Ginnie Mae Issuance

Browse articles from all of our Newsletters related to Ginnie Mae Issuance.

November 25, 2015 - Inside FHA/VA Lending

Around the Industry

Menendez Introduces HAWK Amendment in T-HUD Appropriations Bill. The National Association of Realtors recently sent a thank-you note to Sen. Robert Menendez, D-NJ, for introducing an amendment to H.R. 2577, the Transportation, Housing and Urban Development, and Related Agencies Appropriations Act of 2016, to restore HUD’s authority to offer the Homeowners Armed with Knowledge (HAWK) program. Lawmakers who were concerned about the financial condition of the FHA Mutual Mortgage Insurance Fund denied funding for the HAWK program last year in a continuing spending bill, effectively stalling the program for a year. The HAWK program is a key component of the FHA’s Blueprint for Access, which was designed to open up the credit box for underserved borrowers. Specifically, program participants will benefit from reductions in FHA premiums once they complete ...

November 25, 2015 - Inside FHA/VA Lending

Correction Delay Causes HUD IG to Fail FY 2015, Restated Financials

It may take Ginnie Mae a bit longer than expected to make all the accounting corrections necessary before the Department of Housing and Urban Development’s inspector general to render a clean opinion on the guarantor’s fiscal 2015 financial statement and its restated financials for FY 2014. In fact, Ginnie might have to make some significant long-term investments to address the IG’s accounting concerns, said Thomas Weakland, acting chief financial officer at Ginnie Mae. The agency may have to spend on new technology and infrastructure, and beef up its staff “spanning multiple years” to remediate all of the IG’s concerns, said Weakland. However, Weakland did not state a timeline for making all the necessary corrections and adjustments. Until the IG is fully satisfied with the restatement, it will continue to withhold an audit opinion. “We recognized some of the efforts made and the constraints that ...

November 20, 2015 - Inside MBS & ABS

Procedural Delays Prompts HUD IG to Withhold Opinion on GNMA’s FY 2015, Restated Financials

The inspector general of the Department of Housing and Urban Development refused to sign off on Ginnie Mae’s fiscal 2015 financial statement and its restated financial statement for FY 2014 due to lingering concerns about the accuracy of both statements. The IG said it was unable to obtain sufficient evidence to express an audit opinion on the fairness of the $5.4 billion in non-pooled, defaulted mortgage loans still held by Ginnie Mae. The agency also continued to use improper ...

November 13, 2015 - Inside FHA/VA Lending

Around the Industry

FHA to Unveil FY 2015 MMIF Audit Results. On Nov. 16, the FHA will release its 2015 annual report to Congress, a document that historically has included the results of the annual actuarial audit of the Mutual Mortgage Insurance Fund, or MMIF. Early in the day, Ed Golding, principal deputy assistant secretary for the Department of Housing and Urban Development’s Office of Housing, is scheduled to brief reporters on the report and take questions. As reported by Inside FHA/VA Lending, the reduction in the annual mortgage insurance premium earlier this year has put the MMIF on an accelerated path to recovery. But whether the ensuing increase in FHA production – which translates into additional premiums – will be enough to get the fund back to its statutory 2 percent capital reserve ratio remains ...

November 13, 2015 - Inside FHA/VA Lending

Nationstar Seeks to Raise FHA/VA Origination Volumes, Recaptures

Nationstar Mortgage is looking to enhance its FHA and VA lending and increase the recapture rate for the two loan products, according to the company’s top executives. In its third-quarter earnings call, Nationstar CEO Jay Bray told analysts the company has initiated targeted marketing efforts for refinancing opportunities for FHA and VA borrowers. In the third quarter, Nationstar’s overall origination segment increased funding to nearly $5 billion and raised its recapture to 28 percent. The company has reported profitability for five consecutive quarters and posted $50 million in earnings. Servicing profitability improved for the third quarter to 3.6 basis points, a 57 percent improvement from the prior quarter. In addition, the company generated strong cash flows of $172 million during the period. Ranked 17th among the top FHA lenders in the third quarter, Nationstar originated ...

