While a number of structural issues continue to limit activity in the non-agency mortgage-backed security market, reform of the government-sponsored enterprises would dramatically help the sector’s recovery, according to officials at the Securities Industry and Financial Markets Association. “Issuers and investors are not likely to build the infrastructure necessary for a vibrant private-label securities market until they have a better understanding of how the government’s role ...

Increases to guaranty fees charged by the government-sponsored enterprises along with cross-subsidization policies could prompt bank lenders to shift more of their originations from the GSEs to portfolio. According to a report released last week by the Federal Housing Finance Agency, Fannie Mae and Freddie Mac charged an average g-fee of 60 basis points for 30-year fixed-rate mortgages in 2014, up from 55 basis points the previous year and ...

For the non-agency market, the impact of anticipated action by the Federal Reserve on short-term interest rates depends on whether interest rates on mortgages also increase, according to industry analysts. Industry participants continue to wait for the Fed to increase the federal funds rate and ponder the impact higher rates will have on originations and performance. “The effect of an interest rate increase on new residential mortgage-backed security transactions will ...

Servicers involved in national settlements are largely in compliance and making progress toward completing their loss-mitigation requirements, according to reports released in the past two weeks. Joseph Smith, the monitor of a settlement involving non-agency mortgage-backed securities that requires JPMorgan Chase to complete $4.0 billion in credited loss mitigation, said that as of the end of 2014, Chase was credited with $3.32 billion in relief ...

The Treasury Department didn’t meet key elements of federal guidelines for cost-benefit analysis when considering changes to the non-agency Home Affordable Modification Program that were implemented in November, according to the Government Accountability Office. In a report released last week, the GAO conceded that the Treasury isn’t required to follow cost-benefit guidance from the Office of Management and Budget when making changes to HAMP ...

Underwriting standards for jumbo mortgages tightened for the second consecutive month in June, according to the Mortgage Bankers Association. The MBA’s credit availability index for jumbos was slightly below the post-crisis peak set in April. The government-sponsored enterprises and Common Securitization Solutions announced this week that eight organizations will be included in an advisory group regarding the common securitization platform ... [Includes three briefs]

Ginnie Mae issuance of government-insured mortgage-backed securities rose a whopping 47.3 percent in the second quarter of 2015 from the previous quarter, powered by a robust FHA refinancing volume, according to an Inside FHA/VA Lending analysis of agency data. Government-backed Ginnie MBS production in the second quarter totaled $117.5 billion, up from $79.8 billion in the prior quarter. Volume year-to-date also increased by 57.7 percent from the first six months of last year. From May to June, government-backed securitization increased a modest 2.9 percent. FHA loans comprised 62.6 percent of Ginnie MBS issuance in the second quarter while VA accounted for 33.7 percent. Securitized loans with a Rural Housing Service guaranty represented 3.6 percent of total Ginnie MBS issuance during the period. FHA loan securitization was robust in the second quarter, as volume ... [ Charts ]

Rising home values could present a new opportunity for FHA borrowers to refinance into a conventional loan and enable those borrowers who choose to stay with FHA financing to take advantage of FHA’s reduced annual mortgage insurance premium, according to lenders. With house prices on the rise, FHA borrowers are seeing a build-up in equity. This might be a good time for them to remove that monthly payment and get out of their FHA loan, said Faramaz Moeen-Ziai, vice president of national sales and production at Commerce Home Mortgage in Huntington, CA. With an FHA-insured loan, coverage is for the life of the loan while private mortgage insurance on a conventional is cancellable when paid down to 79 percent of the loan amount. This might be especially beneficial to homeowners living in homes valued far less than what they owe on the property, or to holders of ...

Mortgage industry participants are finding a recently proposed FHA rule that would cancel coverage for late claim filings too harsh. “The penalty far exceeds the crime,” said a mortgage industry consultant, echoing sentiments of lender clients. Out for comment until Sept. 4, 2015, the proposed rule would require lenders to file a claim for a real estate-owned property within three months from the date they obtain title to the property or successfully sell the property to a third party. The requirement would apply to both pre-foreclosure sale and deed-in-lieu of foreclosure. The Department of Housing and Urban Development said the proposed rule would remedy the problem of delayed claim filings – lenders hoarding claim requests and filing them in batches at the same time. HUD’s goal is to process claims sooner and get more accurate data that are accurate for the next ...

The Department of Veterans Affairs has issued guidance to servicers regarding the use of an auction service in lieu of a foreclosure sale to terminate a VA loan. The goal is to get more from foreclosure-sale proceeds to lower the veteran’s mortgage debt. Mortgage holders may find it better to pursue VA loan termination through an auction service, rather than having to waive a greater amount at foreclosure, the VA said. It also may raise awareness among potential bidders and increase marketability and competition, the agency said. While traditional foreclosure methods have long been a part of the loan termination process, they limit servicers’ chances of obtaining greater proceeds at sale, which are applied to lower the veteran’s debt. Consequently, VA ends up paying more for a claim and assuming the liability of managing and marketing a conveyed real estate-owned property. In addition, state and county ...