Refinance Programs

Browse articles from all of our Newsletters related to Refinance Programs.

October 21, 2016 - Inside FHA/VA Lending

GNMA Revises Pooling-Eligibility Rules for Streamlined Refi Loans

Ginnie Mae this week announced a policy change to ease investor fears about the rapid streamline refinancing of some loans in Ginnie I mortgage-backed securities pools and the effect of faster prepayments on mortgage securities investments. The revised policy establishes new criteria for pooling for streamlined refi loans. The revised policy addresses confusion regarding the Department of Veteran Affairs’ streamlined refi program, also known as the Interest Rate Reduction Refinance Loan (IRRRL) program, which is at the core of the rapid refi dispute. Under the VA’s interim qualified mortgage rule, a borrower must show six consecutive months of payments on the original loan before they can refinance into an IRRRL. With an IRRRL, borrowers get net tangible benefits of a lower interest rate, limited underwriting and no appraisal. As a qualified mortgage, an IRRRL provides ...

October 21, 2016 - Inside FHA/VA Lending

Nonbanks Took Over GNMA Servicing Market in 3Q16

Nonbanks crossed a threshold in the third quarter of 2016, posting a hefty 6.3 percent increase in their combined Ginnie Mae servicing portfolio, according to a new Inside FHA/VA Lending analysis. Nonbanks serviced $826.6 billion of Ginnie single-family mortgage-backed securities as of the end of September. That represented 51.3 percent of the total Ginnie market. The nonbank servicing total includes a small amount of Ginnie servicing held by state housing finance agencies, roughly 1.0 percent of the entire market. But it doesn’t include the significant amount of Ginnie servicing that nonbanks do as subservicers for both depository and nonbank clients. Interestingly, the biggest gain for nonbanks in percentage terms came in servicing VA loans, which rose 8.1 percent from the second quarter to $252.1 billion, or 51.0 percent of the market. The VA sector is one business from ... [4 charts ]

October 21, 2016 - Inside MBS & ABS

GNMA Allays Investor Fears with a Revised Policy on Pooling Eligibility for Streamlined Refinance Loans

Ginnie Mae has announced a policy change to ease investor concern over recent streamlined refinancing trends involving a small number of mortgage loans in Ginnie pools. The policy change addresses the issue of premature streamline refinancing of certain loans in Ginnie Mae I single-issuer pools that threatens to deflate investors’ expectation of a full 100-percent return on their MBS investments. “Investor participation … depends...

October 14, 2016 - Inside Mortgage Trends

Private MIs Winning Purchase-Market Share

Private mortgage insurers are quietly gaining ground on their government-insured rivals in the critical home-purchase market, according to a new Inside Mortgage Trends analysis of agency mortgage-backed securities data. Fannie Mae and Freddie Mac securitized $61.47 billion of purchase mortgages with private MI coverage during the third quarter, a gain of 33.4 percent from the previous period. At the same time, Ginnie Mae securitized $79.91 billion of FHA and VA purchase mortgages, up 19.3 percent from the second quarter. The private MI share of agency purchase loans rose...[Includes two data tables]

October 13, 2016 - Inside Mortgage Finance

Flow of Private MI Loans Into GSE MBS Kept Pace With Overall Increase in Fannie/Freddie Business in 3Q16

Trends in the agency mortgage-backed securities market suggest that private mortgage insurers may have gained some market share from government MI programs during the third quarter of 2016, according to a new Inside Mortgage Finance analysis. Fannie Mae and Freddie Mac securitized a total of $75.89 billion of insured single-family mortgages during the third quarter, an increase of 29.5 percent from the previous period. That was a tad below the 29.7 percent increase in overall MBS production by the two government-sponsored enterprises, but it kept the private MI share at 26.8 percent for the third quarter. Meanwhile, the booming Ginnie Mae market showed...[Includes two data tables]

