November 16, 2017

Latest from Inside Mortgage Finance

Total mortgage securities outstanding rose by 0.8 percent from the previous quarter according to estimates from Inside MBS & ABS

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Conventional-Conforming Market Tapped into Surging Refi Business in 3Q17, Other Sectors Up

Conventional mortgages that meet Fannie Mae and Freddie Mac purchase guidelines remained the biggest source of new home lending during the third quarter, although other product types saw sol-id increases in origination volume as well.

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MMIF Value, Capital Ratio Decline in FY 2017 Due to Rising HECM Claims; Calls to Remove Program from Fund Increase

The Mutual Mortgage Insurance Fundís economic net worth and capital reserve ratio declined in fiscal year 2017 due to losses in the FHA Home Equity Conversion Mortgage portfolio caused by rising claims, according to the agencyís annual report to Congress released this week. While the fund remains above its minimum capital level, both the economic net worth and the capital ratio fell from levels at the end of fiscal 2016, the report said. Specifically, the fundís…

Publicly Traded Mortgage Firms Not Exactly Setting The World on Fire. Is a Major Shake Up Coming?

Most of the nationís six publicly traded mortgage firms have seen their share prices get smacked around this year. The exception is PennyMac Financial Services, a stand-out in a group thatís struggling to keep its head above water.

Feature Stories

Inside The GSEs

Freddie Swiped Some Market Share From Fannie in October MBS

Freddie Mac had one of its best months of the year in terms of new single-family business during October, notching a significant gain in its share of the GSE mortgage-backed securities market. In October, Freddie issued $34.61 billion of single-family MBS, a hefty 23.9 percent increase from the previous month. Meanwhile, Fannie Mae saw a sharp 11.5 percent drop in MBS production from September to October. Freddieís share of new GSE MBS issuance surged to 45.7 percent last month, its highest level since November of last year, when it spiked to 45.9 percent Ė and then abruptly fell to just 36.1 percent the following month.

Inside MBS & ABS

Mortgage REITs Boost Residential MBS Holdings In 3Q17, Fed Unwind Could Affect Dollar Rolls

Real estate mortgage investment trusts continued to build up their agency MBS investment port-folios during the third quarter, though most REITs had a more difficult time in the less-liquid non-agency MBS market.

Inside Mortgage Trends

As a Group, Publicly Traded Nonbanks Post Gain in Mortgage-Banking Income

Nine publicly traded mortgage companies posted a combined $52.22 million in mortgage banking earnings for the third quarter of 2017, according to a new analysis by Inside Mortgage Trends. The groupís third-quarter results represented a healthy 86.4 percent improvement over the paltry $28.02 million they earned from their core businesses during the April-June cycle. But the aggregate figures donít begin to describe the state of most of these nonbank ... [Includes one data chart]

Inside Nonconforming Markets

Issuance of Expanded-Prime MBS Gains Momentum, Ellington Enters Market

Issuance of expanded-prime non-agency mortgage-backed securities is heating up with a new participant in the market and a quick second deal from Redwood Trust. Ellington Financial is preparing to issue its first non-agency MBS, which will largely consist of non-qualified mortgages originated by LendSure Mortgage. Morningstar Credit Ratings and S&P Global Ratings assigned preliminary AAA ratings to the deal this week. ďEllington Financialís ability to access the robust securitization markets ...

Inside FHA/VA Lending

Correspondent Platforms Feast on FHA, VA Securitization Market

Correspondent-based lending operations are accounting for a growing share of the FHA and VA home loans pooled in Ginnie Mae mortgage-backed securities, according to a new analysis and ranking by Inside FHA/VA Lending. In fact, correspondent originations are the only production channel to see year-over-year growth in FHA and VA business through the first nine months of 2017. Retail and wholesale-broker production is down for both FHA and VA loans. Correspondent programs are most dominant in the FHA market, perhaps reflecting a preference among large producers to have recourse to a primary-market lender if the government later finds defects in how the loan was originated. Correspondents accounted for 48.7 percent of FHA loans pooled in Ginnie MBS during the first nine months of the year, up from 43.1 percent in all of 2016. Volume was up 1.7 percent from the ... [Charts]

Inside the CFPB

Ocwen Requests Oral Arguments in CFPB Case, Sans Trump DOJ

Ocwen Financial appears to be just as mystified as anyone else when it comes to understanding why the Department of Justice has not weighed in on the companyís dispute with the CFPB, as it had been invited to do. But that hasnít kept the nonbank mortgage servicer from asking the court to proceed with oral arguments. Late last month, Ocwen filed a supplemental motion with the U.S. District Court, Southern District of Florida, West Palm Beach Division, in favor of its earlier motion to dismiss the bureauís complaint against it. The purpose of the motion is ďto clarify the position of the United States [government] on the issue of plaintiff CFPBís structural unconstitutionality, in light of the inaction of the ...

Poll

With originations expected to drop in 2018, will your shop turn to non-QM/non-prime mortgage products as a way to bolster volumes?

Yes, definitely. We’re planning a launch.
No. It’s still difficult compliance/regulatory-wise.
Maybe. It’s under consideration.
Not now. But things could change as 2018 progresses.

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