized under the “Necessary and Proper Clause” to create Fannie and Freddie and to ensure their preservation by exempting them from state and local taxes. Brought by the City of Spokane, WA, the lawsuit is part of a wave of similar filings throughout the country to challenge the GSE exemption from ...

February 13, 2015 - Inside The GSEs

Study: GSE Conservatorships Don’t Comply With HERA

The Federal Housing Finance Agency is not fulfilling its statutory responsibility to preserve Fannie Mae and Freddie Mac in conservatorship, according to a legal analysis by former government officials. The GSE conservatorships, particularly under the current arrangement that siphons off nearly all of their earnings, violates the terms of the Housing and Economic Recovery Act of 2008, said Michael Krimminger and Mark Calabria. Krimminger was formerly an expert on bank receiverships at the Federal Deposit Insurance Corp., and Calabria was a Republican staffer at the Senate Banking, Housing and Urban Affairs Committee when HERA was being drafted and enacted. Their paper argues that crippling Fannie and Freddie by preventing them from rebuilding capital is exactly the opposite of the way...

February 13, 2015 - Inside The GSEs

New Seller/Servicer Rules May Give an Edge to Large Nonbanks

Recently proposed new minimum financial eligibility requirements for Fannie Mae and Freddie Mac seller/servicers – including net worth, capital ratio and liquidity criteria – appear to be less restrictive than expected but may give an edge to large nonbanks over smaller players and new entrants, analysts say. Announced Jan. 30 by the Federal Housing Finance Agency, the eligibility requirements consist of three primary components. In terms of minimum net worth, the proposed requirement for all seller/servicers is a base of $2.5 million plus 25 basis points of unpaid principal balance for total loans serviced. As far as minimum capital ratio is concerned, the proposed requirement for all non-depository seller/servicers is to have tangible net worth/total assets greater than 6 percent. “Depository institutions ...

February 13, 2015 - Inside The GSEs

U.S. Judge Rebuffs Shareholder Attempt to Claim GSE Profits

A U.S. district court judge in Iowa recently dismissed a shareholder motion to vacate an amended agency agreement requiring Fannie Mae and Freddie Mac to pay nearly all their quarterly profits to the Treasury equal to their net worth. Filed by Continental Western Insurance Company, the lawsuit is similar to another case, Perry Capital, Inc. v. Lew, filed by the plaintiff’s parent, Berkley Regional Insurance Co., and Berkley Insurance Co. against the Federal Housing Finance Agency…

February 13, 2015 - Inside The GSEs

FHFA Actions Lay Foundation For Legislative GSE Reform

Federal Housing Finance Agency Director Mel Watt has repeatedly said that GSE reform should be left to Congress. However, industry analysts suggest that the FHFA’s actions under Watt are helping to build a foundation for legislation. Michael Stegman, counselor to the Treasury Department for housing finance policy, said the FHFA’s actions are helping to create bipartisan consensus for provisions to be included in GSE reform. He pointed to the common securitization platform, risk-sharing transactions and capital standards for private mortgage insurers. Stegman said the FHFA’s actions are just a starter, particularly because Watt’s actions could be reversed by the next director of the FHFA. The Treasury official was among the speakers who addressed the current state of the GSEs at ...

February 13, 2015 - Inside The GSEs

Watt Signals the End May Be Near on Principal Reductions

The Federal Housing Finance Agency continues to analyze the issue of principal reductions for Fannie Mae and Freddie Mac loans, but Director Mel Watt made it clear recently that unless it’s a “win-win” for both the borrower and the GSEs, the issue is a non-starter with him. Moreover, in a press briefing, he made it clear that at some point the FHFA may take the issue off the table entirely. “We’re doing a lot of work on this,” Watt said, suggesting that if a program ever sees the light of day, principal reductions would be done “in a responsible way.” The FHFA has come under political pressure from left-leaning members of the Democratic Party, including Sen. Elizabeth Warren of Massachusetts ...

February 13, 2015 - Inside The GSEs

GSE MBS Issuance Down in January as Refi Sputtered

Fannie Mae and Freddie Mac issued $57.72 billion of single-family mortgage-backed securities in January, a 7.8 percent decline from the previous month, according to a new Inside The GSEs ranking and analysis. Freddie actually increased its monthly volume by 7.3 percent from December levels, but Fannie production fell 15.6 percent. It’s not unusual for GSE monthly trends to fluctuate; Fannie’s MBS issuance was up sharply in December. Freddie’s production was buoyed slightly by some $199.3 million of modified mortgages that were securitized last month. And it’s not surprising that the flow of purchase mortgages into GSE securities fell 14.4 percent in January, as the housing market hit a seasonal cooling. However, refinance activity was also [includes exclusive charts] ...