October 7, 2016 - Inside FHA/VA Lending

Around the Industry

Ginnie Mae FY 2016 Highlights. “So far, we’ve pretty much broken every record,” said a Ginnie Mae spokesperson. Total mortgage-backed securities issuance for FY 2016 was $490.3 billion, “an all-time high by a pretty wide margin,” according to the spokesperson. September MBS issuance was also at an all-time high: $54.8 billion. Ginnie Mae commitment authority for the fiscal year was $430.2 billion. Approximately 2.3 million mortgage loans worth $462 billion underlay Ginnie’s single-family MBS pools in FY 2016. Of this total, $278 billion (1.4 million loans) were purchase mortgages, and $184 billion (0.9 million loans) were refinances or modified loans. Of the purchase dollar volume, first-time homebuyers accounted for $200 billion (1.1 million loans). Of the $462 billion single-family MBS pools, FHA accounted for 57.1 percent ($264 billion), VA, 38.8 percent ($179 billion), and rural housing loans, 3.9 percent ($18 billion). New California Law Protects Spouses of HECM Borrowers from ‘Widow Foreclosure.’ On Sept. 29, 2016, California Gov. Jerry Brown, D, signed Senate Bill 1150 into law to protect widows, widowers and other heirs of mortgage borrowers from unnecessary foreclosures.

October 7, 2016 - Inside FHA/VA Lending

Initial Material Defect Rate Rises For the First Time in Nine Quarters

The initial material defect rate of FHA loans has increased to 50 percent in the third quarter of 2016 from the previous quarter, according to the latest FHA Lender Insight report on quality control. A good portion of the defective mortgage loans, however, has been mitigated during the post-endorsement technical review process, the report indicated. In the second quarter, the initial material defect rate had been flat, averaging 47.4 percent over the last eight quarters. The latest report show the top five mitigated findings, which reflect the number of initially unacceptable ratings and the number of findings mitigated for loans between April and June, 2016. Some 6,312 FHA loans comprised the sample, and they consisted of purchase loans (71.0 percent), streamline refinance (13.5 percent), rate and term refis (9.0 percent), and Home Equity Conversion Mortgages (6.7 percent). In addition, ...

October 7, 2016 - Inside FHA/VA Lending

IG Audit Finds GNMA Left Hundreds Of Uninsured Loans in MBS Pools

Requiring an undercapitalized issuer to repurchase uninsured performing mortgages out of a mortgage-backed securities pool could increase risk to the federal government, warned Ginnie Mae. Responding to an adverse audit report from the Department of Housing and Urban Development’s Office of the Inspector General, Ginnie said that while it generally accepts the IG’s recommendations, forcing an undercapitalized issuer to buy out performing loans and either hold them in portfolio or sell them at a substantial loss would put the government at greater risk. “This is something we need to be alert to in certain cases,” the agency said. According to the report, Ginnie improperly allowed more than $49 million of single-family mortgages with terminated insurance to remain in its MBS pools for more than one year without obtaining FHA coverage. The IG warned Ginnie could be on the ...

October 7, 2016 - Inside FHA/VA Lending

Ginnie Mae Crushed Single Family MBS Issuance Records in 3Q16

Ginnie Mae rode a surging purchase-mortgage market and heavy refinance activity to new production records during the third quarter of 2016. The agency issued a whopping $145.14 billion of single-family mortgage-backed securities during the third quarter, according to an Inside FHA/VA Lending analysis of MBS disclosures. That figure is based on pool-level disclosures that reveal exact principal balance amounts and it includes securities backed by FHA home-equity conversion mortgages. The data in the table below are based on truncated loan-level disclosures and do not include HECM activity. New Ginnie MBS issuance in the third quarter was up 15.7 percent from the previous quarter. Ginnie MBS production set three consecutive monthly records during the third quarter, culminating in a huge $52.46 billion month in September. Purchase-mortgage activity was the key driver, but the ... [ 4 charts ]

October 7, 2016 - Inside MBS & ABS

Agency MBS Production Soared in 3Q16, Paced By Three Record-Setting Months for Ginnie Mae