November 13, 2015 - Inside FHA/VA Lending

MPF Program, Ginnie Mae Unveil Broader Government MBS Product

The Federal Home Loan Bank System is seeking to boost its share of government-backed lending and the Ginnie Mae market with a new servicing-release option for FHA, VA and rural housing mortgages that are sold into the Mortgage Partnership Finance program. The new feature adds to an existing servicing-retained execution in the MPF Government Mortgage-Backed Securities program. The current servicing-retained component requires participating lenders to service loans they originate and sell into the MPF conduit. The servicing-release option from Nationstar Mortgage, a top-10 mortgage servicer based in Dallas, will provide lenders with greater pricing flexibility so they can become more competitive in the communities they serve, said Matt Feldman, president of the Chicago FHLB. Only FHLBank members that are participants in MPF can use the government MBS program. In order to ...

November 13, 2015 - Inside FHA/VA Lending

PHH Mulls Continued Participation In FHA, Will Proceed Cautiously

Facing the possibility of a potential False Claims Act lawsuit, PHH Corp. is reconsidering its participation in the FHA mortgage insurance program. Though PHH’s FHA segment represents only 3 percent of its mortgage volume over the past 12 months, the company will proceed cautiously as it evaluates the risk-adjusted return of FHA products and programs, said Glenn Messina, PHH president and chief executive.Ranked 50th among FHA lenders as of June 30, 2015, PHH expects more regulatory challenges in 2016 as well as rising compliance costs, said Messina during a third-quarter earnings call. In its latest quarterly filing, PHH disclosed receiving a subpoena from the inspector general of the Department of Housing and Urban Development for documents related to, among other things, FHA loan origination and underwriting practices. Like several other FHA lenders, PHH is ...

November 13, 2015 - Inside MBS & ABS

Chicago Federal Home Loan Bank, Ginnie Mae Unveil Servicing-Release Option for Ginnie MBS

The Federal Home Loan Banks appear to be eyeing a bigger share of the government-backed lending market with the announcement of a new servicing-release option for FHA, VA and rural housing loans sold into the Mortgage Partnership Finance program. The addition of a servicing-released option from Nationstar Mortgage, a top-10 mortgage servicer, to an already existing servicing-retained execution will give participating lenders greater flexibility in pricing and selling government-backed mortgages they have originated into the secondary market, said Matt Feldman, president of the Chicago FHLB. Previously, program participants were required...

November 12, 2015 - Inside Mortgage Finance

Is a Five-Year Old Nonbank That Services Just $21 Billion in Loans Worth Upwards of $621 Million?

loanDepot Inc. this week priced its much anticipated initial public offering, valuing its soon-to-be-listed shares – 34.5 million units in total – at $18 each or roughly $621 million, a lofty valuation for a company that owns just over $20.9 billion in mortgage servicing rights. Few in the industry are questioning loanDepot’s explosive growth since its inception five years ago, but eyebrows have been raised about the anticipated size of the deal. “It’s...

November 12, 2015 - Inside Mortgage Finance

MSR Marks Caused Plenty of Red Ink in 3Q15, But a Recovery is at Hand – And Then Some

Thanks to declining interest rates and higher prepayment speeds in the third quarter – especially on Ginnie Mae receivables – several publicly traded nonbanks were forced to write down the asset value of their mortgage servicing rights, causing millions of dollars in red ink. According to a review by Inside Mortgage Finance of the earnings statements of six nonbanks, the combined servicing markdown was an ugly $448 million. The group includes Nationstar Mortgage, Ocwen Financial, PennyMac Financial Services, PHH Corp., Stonegate Mortgage and Walter Investment Management Corp., the parent of Ditech Financial. Walter took...

