The Department of Justice this week announced a $7 billion settlement with Citigroup to resolve federal and state civil claims related to legacy residential MBS. Industry attorneys are warning that such gargantuan settlements might cause lenders to pull back further, making credit far less available to borrowers and causing economic recovery to falter further. The settlement includes...
A significantly bigger Ginnie Mae would be placed in charge of all MBS issued with a government backing while Fannie Mae and Freddie Mac would be wound down and stripped of their government sponsorship under a bill filed last week by House Democrats. The legislation – the Partnership to Strengthen Homeownership Act, H.R. 5055, sponsored by House Democrats John Delaney (MD), John Carney (DE) and Jim Himes (CT) – has zero chance of gaining traction this year. It would create a new Ginnie Mae MBS backed by conventional mortgages that would have the full faith and credit of the federal government while tapping private capital to absorb some of the risk. The new structure under the Delaney-Carney-Himes bill would create...
Industry reaction to the FHFA IG report on nonbank and small lender risk was swift. Maybe Fannie Mae is better off having Countrywide as its biggest customer again?
The characteristics of mortgages included in jumbo mortgage-backed securities remained strong in the second quarter of 2014, according to a new analysis by Inside Nonconforming Markets. However, the high quality of jumbo MBS has not attracted enough investors to make issuance more appealing for banks than retaining the loans in portfolio. Debt-to-income ratios on loans included in the $1.03 billion in jumbo MBS issued in the second quarter averaged ... [Includes one data chart]
Impac Mortgage recently launched a suite of products that don’t meet the Consumer Financial Protection Bureau’s standards for qualified mortgages. The non-QMs are available via the correspondent channel and are aimed at prime borrowers. The lender refers to its offerings as “Alt QMs,” including a jumbo option, a program for loans slightly outside of agency guidelines and a program that purposefully excludes analysis of a borrower’s tax returns ...
Redwood Trust revved up its latest jumbo mortgage-backed security in a hurry with plans to issue a new deal that includes some loans that don’t meet standards for qualified mortgages. The deal also includes less than 100 percent due diligence. The weighted-average loan age on the $306.05 million Sequoia Mortgage Trust 2014-2 is 1.4 months, according to Kroll Bond Rating Agency. The latest issuance from JPMorgan Chase included mortgages that were ...
Credit Suisse plans to issue a $367.84 million jumbo mortgage-backed security, according to a preliminary term sheet obtained by Inside Nonconforming Markets. The deal is scheduled to close around July 30. While presale reports on CSMC Trust 2014-IVR3 have not been issued, Credit Suisse expects that the deal will have credit enhancement of 7.25 percent on the AAA-rated tranches, according to the term sheet. Some 56 percent of the mortgages ...
Jumbo borrowers in the market for mortgage financing often decide to work with the bank they already have a relationship with, according to new qualitative survey results from the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. Real estate agents participating in the survey were asked what factors drive an affluent homebuyer’s lender selection when opting for mortgage financing instead of an all-cash home purchase. “I’ve found they like to ...
The Consumer Financial Protection Bureau’s request for comments on whether to allow for a right to cure on debt-to-income ratio issues for qualified mortgages prompted the typical divisions between lenders and consumer advocates. Lenders suggest that borrowers would benefit from the adjustment to QM standards, while consumer advocates warn that the change would weaken QM protections and encourage sloppy underwriting. The 43 percent DTI ratio standard for ...
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