FHA single-family endorsements fell 55.6 percent in the first four months of 2014, compared to the same period last year, but the impact was far from uniform across the country. A new analysis by Inside FHA Lending, an affiliated newsletter, shows that housing markets where FHA loan limits were reduced this year have seen a bigger drop in FHA business than elsewhere in the country. In counties with lower FHA loan limits, production in the first four months of 2014 was down 57.7 percent from a year ago, while production in markets where there was no change fell 51.3 percent. FHA lending declined...
A federal judge last week granted limited discovery to a hedge fund representing a group of Fannie Mae and Freddie Mac shareholders as they challenge the government’s “net worth sweep” of their profits. But the court will keep a tight lid on public access to the documents in a nod to the government’s claim that a leak could have dire economic consequences on the mortgage market. Fairholme Capital Management has been pushing hard for discovery and access to internal government documents since the shareholder filed suit last summer demanding that the Treasury Department void its August 2012 Third Amendment to its preferred stock purchase agreement with Fannie and Freddie. In her ruling, Judge Margaret Sweeney of the U.S. Court of Federal Claims was...
As a way to keep a tight grip on counterparty risk, Freddie Mac will start conducting bimonthly “operational reviews of certain specialty servicers” later this year. Not to be outdone, Fannie Mae will also perform such reviews, but only when a seller/servicer reaches a “certain mortgage loan delivery threshold.” The news – contained in a recent report from the Inspector General of the Federal Housing Finance Agency – isn’t likely to warm the hearts of fast growing nonbanks. Both Nationstar Mortgage and Walter Investment Management are mentioned by name in the report, which voices concerns thatsome nonbanks pose a risk to the government-sponsored enterprises because they have “limited financial capacity” to make good on representation and warranty contracts. Nationstar and Walter are...
If JPMorgan Chase were to exit the FHA program, plenty of other residential lenders would pick up the slack, according to officials at the Department of Housing and Urban Development, who in a press briefing this week indicated the agency is hardly worried about such a development. “There are plenty of other lenders,” said one senior HUD official. “Their [JPM’s] volume has dropped. Quicken is now number one.” During an earnings call last week, JPMorgan CEO Jamie Dimon questioned...
New issuance of non-mortgage ABS dropped slightly during the second quarter of 2014 from the robust levels recorded in the first quarter of 2014, according to a new analysis and ranking by Inside MBS & ABS. A total of $49.14 billion of non-mortgage ABS were issued during the April-to-June cycle, an 8.0 percent decline from the first quarter of 2014. But new issuance remained...[Includes three data charts]
In the past two weeks, BlackRock has completed auctions of vintage non-agency MBS with a total unpaid principal balance of $8.1 billion. While the sales had the potential to push too much supply into the market, investor demand for the securities appears to have been strong. The market absorbed the first auction, for $3.7 billion in mostly subprime MBS from 2006, “without a hiccup,” according to analysts at Barclays Capital. Credit Suisse submitted winning bids on all of the non-agency MBS auctioned by BlackRock in the past two weeks, with most of the securities quickly being placed with other investors, indicating strong demand. Of the $3.7 billion in non-agency MBS auctioned last week, 96 percent of the balance was placed...
More than two years have passed since Bank of America parted ways with Fannie Mae on selling new purchase-money loans to the government-sponsored enterprise and no remedy seems in sight regarding a resolution to the matter. “There’s no change that I’m aware of related to the Fannie Mae situation,” said a spokesman for the bank. “We’re able to handle our loan origination business just fine with Freddie Mac.” According to figures compiled by Inside MBS & ABS, BofA did sell...
MBS from Freddie Mac backed by modified mortgages offer investors protection from prepayment risk in an environment in which interest rates are expected to climb, according to analysts at Barclays Capital. The analysts said Freddie’s H-pools are particularly attractive, as the loans in the deals have been restructured under the Home Affordable Modification Program. Slightly more than $1.0 billion in H-pools have been issued, with the most recent activity in October. Barclays noted that Freddie could significantly increase its issuance of H-pools as the government-sponsored enterprise has accumulated a substantial amount of modified mortgages in its retained portfolio in recent years. Freddie had...
Subprime auto lending is just about back to the levels seen before the financial crisis, with increased ABS issuance volumes, somewhat higher credit losses and more credit enhancement to offset declining ABS credit quality, according to new research from Standard & Poor’s Rating Services. While newer subprime auto ABS have more credit risk, ratings are expected to remain stable. During an S&P webinar this week, Amy Martin, a senior director at the rating service, pointed out...
RSS