November 6, 2015 - Inside Mortgage Trends

Agency Channel Analysis: Top Sellers 3Q15

November 6, 2015 - Inside MBS & ABS

Ginnie Mae President Admits Excessive Cautiousness Caused Material Misstatements in FY 2014 Financials

Overly conservative accounting, subpar servicing, lack of claims data and a desire to protect taxpayers from mortgage-related losses contributed to the material flaws in Ginnie Mae’s FY 2014 financial statements. Ginnie Mae is working to implement a recommendation by the Department of Housing and Urban Development inspector general to use generally accepted accounting principles (GAAP) in restating its 2014 financial statement and adjusting affected prior-year financials, according to Ted Tozer, president of the agency. Tozer noted...

November 6, 2015 - Inside MBS & ABS

Single-Family TBA Margin Requirement Proposal Set To Draw in Multifamily Housing Finance Programs

A rule proposed late last month to impose margin requirements in the single-family “to-be-announced” market would draw in the multifamily housing finance programs of Fannie Mae and Ginnie Mae, according to industry trade groups. At issue is SR-FINRA-2015-036, a proposal to amend Financial Industry Regulatory Authority Rule 4210 margin requirements for TBA transactions, including adjustable-rate mortgage transactions, specified pool transactions, and transactions in collateralized mortgage obligations, issued in conformity with a program of an agency or government-sponsored enterprise, with forward settlement dates. In a letter last week to the Securities and Exchange Commission, more than a dozen industry groups expressed...

November 6, 2015 - Inside MBS & ABS

Agency MBS Issuance Declined in October Despite Modest Rally in Refinance Activity

New agency issuance of single-family MBS declined in October as a result of a slowdown in the purchase-mortgage market, according to a new Inside MBS & ABS analysis and ranking. Fannie Mae, Freddie Mac and Ginnie Mae issued a total of $107.19 billion of single-family MBS last month, a 5.6 percent slip from September’s volume. The flow of purchase mortgages securitized by the three agencies was down 9.6 percent for the month, while refinance volume was up 2.6 percent in October. Some of the strength in refi activity is...[Includes two data tables]

October 30, 2015 - Inside FHA/VA Lending

GNMA Reports Gain in Servicing Securitized FHA Mortgage Loans

Servicing of FHA loans pooled into Ginnie Mae mortgage-backed securities rose 2.1 percent in the third quarter of 2015. Three megabanks in the top five-servicer tier accounted for a significant share of the market. Ginnie Mae servicers of FHA collateral reported $969.0 billion outstanding at Sept. 30, with Wells Fargo accounting for 27.9 percent of total servicing volume. Wells Fargo, Chase Home Finance (#2) and Bank of America (#5) combined to service 39.3 percent of FHA outstanding as of the end of the quarter. PennyMac Corp. closed the quarter with a $57.7 billion FHA servicing portfolio, good enough for third place and 6.0 percent of the market. Fourth-ranked NationStar Mortgage reported a $53.6 billion servicing portfolio at the end of the ... [ 1 chart ]

October 30, 2015 - Inside FHA/VA Lending

Servicing of VA Collateral Rising as Wells Fargo Continued to Dominate

The unpaid principal balance on VA loans securitized in 3Q15 Ginnie Mae mortgage-backed securities totaled $426.9 billion, up 5.1 percent from the previous quarter and 17.3 percent more year-over-year. Wells Fargo serviced $114.4 billion of VA collateral at Sept. 30, 2.0 percent up from the prior quarter. It was good enough for a commanding 26.8 percent of the market. The only other megabank among the top five servicers in this segment was fifth-place Chase Home Finance, which closed the quarter with $16.8 billion and a 3.9 percent market share. It saw portfolio declines on both quarterly and year-over-year bases. USAA Federal Savings Bank, in third place, accounted for $24.1 billion, or 5.6 percent of the VA-backed MBS servicing market. Nonbanks PennyMac, in second place, and fourth-ranked Freedom Mortgage combined for 11.0 percent of the ... [ 1 chart ]

October 30, 2015 - Inside MBS & ABS

Fitch: RMBS Servicers Show Progress Managing ‘Challenged’ Portfolios; Rising Costs a Concern

Banks and nonbanks, in general, are doing a better job of servicing “challenged” mortgages and MBS these days, according to a new report from Fitch Ratings. However, concerns remain. Fitch noted that residential servicing costs “continue to rise in concert with increased compliance focus and enhanced regulatory scrutiny.” Moreover, “Higher regulatory capital requirements may become a factor too, especially for smaller servicers.” Over the past two years, Fannie Mae, Freddie Mac and Ginnie Mae have all ushered...

