Fourth-quarter earnings reports from the four megabanks in the mortgage industry suggest that loan production activity and mortgage banking income fell slightly at the end of 2014. On a combined basis, Wells Fargo, JPMorgan Chase, Bank of America and Citigroup originated $88.7 billion in home mortgages during the fourth quarter of 2014, according to a new Inside Mortgage Trends analysis of earnings reports released this week. That total was down ...

New single-family business at Fannie Mae and Freddie Mac declined 2.1 percent during the fourth quarter of 2014, but you can’t blame it on mortgage brokers. The two government-sponsored enterprises securitized $20.53 billion of broker loans over the final three months of the year, up 3.7 percent from the third quarter, according to a new Inside Mortgage Trends analysis of loan-level mortgage-backed securities data. That gave broker loans a ... [Includes one data chart]

The U.S. Supreme Court this week denied a petition by major banks to reject a lower court decision to allow a National Credit Union Administration MBS lawsuit to go forward. The SCOTUS chose not to hear the case, a lawsuit filed by the NCUA to recover damages suffered by five now-defunct federal credit unions as a result of investments in non-agency MBS sold by the banks. The suit is...

The Federal Housing Finance Agency will unveil nonbank capital guidelines for servicers by mid-year. Also on the docket: Changes to loan level price adjustments..

Risk weights established by the Basel Committee on Banking Supervision for holdings of securitized assets won’t have much of an impact on U.S. banks, according to analysts at Barclays Capital. It’s unclear which banks the risk weights will be applied to and many U.S. banks have transitioned to similar methods to evaluate capital requirements for their holdings of MBS and ABS. The BCBS issued a revised framework for calculating risk weights on banks’ securitization exposures in December. The framework is set to take effect in certain countries beginning in 2018. It was issued to address concerns that banks were holding insufficient capital for certain securitized assets and to reduce the reliance on external ratings to derive securitization risk weights. Barclays said...

Even though modified loans represent a larger share of non-agency MBS trusts these days, structured product analysts at Wells Fargo Securities have detected a notable year-over-year decrease in modifications. To be sure, modified loans have become an increasing portion of such trusts lately. “About 62 percent of subprime in terms of [unpaid principal balance] has been modified, 39 percent of option adjustable-rate mortgages, 31 percent of Alt A, and 19 percent of prime,” the analysts reported. “Modification activity, however, has slowed down...

More than a year after issuing ratings for the first-ever single-family rental securitization, Moody’s Investors Service has issued its finalized approach for rating such deals. The rating service is also prepared to rate multi-borrower SFR transactions, a type of deal that has yet to be issued. Moody’s analysis of SFR securitizations was previously based largely on the approach the rating service applies to large loan commercial MBS backed by multifamily housing. The new criteria from Moody’s include...

Although Ocwen Financial is in regulatory hot water with California – a dicey proposition given the state’s importance to the mortgage industry – the nation’s fourth-largest servicer will continue with a strategy of non-agency MBS clean-up calls and Ginnie Mae buyouts. At least, that’s what company Executive Vice President and Chief Investment Officer John Britti told Inside MBS & ABS late this week. Britti confirmed continuance of the strategy, but declined to offer any new details or color. The big question, of course, is...

Fannie Mae and Freddie Mac had a stellar year for their risk-sharing transactions in 2014, selling off portions of the credit risk associated with $369.7 billion of MBS, greater than four times the $84.7 billion amount seen in the prior year, according to Fitch Ratings. Meanwhile, “performance of the transactions remains exceptionally clean,” analysts at Fitch said in a new report this week. The performance seen in 2013 was based...

Analysts are expecting Ginnie Mae prepayments to increase moderately in the wake of last week’s announcement that FHA is reducing its annual mortgage insurance premium by 50 basis points. Specifically, the annual MIP would be lowered 50 bps for 30-year fixed-rate FHA mortgages, although the new charges continue to vary depending on loan-to-value ratio and loan amount. Streamlined refinances of FHA loans endorsed before June 2009 are not covered by the new pricing, nor are 15-year FHA mortgages. The timing of the announcement reflects...