February 13, 2015 - Inside MBS & ABS

San Francisco Controller Likely Puts Kibosh on Use of Eminent Domain in City for Time Being

A push to seize a few thousand underwater mortgages in the San Francisco area by eminent domain has likely run into a dead end for now, after a report from the City and County of San Francisco Controller’s Office discouraged local officials from pursuing the idea any further. “Precluding any participation from Fannie Mae or Freddie Mac, the use of eminent domain would seem to be an inviable option,” the document concluded. On Oct. 28, 2014, the Board of Supervisors issued...

February 13, 2015 - IMFnews

FHFA’s Watt: I’m Not Presuming ‘Abuse’ By Captives That Want to be FHLB Members

Roughly 18 current members of the FHLBanks are affected by the proposed ban, seven of which are mortgage real estate investment trusts.

February 12, 2015 - IMFnews

Short Takes: Mangrove to Reveal HLSS Director Nominees / MountainView Selling MSRs / SLS in MSR Deal with JPM / Please Don’t Come to Chicago / First Alliance Hires Former Nationstar Official

A 50-year tradition is now kaput: The Federal Reserve Bank of Chicago has cancelled its annual bank structure conference...

February 12, 2015 - Inside Mortgage Finance

M&A Heats Up: New Jersey REIT to Buy Aurora While RoundPoint May Be Entertaining Offers

RoundPoint Mortgage, a servicer with more than $41 billion of receivables on its books, is entertaining offers for the entire company, according to industry officials briefed on the matter. Moreover, servicing advisors contend that several large bulk servicing portfolios are ready to hit the market in what should turn out to be a busy late winter/early spring for both buyers and sellers of mortgage servicing rights. In a recent public disclosure, Ocwen Financial said...

February 12, 2015 - Inside Mortgage Finance

Inter-Party Differences Hinder Action in Congress on Mortgage Finance Reform

Internal differences among Democrats and Republicans – let alone the strong differences between the two parties – have prevented Congress from resolving the conservatorship of the two government-sponsored enterprises, according to industry analysts. At the ABS Vegas conference this week sponsored by the Structured Finance Industry Group and Information Management Network, two people with intimate knowledge of matters in the House and Senate pointed to inter-party issues regarding GSE reform. Andrew Olmem, a partner at the law firm of Venable and a former Republican chief counsel and deputy staff director at the Senate Committee on Banking, Housing, and Urban Affairs until 2013, noted...

February 12, 2015 - Inside Mortgage Finance

Two Modestly Bright Spots in Slowing 4Q14 Mortgage Origination Market: Jumbo and Home-Equity Lending

The two best things about the mortgage origination market in the fourth quarter were that it meant 2014 wasn’t as bad as once feared, and that refinance demand had picked up. But a new Inside Mortgage Finance analysis and ranking reveals two other positive trends: the jumbo and home-equity markets continued to gain strength in the final three months of 2014. Lenders originated an estimated $67 billion of jumbo mortgages during the fourth quarter, up 3.1 percent from the previous period. Home-equity production bounced 5.0 percent higher, to an estimated $21 billion. Neither gain was...[Includes two data charts]

February 11, 2015 - IMFnews

Cherry Hill Mortgage REIT Buys Mortgage Company; Will Leverage MSRs

Stan Middleman, chairman of CHMI, told IMFnews that having agency approvals will allow the REIT to leverage servicing rights...

February 10, 2015 - IMFnews

MountainView Selling $736 Million of Mortgage Servicing Rights

The MountainView package is top heavy with California product. The identity of the seller was not provided.

February 10, 2015 - IMFnews

Liquidity Requirements in FHFA Proposal a Concern for the Industry

Marina Walsh, vice president of industry analysis for MBA, said, “We don’t have enough information to do a thorough analysis of the proposal.”

February 10, 2015 - IMFnews

Treasury’s Point Man on GSE Reform Punts on Handicapping Passage of a Bill

Treasury counselor Michael Stegman noted that policymakers on both sides of the aisle are dissatisfied with the current status quo regarding Fannie Mae and Freddie Mac.


With the recent dip in interest rates, how do you feel about loan volumes this year?

We see loan production ending 2015 flat compared to 2014.
We’re optimistic that our originations will rise by 10 to 20 percent year over year.
We’re really optimistic: We expect production to increase by 20 percent or better from last year.
We’re not so bullish. Originations for us may actually fall.

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