The sale of residential mortgage servicing rights (MSRs) tied to Ginnie Mae mortgage securities is gathering steam with a handful of large deals currently in the market. Bank of America recently held an auction for $22 billion of legacy Ginnie MSRs, according to investment bankers familiar with the offering. Final bids were being taken this week. A winner has yet to be declared. A spokesman for BofA told Inside FHA Lending that in general the bank does not comment on MSR sales, though it has made exceptions when unloading very large packages. Earlier this year, for example, it sold just over ...

Fannie Mae is lowering its maximum loan-to-value ratio to 95 percent come November, and there is speculation that the decision could force some of that business over to FHA. The policy change was confirmed by the GSE when it sent out an update to users of its automated processing program, Desktop Underwriter. It also means that mortgage insurers could lose business at a time when many have shown a new willingness to take on more credit risk amid improving delinquencies and earnings. Mark Goldhaber, a former executive at Genworth Financial, which owns an MI company, told ...

Originations of non-agency jumbo mortgages continued to increase in the second quarter of 2013, according to a new ranking and analysis by Inside Nonconforming Markets. The growth was fueled by banks offering highly competitive interest rates in an effort to retain jumbos in portfolio. Wells Fargo was the top-ranked jumbo lender through two quarters in 2013, by a wide margin. The lender had $21.87 billion in jumbo originations in the first half of 2013, accounting for 19.4 percent of ... [Includes one data chart]

Cancelled Furlough Days. The Department of Housing and Urban Development has reduced the number of furlough days from seven to five days due to progress made in achieving the $69.6 million spending cuts mandated by sequestration. In this regard, previously scheduled furlough days of Aug. 16 and Aug. 30 are cancelled. As the end of FY 2013 approaches, HUD is making significant progress towards reaching its sequestration target, without needing additional furlough days, said Deputy Press Secretary George Gonzalez of HUD’s Office of Public Affairs. Government-wide automatic spending cuts became effective ...

Federal regulators next week will propose a new version of the controversial rule setting risk-retention requirements for issuers of non-agency mortgage securities that are not backed by qualified residential mortgages. Among other significant changes, the new proposed rule will likely eliminate premium capture cash reserve account requirements, according to the American Securitization Forum. The Federal Deposit Insurance Corp. has a meeting scheduled for Aug. 28 to discuss ...

Two Harbors Investment is set to issue its first non-agency jumbo mortgage-backed security. The real estate investment trust is working on building its jumbo conduit operations, but in the meantime, Two Harbors plans to securitize mortgages it purchased from Bank of America. Two Harbors’ $434.17 million Agate Bay Mortgage Trust 2013-1 is set to receive AAA ratings with credit enhancement of 7.70 percent for the top-rated tranche. Mortgages to be included in the security have seasoned for ...

Fitch Ratings updated its loss model criteria for non-agency jumbo mortgage-backed securities this month, including new default estimates that vary by origination channel. Other rating services take the origination channel into account when rating new jumbo MBS, but not necessarily to the extent that Fitch has taken. “Fitch has determined that loans originated through a direct retail channel have a lower default risk than those originated through a broker, correspondent or wholesale channel,” the rating ...

Recent supervisory efforts by the Consumer Financial Protection Bureau have focused on “sloppy” servicing transfers and other loss mitigation issues. In a “supervisory highlights” review published this week, the CFPB said that between November 2012 and June 2013, it discovered several issues with servicing transfers that can cause borrowers to miss payments, delay important processes or affect the good standing of a borrower’s mortgage. The CFPB said its examiners found noncompliance with ...

With credit standards loosening somewhat, some commercial banks are listening to pitches from “private-money” lenders that are searching for warehouse lines, but so far it’s been a case of more smoke than fire. During the subprime meltdown of 2007, banks and Wall Street firms exited the nonprime warehouse sector and have yet to return. According to warehouse consultant Michele Perrin, several banks are willing to make warehouse lines on private-money mortgages, but only up to $5 million per deal ...

From the start of the Home Affordable Modification Program through the end of 2012, mortgages serviced for the government-sponsored enterprises accounted for the largest share of HAMP Activity. However, beginning this year, mortgages in non-agency mortgage-backed securities and loans in portfolio have overtaken GSE mortgages in terms of total HAMP activity. As of the end of the second quarter of 2013, non-agency mortgages accounted for 51.2 percent of the 1.21 million ... [Includes one data chart]