Ginnie Mae set new monthly and quarterly production records during the third quarter of 2016, leading the agency MBS market to a huge 24.6 percent increase in new issuance, according to a new market analysis and ranking by Inside MBS & ABS. The three agencies produced $428.36 billion in new single-family MBS during the third quarter. Fannie Mae and Freddie Mac actually had bigger increases from the second quarter, but Ginnie was the star of the show. Ginnie recorded...[Includes two data tables]

October 6, 2016 - Inside Mortgage Finance

Refi Borrowers Increasingly Taking Cash Out, Equity Extraction in Second Quarter at Highest Level Since 2009

Continued increases to home prices along with low interest rates have prompted a number of borrowers to take cash out when completing a refinance. Some 41.0 percent of refinances completed in the second quarter of 2016 resulted in a loan amount at least 5.0 percent higher than the unpaid principal balance of the original loan, according to Freddie Mac. In the second quarter of 2015, the share was 33.0 percent and between 2010 and 2013 it typically ranged from 15.0 percent to 20.0 percent, according to Freddie. The total amount of home equity cashed out has also increased...

October 6, 2016 - Inside Mortgage Finance

GSE Purchase-Mortgage Business Hits Post-Crash High in 3Q16, While Refi Sector Keeps Percolating

Fannie Mae and Freddie Mac securitized $135.69 billion of single-family purchase mortgages during the third quarter, according to a new Inside Mortgage Finance analysis of mortgage-backed securities disclosures by the two government-sponsored enterprises. That was up a hefty 26.2 percent from the previous quarter, and it represented the biggest quarterly flow of purchase mortgages to the GSEs since the housing market collapse. Although the loans were pooled in MBS issued during the third quarter, a significant number of them were actually originated during the April-June cycle. The third quarter typically has...[Includes three data tables]

September 23, 2016 - Inside FHA/VA Lending

VA Originations Stayed Strong in 2Q16 as Volume Rose 30 Percent

VA lenders recorded a strong first half for 2016, thanks to a substantial boost in production in the second quarter, agency data show. VA guarantees on purchase and refinance mortgages totaled $83.5 billion for the first six months, as lenders made a strong second-quarter push that brought production up by 29.9 percent. Streamlined refinancing, also known as Interest Rate Reduction Refinance Loans (IRRRLs), comprised a hefty portion of total VA originations – 21.7 percent. VA has been particularly strong in the refinance segment over the last six months, racking up $44.3 billion in total refi volume, far exceeding FHA’s $36.4 billion and private mortgage insurers’ $21.6 billion. (see IFHA/VA Lending, 8/9/16.) Overall, FHA remained the top mortgage insurer in the government-backed lending market with $123.0 billion, compared to VA’s $84.8 billion. Loans with primate MI totaled $102.7 billion ... [ 1 chart ]

September 23, 2016 - Inside FHA/VA Lending

Streamline Refi Segment Causing Problems for VA, Ginnie Investors

The Department of Veterans Affairs is working on a change to its existing streamline refinancing policy to address a problem that is giving VA and Ginnie Mae the fits. Under the VA’s qualified-mortgage rule, a VA borrower must wait six months and show six months’ worth of mortgage payments before they can refinance into an IRRRL (Interest Rate Reduction Refinance Loan) and take advantage of the lower rate. However, it seems not all VA lenders are adhering to the rule and that a good number are refinancing veterans into IRRRLs even before the mandatory seasoning period ends for fear interest rates might rise and the borrower might not benefit from the lower rate. “I’ve redone the numbers in 20 different directions on how much a borrower would save if they had to wait two more months and the rate went up a quarter of a point because they lost those two months ...


After the November elections, how long will it take for a new Congress and White House to pass GSE reform legislation?

I’m confident a bill will be passed the first year.


2 to 3 years. GSE reform is complicated.


Sadly it won’t happen in a Clinton or Trump first term.


Not in my lifetime.


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