The Structured Finance Industry Group put out the third edition of its RMBS 3.0 “Green Papers” initiative early this week, featuring dozens of model representations and warranties for new non-agency residential MBS, including a range of proposed standardized constructs. “This release substantially builds upon our growing series of Green Papers, which are aimed at restoring confidence to the ‘private label’ RMBS market,” the trade group said. The first and second editions were released in 2014. The 39 model reps and warrants included in the third edition complete...
The hedging results of Fannie Mae and Freddie Mac – including instruments bought to protect the value of agency MBS – had different results in the third quarter as interest rates unexpectedly declined and stayed low for several weeks. Overall, Fannie booked $2.6 billion of negative charges against the value of its derivatives in the third quarter while Freddie booked a much larger charge on its hedging activities: $4.2 billion. The differential did not pass...
The authors want the Treasury Department to end the quarterly profit sweep and allow Fannie and Freddie to raise about $100 billion in additional capital through several rounds of new common stock sales...
The Securities Industry and Financial Markets Association recently filed an amicus brief in support of the defendants to reverse a case in which the Federal Housing Finance Agency argued that Nomura Holdings sold shoddy MBS to Fannie Mae and Freddie Mac. In the case of FHFA vs. Nomura Holdings, a judge ruled in May, after a three-week bench trial, that Nomura and RBS Securities were liable for the claims brought by the FHFA and knowingly sold bad MBS to the government-sponsored enterprises before the 2008 financial crisis. The MBS were backed by mortgages with an unpaid principal balance of about $2.05 billion at the time of purchase. Nomura appealed...
The Federal Home Loan Banks appear to be eyeing a bigger share of the government-backed lending market with the announcement of a new servicing-release option for FHA, VA and rural housing loans sold into the Mortgage Partnership Finance program. The addition of a servicing-released option from Nationstar Mortgage, a top-10 mortgage servicer, to an already existing servicing-retained execution will give participating lenders greater flexibility in pricing and selling government-backed mortgages they have originated into the secondary market, said Matt Feldman, president of the Chicago FHLB. Previously, program participants were required...
The interim guidelines modify three key areas where lender-complaints have been common, including a revision to the calculation of the owner-occupancy ratio.
It would take a significant increase in interest rates to diminish bank demand for holding originations of jumbo mortgages in portfolio, according to industry analysts. Analysts at Bank of America Merrill Lynch said higher interest rates could eventually shift the economics in favor of banks securitizing their jumbo production and buying back the AAA tranches of the mortgage-backed securities rather than owning the whole loans on their balance sheet. “While it is tough to ...
Originations of nonprime loans that don’t meet standards for qualified mortgages are beginning to ramp up while still accounting for a small share of total origination volume. Impac Mortgage Holdings, one of the most prominent originators of non-QMs, has posted sharp growth since starting to offer the loans in the third quarter of 2014. Impac originated $48.0 million in non-QMs in the third quarter of 2015, more than double the $22.3 million in non-QM originations the lender had ...
Ocwen Financial continues to work toward satisfying regulatory requirements that would allow the nonbank to resume acquisitions of mortgage servicing rights. However, officials stress that MSR acquisitions aren’t the main focus for the company. “Right now, I don’t see in the marketplace a lot of opportunities for the kind of servicing transfers that would interest Ocwen and that’s why we’re focusing more of our efforts on generating new assets ... [Includes one data chart]
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