The Federal Housing Finance Agency is toying with the idea of “grandfathering” current captive insurance affiliates in the Federal Home Loan Bank system, while blocking out others, according to industry observers tracking the matter.If the FHFA does so, it would benefit mortgage-backed security investing real estate investment trusts that gained entry through a captive. A few years back, REITs found a loophole in the FHLB membership rules and exploited it before the FHFA put a moratorium on captives joining the system and requested industry comments on the captive angle and other membership rules. The moratorium expired in early 2015 and the 11 regional FHLBs once again began allowing REITs and others – via their captives – to join the system.

As rumors ran rampant over the past few weeks about the White House possibly looking to end GSE conservatorship before a new administration takes reign, Treasury and White House officials said this week there are no plans in the works to recapitalize and release the GSEs. “None of us should be misled by the increasingly noisy chorus of the advocates of recap and release,” said Michael Stegman, the White House’s senior policy director for housing, speaking at this week’s annual Mortgage Bankers Association conference. He added that doing so would “turn back the clock on the run-up to the crisis,” which he said would be “bad judgment and poor stewardship of taxpayer’s interest.”

Mel Watt, director of the Federal Housing Finance Agency, dished on several GSE-related issues, including the common securitization platform and expanding access to credit, at the Mortgage Bankers Association conference in San Diego this week. After announcing last month that the CSP and single security will be launched in two stages, with no confirmation of an exact timeline yet, Watt said, “We realize that there is a degree of impatience and a desire to see all these efforts completed right away. While not in a position to give you specific dates right now, I can confirm that we plan to announce the Release 1 timeline in 2016.” He added that the FHFA also hopes to be able to announce the...

It’s been an active week of GSE announcements with new initiatives, partnerships and increased competition between the duo. This appears to be an acknowledgment that GSE reform is not anywhere in the short-term plan and Freddie Mac, along with Fannie Mae, are taking matters into their own hands to help right the market. Freddie unveiled a partnership with Quicken Loans to modify some of the underwriting guidelines on its low-downpayment mortgage program, Home Possible. While not many details were available, Brad German, Freddie’s spokesman, said, “We're at the start of a work in progress to jointly develop products specifically aimed at the housing needs of millennials, first-time buyers, the middle class and other eligible borrowers.”

The good news is that mortgage industry forecasters now see a much stronger originations market in 2016 than they did just a few months ago. But loan production is still expected to drop from 2015 levels. The consensus projection from economists at Fannie Mae, Freddie Mac and the Mortgage Bankers Association is that single-family mortgage originations will total $1.376 trillion next year. Back in May, the average forecast was $1.208 trillion. Estimates have ... [Includes one data chart]

Walter Investment Management recently reorganized its servicing operation, formerly known as Green Tree, and its production unit as Ditech Mortgage, and other nonbanks may be looking for a new identity as well. Nationstar recently trademarked the name “Mr. Cooper,” but the company isn’t giving out much information on the topic. According to a spokesman, Nationstar has trademarked “a couple of names” for “non-specific possible future uses.” However, one source close to ...

Fannie Mae, Freddie Mac and Ginnie Mae securitized $119.7 billion of correspondent-originated loans during the third quarter of 2015, a new Inside Mortgage Trends analysis reveals. That was up 8.6 percent from the second quarter. Meanwhile, broker production fell 10.6 percent during the third quarter. Brokered loans accounted for just 11.5 percent of agency mortgage-backed securities issued during the third quarter, down from 12.9 percent in ... [Includes one data chart]

A new study published by the National Bureau of Economic Research suggests that strategic defaults on mortgages are much less common than previously believed. The researchers with the Federal Reserve and two universities suggest that their findings have significant implications for servicers’ loss-mitigation techniques. The researchers used expansive data from the University of Michigan’s Panel Study of Income Dynamics survey from 2009 through 2011 ...

New research from FICO suggests that broader economic conditions have helped limit losses on home-equity lines of credit originated before the financial crisis. For years, analysts have warned about the risks posed by HELOCs after the loans hit 10-year reset periods, prompting payment shock for some borrowers as principal and interest is due as opposed to the interest-only payments that were initially allowed. The risk to banks is seen as particularly harsh because ...

Ongoing economic conditions and increasing regulatory scrutiny are creating challenges and opportunities for different players and segments, industry observers say, with the most successful opportunists likely able to snag greater market share while others get gobbled up by larger or stronger rivals. The current market environment of increased regulation is putting significant pressure on the largest banks and has created a growing opportunity for mainstream mortgage bankers ...