Nonbank seller-servicers continued to claim a larger share of Fannie Mae and Freddie Mac business during the booming second quarter of 2015, according to a new Inside The GSEs analysis.The two GSEs securitized $232.4 billion of single-family mortgages during the second quarter, up 22.3 percent from the first three months of the year. Freddie posted a bigger gain, 28.5 percent, than did Fannie (up 18.0 percent). Nonbank sellers accounted for 46.5 percent of loans securitized by the GSEs during the second quarter. They delivered $107.9 billion to Fannie and Freddie mortgage-backed securities during the period, up 24.7 percent from the first quarter. Among nonbank sellers, the biggest gain was posted by smaller and mid-sized mortgage companies, which accounted for 27.6 percent of GSE second-quarter business.

Guaranty fees as a whole have more than doubled since 2009, from 22 basis points to a record high of 58 bps in 2014, said the Federal Housing Finance Agency in a report released this week analyzing the fees. The 58 bps includes 15 bps of upfront loan-level pricing adjustments and 43 bps as part of an “ongoing fee.”Fees also jumped year-over-year as they were at 51 basis points in 2013. Two FHFA-directed increases in 2012 are the primary drivers for the sizeable increase from 2011, when the average fee was 26 bps, then rose in 2014. Higher fees have been met with strong resistance from originators...

The GSEs benefited from the Consumer Financial Protection Bureau’s free pass on the debt-to-income ratio requirements of the qualified-mortgage rule, resulting in a $132.9 billion increase in business.A new Inside Mortgage Finance analysis of mortgage-backed securities data illustrates that from the beginning of 2014 through the end of the first quarter of 2015, approximately 16.3 percent of the loans securitized by Fannie Mae and Freddie Mac had DTI ratios exceeding 43 percent. In the non-agency world, a qualified mortgage has to have a DTI ratio of 43 percent or less. While the government-insured market has its own QM rules that effectively ignore DTI, a loan eligible for sale to the GSEs is considered...

Residential MBS production continued to gain speed in the second quarter of 2015 while non-mortgage securitization remained strong, according to a new Inside MBS & ABS analysis. A total of $419.42 billion of single-family MBS and non-mortgage ABS were issued during the second quarter, an increase of 21.2 percent from the first three months of the year. It was the strongest new issuance total since the third quarter of 2013 and marked the fifth straight quarterly increase since the market hit a cyclical low at the beginning of last year. Most of the gain came from the agency MBS sector, which totaled $352.73 billion in new issuance, a gain of 29.7 percent from the first quarter. All three agencies posted hefty gains, with the biggest coming at Ginnie Mae, where new issuance jumped 46.7 percent to hit $120.36 billion. A lot of Ginnie’s growth is coming from an unusual surge of refinance activity, which accounted for ... [ charts]

Average MBS guaranty fees charged by Fannie Mae and Freddie Mac last year were 7 basis points higher than in 2013, but the government-sponsored enterprises were less profitable last year, according to the Federal Housing Finance Agency. The average MBS guaranty fee was 58 bps in 2014, the FHFA reported, up from 51 bps in 2013. Both components of the g-fee – the loan-level upfront fee (15 bps) and the ongoing annual fee (43 bps) were up from the year before. For several years, 15-year mortgages had been more profitable for the GSEs than 30-year loans, so the fee hike in December 2012 was designed to even them out by raising the fees more for 30-year loans. But instead of narrowing the gap, 30-year loans were even more unprofitable last year, the FHFA said in its annual report on g-fee pricing released this week. This biggest factor may have been self-inflicted as both GSEs ...

A pay raise windfall is coming for the CEOs of Fannie Mae and Freddie Mac as the Federal Housing Finance Agency revealed this week the removal of a pay cap and approval of a raise that could reach $4 million each in annual total compensation. The GSE executives, Timothy Mayopoulos of Fannie and Donald Layton of Freddie, each earn approximately $600,000 without bonuses. This amount was part of a salary cap initiated by the FHFA in 2012 in response to concerns voiced by lawmakers. The compensation increase announcements were disclosed in separate filings made by Fannie and Freddie with the Securities and Exchange Commission.

The New York Times Company filed a motion this week and is intervening in a case to have access to testimony pertaining to Edward DeMarco, former acting director of the Federal Housing Finance Agency, stating the government has failed to show good cause for sealing the documents. DeMacro, along with Mario Ugoletti, are both witnesses in the Fairholmes Funds v. The United States case and each testified in May. Ugoletti was a senior official with the Department of Treasury during the government bailout of the GSEs and is now special advisor to FHFA Director Mel Watt. The plaintiff in the case, Fairholme Funds, moved to have the “Protected Information” designation...

Access to mortgage credit is expanding, according to panelists at a real estate conference in Miami last week, albeit slowly, and some agree alternative scoring models are needed. Franklin Codel, executive vice president with Wells Fargo, said the company has expanded its credit parameters on FHA, Fannie Mae and Freddie Mac loans. “About 10 percent, maybe a little bit more, of the lending we’re doing today, a year and a half or two years ago would have been either an exception or outside our policy. We have expanded our credit box at Wells Fargo, and I think a lot of other lenders have done the same thing.”

A handful of former top executives in the mortgage departments of Goldman Sachs and Credit Suisse have launched Shelter Growth Capital Partners and hope to eventually purchase and then securitize mostly residential loans that don’t meet parameters of the qualified mortgage test. According to marketing materials provided to select originators and then passed on to Inside MBS & ABS, the Shelter Growth (or SG Capital) conduit will focus mostly on A-minus quality loans. A preliminary loan menu distributed this spring states that SG will purchase 30-year mortgages with FICO scores as low as 620. Loan amounts will range from $150,000 to $1 million. It also will finance consumers who went through a foreclosure as recently as two years ago. The coupons on the offering grid range from 5.75 percent to 9.00 percent. According to the marketing materials, SG Capital requires that all the mortgages be ...

Fannie Mae has done away with its Desktop Underwriter fee to encourage more lenders to take advantage of the tool. The GSE also has plans to introduce a new loan delivery interface in late 2015.Fannie said the new loan platform will provide lenders with “a more intuitive and easier-to-navigate user interface, enhanced reporting capabilities, and improved delivery edit messaging.” Fannie plans to provide guidance to customers on the new system in the coming weeks but said it’s being designed to help lenders deliver loans more efficiently and with greater transparency. Len Israel, president of mortgage banking with Flagstar Bank, said “Flagstar would welcome any new delivery system Fannie may have on tap to streamline processes without sacrificing quality.”