The Securities and Exchange Commission has charged three MBS traders with fraud for inflating the prices of MBS they bought from and sold to investors. Former traders Ross Shapiro, Michael Gramins and Tyler Peters allegedly defrauded customers to illegally generate millions of dollars in revenue for their ex-employer, Nomura Holdings International. As senior traders with Nomura’s residential MBS desk since 2009, the brokers arranged trades between customers, meaning that each would buy MBS from one customer and resell them for profit to another customer. As head trader, Shapiro arranged MBS and manufactured housing ABS trades. According to the SEC, the traders’ illicit pricing took place...
Servicing federal student loans would likely become more costly and cumbersome under a set of best practices recently issued by a White House-sponsored interagency panel. Back in March, the Obama administration assembled a group of officials from the Treasury Department, the Department of Education, the Office of Management and Budget, and the Domestic Policy Council to monitor trends in the government’s student loan portfolio, budget costs and borrower assistance efforts. As part of that effort, the task force was directed...
Freddie Mac’s Structured Agency Credit Risk deals and Fannie Mae’s Connecticut Avenue Security transactions have accounted for about 90 percent of risk transfers by the two government-sponsored enterprises. But the Federal Housing Finance Agency is pushing the GSEs to test new structures. FHFA said in a recent report that its longer term goal for the STACR and CAS products is for the GSEs to transition from debt issuance to credit-linked notes. That structure would be similar to enterprise debt issuances, but a trust would issue the note instead of the GSE. Principal and interest payments on the STACR and CAS debt issuances are...
Fannie Mae and Freddie Mac last month saw sharp percent declines in new issuance of single-family mortgage-backed securities, and they are capturing less of the conventional-conforming market.The two GSEs generated $65.94 billion in single-family MBS in August, down 20.8 percent from July, according to a new Inside The GSEs analysis. Monthly volume has seesawed through most of 2015, driven in part by how much seasoned-loan business they get. Most of the August decline in new issuance stemmed from a sharp drop in Freddie’s vintage-loan activity. After securitizing $8.00 billion of loans aged more than three months in July – most of them delivered by Bank of America – Freddie securitized just $99.6 million of such loans in August.
Commercial banks and thrifts continued to back away from the business of servicing home mortgages for other investors during the second quarter of 2015, according to a new Inside Mortgage Trends analysis of call reports. At the end of June, the industry owned the servicing rights on $4.187 trillion of home loans held by other investors, typically as a result of mortgage securitization. That was down $94.2 billion from the previous quarter, a 2.2 percent decline ... [Includes one data chart]
Improved production efficiency and a favorable outcome on hedges for mortgage servicing rights helped drive a significant increase in mortgage banking profits during the second quarter. The Mortgage Bankers Association reported that average net pretax income jumped 55.7 percent from the first quarter to $3.50 million in the second. That was the best pretax income figure since the first quarter of 2013, when the average in the MBA quarterly performance survey was ...
When autumn rolls around, most mortgage firms begin paring staff where they can and start focusing on what lies ahead for the new year. But this time around – thanks to the recent drop in rates – cost-cutting measures may be put on hold, at least for a little while. One area where there could be a spate of new hiring is in senior management positions. Rick Glass, who runs the mortgage recruiting firm RT Glass & Associates, Carmichael, CA, said his phone ...
Declines in negative equity and improvements to the economy have prompted a shift in the types of loan modifications offered by servicers. Industry analysts have raised concerns that the increased reliance on capitalization loan mods could lead to an increase in defaults. With a capitalization mod, servicers add unpaid mortgage interest and other costs to the unpaid loan balance and amortize the new balance, potentially with a new loan term or interest rate ...
In the years after the financial crisis, lenders have tried to limit the amount of repurchase demands from the government-sponsored enterprises by tightening underwriting requirements, according to an analysis by the Urban Institute’s Housing Finance Policy Center. The HFPC noted that the percentage of mortgages that Fannie Mae and Freddie Mac have put back to lenders due to violations of representations and warranties for originations in recent years ...
RSS