October 30, 2015 - Inside MBS & ABS

Commercial Mortgage Securitization Cools Off in 3Q15, Agency Share Gaining Ground

New securitizations backed by commercial mortgages declined during the third quarter of 2015, but the market at the nine-month mark has nearly matched total issuance for all of last year, according to a new Inside MBS & ABS analysis. Some $49.62 billion of income-property mortgages were securitized during the third quarter of 2015, down 15.8 percent from the second quarter. However, with $162.18 billion of commercial mortgage securities issuance through the first nine months of 2015, the market is poised to reach its highest annual volume since the financial crisis when the year ends. Both sides of the market – non-agency CMBS and agency multifamily MBS – saw...[Includes one data table]

October 29, 2015 - Inside Mortgage Finance

Nonbanks Play a Bigger Role in Mortgage Servicing, Get to Manage a Complex Asset

Many independent mortgage companies that are relatively new to the mortgage servicing market are actively managing their portfolios in a constantly shifting environment, according to panelists at the annual convention of the Mortgage Bankers Association. The surprisingly cheap cost of retaining mortgage servicing rights during the 2012 bonanza led a number of nonbank lenders to start amassing MSR portfolios. It has become a valuable tool in managing cash flow and earnings in the volatile mortgage production market of recent years. Guild Mortgage is...

October 29, 2015 - Inside Mortgage Finance

Everybody Agrees on FHA’s Upward Revenue Arc, No Outright MIP Cut; Analysts Say More Policy Changes Likely to Come

Although most analysts and industry observers agree that the FHA cut in mortgage insurance premiums, effective in January, has resulted in stronger purchase volumes and credit availability, opinions vary as to whether another reduction is on the way. The FY 2014 independent actuarial audit of the FHA Mutual Mortgage Insurance Fund projected FHA’s total loan production in fiscal 2015 at $124 billion. With the FHA pricing adjustment, production is now expected to increase by 60 percent, with total production estimated at $200 billion by the end of the fiscal year, said Brian Chappelle, an industry consultant. As program fundamentals trend upward, Chappelle is...

October 23, 2015 - Inside MBS & ABS

Analysts Warn that Credit Quality of New MBS in the TBA Market Is Declining, Increasing Prepayment Risk

A number of factors are making new MBS in the to-be-announced market less attractive to investors than MBS issued a few years ago, according to a report from Deutsche Bank Securities. “Aggressive servicers keep picking up market share, credit quality keeps softening and loan balances edge up,” the analysts said. “It adds up to declining quality for TBA MBS.” While those trends certainly aren’t new, Deutsche Bank said...

October 22, 2015 - Inside Mortgage Finance

Servicing Offerings Remain Brisk; Carrington Has Become a Buyer, Ocwen Loses a Contract

Several $1 billion-plus mortgage servicing packages have reached the auction market the past few weeks as sellers try to complete deals before yearend. But one potential obstacle could gum up the works: a continuing decline in interest rates. With the yield on the benchmark 10-year Treasury hovering just above the 2.0 percent mark, mortgage rates are now at their lowest levels since the spring. And as any servicing investor knows: A declining interest rate environment is never a good thing to sell into. In early September, U.S. Trading LLC, Cherry Hill, NJ, hit...

