Activity in the non-agency MBS market involving nonperforming loans and re-performing loans is expected to continue to flourish through at least the end of this year, according to industry analysts. Vintage mortgages in scratch-and-dent deals accounted for 42.0 percent of the non-agency MBS issued in the first half of 2015, according to the Inside Mortgage Finance MBS Database. The $15.60 billion in scratch-and-dent volume included a mix of nonperforming loans and re-performing loans. Issuance of non-agency MBS backed by NPLs and RPLs through two quarters this year equaled...
A bipartisan pair of lawmakers from the House of Representatives found fault with the Obama administration this week for not making housing finance and reform of the government-sponsored enterprises a priority. Failing that, they’re not certain there would be enough support from both sides of the aisle to get a comprehensive bill pushed through the pipeline and signed by the president. “I don’t think the White House has sent a positive signal about participating in this process,” said Rep. Randy Neugebauer, R-TX, during a housing finance reform discussion in Washington, DC, this week sponsored by the Bipartisan Policy Center. “It’s such a big lift. You need to make sure that if you’re going down that road, that you have the opportunity to accomplish something.” His colleague, Rep. John Delaney, D-MD, agreed...
The average daily trading volume in agency MBS fell to $183.7 billion in June, the lowest reading of the year and another sign that all is not well for anyone who makes their living off of actual trading as opposed to being involved in new issuance. “There are a lot of people out there buying on credit and keeping MBS,” said Christopher Whalen, a senior managing director in the Financial Institutions Ratings Group at Kroll Bond Rating Agency. Whalen added...
Originations to first-time homebuyers perform worse than originations for repeat buyers, with the differences tied to factors beyond solely whether the borrower is a first-time homebuyer, according to new research from the Federal Housing Finance Agency. In a working paper published late last week, Saty Patrabansh, a senior economist at the FHFA, determined that the difference in performance between the first-time homebuyers and repeat buyers can be attributed to differences in the distributional make-up of the two groups and not to the premise that first-time homebuyers are an inherently riskier group. He analyzed...
The mortgage lending industry widely supports the Consumer Financial Protection Bureau’s proposal to extend to Oct. 3, 2015, the effective date of its transformative integrated-disclosure rule under the Truth in Lending Act and the Real Estate Settlement Procedures Act. But more needs to be done, say those who have commented on the planned delay. The American Bankers Association, for example, said, “Given the unique circumstances posed by the TRID rulemaking, the only way to realistically ensure an orderly transition to the new regulatory framework – and to guarantee uninterrupted service to consumers – is to institute a subsequent supervisory transition period that restrains enforcement and liability during a three-month period following the proposed effective date.” For a variety of reasons, the ABA urged...
The big gains in business volume at the FHA and the Veterans Administration reflect the two agencies’ differing missions, and officials at both organizations are looking at ways to improve risk management practices. Ed Golding, principal deputy assistant secretary at the Department of Housing and Urban Development, said the FHA dominates the market for high loan-to-value lending to borrowers with credit scores below 680. While some view 680 as borderline subprime, it’s the median credit score for the country, he noted during remarks at a symposium sponsored this week by the Urban Institute. “Risk management is...
Three leading Democrats in Congress are pushing the Department of Housing and Urban Development to re-issue a request for comments regarding potential changes to the HUD-92900-A form. HUD proposed the changes in mid-May to little fanfare, though the members of Congress warn that the proposal will create a loophole giving “Wall Street banks a free pass at taxpayers’ expense.” The May proposal from HUD involves certifications on the HUD/VA Addendum to Uniform Residential Loan Application form. HUD proposed removing a loan-level requirement that FHA and Department of Veteran Affairs lenders certify that they haven’t been convicted of a violation of federal or state antitrust statutes within the past three years. In a letter sent to HUD this week, Sen. Sherrod Brown, D-OH, Sen. Elizabeth Warren, D-MA, and Rep. Maxine Waters, D-CA, said...
For mortgage companies that were hoping to go public this year, they might as well forget about it. As one industry analyst put it: “The IPO market isn’t even on life support. It’s just plain dead.” Although many privately held mortgage firms are enjoying a strong year in both lending and profitability, the initial public offering market is dormant for three reasons: Nationstar Mortgage, Ocwen Financial and Walter Investment Management Corp. This year, the once “big three” nonbanks have paid...
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