Ginnie Mae is expanding its guidelines to clarify the amount of risk it considers acceptable for an issuer’s mortgage servicing rights portfolio and what administrative actions an issuer with excessive portfolio risk could face. The move is part of the agency’s continuous monitoring of issuer activity and MSR portfolios to ensure they are not putting issuers, investors or the program at risk. In its revised MBS Guide, Ginnie provides examples that fall outside of the acceptable risk parameters. Issuers deemed to carry excessive risk will find their participation in the MBS program greatly restricted, the agency warned. In addition, Ginnie may require offenders to recalibrate their high-risk portfolio to more acceptable risk levels, diversify their portfolio, or restrict their participation in Ginnie’s co-issue program, Pool Issues for Immediate Transfer (PIIT) and/or multiple pools. Ginnie is urging issuers to review the ...

The Consumer Financial Protection Bureau last year logged 988 servicemember complaints related to the origination and servicing of VA and FHA mortgages. CFPB data showed VA outscored FHA on the number of complaints, 740 to 248, respectively, in 2017. The top five reasons for servicemember complaints were trouble during the payment process, difficulty in paying the mortgage, loan servicing, applying for a purchase mortgage or refinance, and closing a loan. Other complaints were about loan modification and foreclosure, mortgage brokers, incorrect information, settlement process and costs, underwriting/credit decision, credit-reporting company’s investigation of a consumer problem, and improper use of a credit report. Abusive practices related to loan churning might not be reflected clearly in servicemembers’ complaints in 2017 compared to the previous year, but a deeper dive into the ... [Chart]

The severe hurricanes that tormented a handful of markets during late summer of 2017 continued to push FHA default rates higher in the fourth quarter, a new Inside FHA/VA Lending analysis reveals. The number of FHA loans paying on time fell from 92.8 percent at the end of September to 91.9 percent at the end of the fourth quarter. Most of the deterioration took place in the more severe default categories. The number of FHA loans 90 days past due more than doubled during the three-month period, climbing to a hefty 0.92 percent of outstanding loans. And the number of FHA loans more than three-payments late increased by 39.7 percent, reaching 1.01 percent of the total outstanding. Three jurisdictions that bore the brunt of hurricanes Harvey, Irma and Maria – Texas, Florida and Puerto Rico – saw huge increases in FHA defaults. Puerto Rico saw a devastating impact in rising ... [Charts]

Ginnie Mae is expanding its guidelines to clarify the amount of risk it considers acceptable for an issuer’s Ginnie mortgage servicing rights portfolio and what could happen if the issuer violates those standards. The move is part of the agency’s continuous monitoring of issuer activity and MSR portfolios to ensure they are not putting issuers, investors or the program at risk.

Net income per share at Redwood Trust increased in 2017 as the real estate investment trust put an emphasis on expanded-credit mortgages and is poised to further diversify its residential mortgage activities. The real estate investment trust estimated that its net income per share will fall somewhere in the range of $1.57 to $1.63 for 2017, up from $1.54 per share in 2016. The REIT added that its average return on equity will be in the range of 11.6 percent to 12.1 percent in 2017 compared with ...

New Penn Financial recently introduced a new non-agency program that allows for non-qualified mortgages and alternative documentation, among other features. The SmartEdge product includes loan amounts up to $3.0 million, credit scores as low as 620, debt-to-income ratios up to 50.0 percent and loan-to-value ratios as high as 90.0 percent. New Penn is in the process of being sold to New Residential Mortgage, a real estate investment trust. SmartSelf allows ... [Includes two briefs]

The latest jumbo mortgage-backed security planned by JPMorgan Chase is smaller than other deals recently issued by the firm. J.P. Morgan Mortgage Trust 2018-1 will be a $463.7 million issuance. A similarly structured deal from Chase in December had a volume of $883.8 million, which followed a $911.0 million deal in October. All three MBS share similar characteristics, with Chase as the top contributor and loans that seasoned for an average of three months at the time of issuance ...

Nearly a year after an affiliate of Galton Funding issued its first expanded-prime mortgage-backed security, the firm is bringing a follow-up. The planned $316.9 million issuance is larger than the first deal from the firm and the MBS differ in some ways. Fitch Ratings and Kroll Bond Rating Agency placed preliminary AAA ratings on Galton Funding Mortgage Trust 2018-1. The deal will include credit enhancement of 10.75 percent on the senior tranche. The loans have a weighted-average credit score of ...

An affiliate of Invictus Capital Partners issued its latest nonprime mortgage-backed security this week and Deephaven Mortgage is preparing to close a deal. Invictus’s $249.0 million Verus Securitization Trust 2018-1 received AAA ratings from Morningstar Credit Ratings and S&P Global Ratings. Its senior tranche was supported by subordinated bonds equaling 37.5 percent of the deal. The loans had an average credit score of 700, an average combined loan-to-value ratio of 71.1 percent and ...

As earnings season got underway for publicly owned lenders, First Republic Bank, Flagstar Bank and Redwood Trust reported increased jumbo loan production in 2017. First Republic produced $11.57 billion of single-family mortgages in 2017, up 8.9 percent from the previous year. Jumbos account for a large majority of its lending. Flagstar originated $8.80 billion of jumbo loans last year, a 37.5 percent increase from 2016. And Redwood, which sources loans from correspondents, purchased ...