October 22, 2015 - Inside Mortgage Finance

Nonbanks Continue to Gain in Agency Servicing, Except Ocwen; Bank Pullback Moderates

Commercial banks – the megabanks in particular – appear to be moderating their retreat from servicing loans pooled into Fannie Mae, Freddie Mac and Ginnie Mae securities. But most of the largest gains in the third quarter came from nonbanks with one glaring decline: Ocwen Financial. According to loan-level data compiled by Inside Mortgage Finance, Ocwen serviced $64.22 billion of agency collateral at Sept. 30, a blood curdling 33.7 percent sequential drop and a sign that al-though the publicly traded nonbank plans to remain a servicer of conventional loans, it continues to sell mortgage servicing rights and deleverage its balance sheet. The megabanks – Wells Fargo, JPMorgan Chase, Bank of America and U.S. Bank – ranked...[Includes two data tables]

October 16, 2015 - Inside FHA/VA Lending

HUD IG Criticizes Ginnie Mae’s Restatement of Flawed Financials

The Department of Housing and Urban Development’s Inspector General has slammed Ginnie Mae for understating the severity of misstatements in prior year financials. In a memorandum, the HUD IG said Ginnie Mae’s inadequate disclosures in a restatement notification did not help users of financial statements understand the full impact of the material misstatements. The reporting errors were identified in an IG audit of Ginnie’s fiscal year 2014 financial statements. According to the IG, the misstatements in the 2014 audit were due to improper accounting for FHA’s reimbursable costs and the flawed accounting treatment and inadequate disclosure of borrowers’ mortgage escrow funds held in trust by Ginnie in its defaulted issuers’ portfolio. These errors may have affected Ginnie Mae’s prior year financial statements as far back as FY 2011, the IG concluded. In its audit report, the IG ...

October 16, 2015 - Inside FHA/VA Lending

Nonbanks Dominate Ginnie Mae Market, FHA/VA MBS Rise in 3Q

Nonbanks comprised a significant portion of Ginnie Mae business as independent mortgage companies replaced banks as primary securitizers of FHA and VA loans. In the third quarter of 2015, mortgage companies accounted for 60.8 percent of VA loans and 67.1 percent of FHA loans securitized in Ginnie pools. For mortgage companies, production of Ginnie mortgage-backed securities backed by FHA loans increased by 5.0 percent in the third quarter from the previous quarter and was up a whopping 118.1 percent during the first nine months of 2015 over the same period last year. Nonbank securitization of VA loans rose by a modest 1.5 percent quarter over quarter and by 83.6 percent over the nine-month period compared to the same period last year. Megabanks, whose assets exceed $1 trillion, were the second largest issuers of Ginnie Mae MBS, accounting for less than ... [3 charts]

October 16, 2015 - Inside MBS & ABS

HUD IG Dissatisfied with Ginnie Mae’s ‘Restatement,’ Cautions Users Not to Rely on Previous Statements

The Inspector General of the Department of Housing and Urban Development has warned users not to rely on Ginnie Mae’s fiscal years 2011-2014 financial statements after expressing displeasure over the agency’s inadequate explanation of material misstatements identified during a 2014 audit. The warning came in a memorandum the HUD IG issued in response to Ginnie’s restatement notification on Sept. 16, 2015, commenting on the fiscal 2014 audit report. The audit left certain issues unresolved due to its limited scope, causing the IG to issue a disclaimer of opinion on the FY 2014 financial statements. Specifically, the uncertainty focused...

October 16, 2015 - Inside MBS & ABS

The Collingwood Group Launches a Broker/Dealer Unit for Mergers & Acquisitions, Debt Sales and More

The Collingwood Group, a Washington-based consultancy that built its practice on Ginnie Mae work and issues tied to the government-sponsored enterprises, has received approval from the Financial Industry Regulatory Authority to open a broker/dealer unit. The new division is called Collingwood Capital Advisors and will be headed by Mark DeGennaro, who joined TCG as a managing director in February 2011 to head what was then a new effort to build the consultancy’s hedge fund/private equity group. Although Collingwood Capital is now a registered broker/dealer, it will not be involved...


Should the FHA cut premiums?

Yes, the MMIF has surpassed the 2 percent minimum. It’s time to help first-time home buyers.
Yes, but not until mid-2016 at least, when we see how the fund is doing.
No. The MMIF needs to rebuild and prepare for another potential downturn – just in case.
No. We believe the minimum ratio should actually be raised to 4 percent or higher.
I am undecided.

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