The Federal Housing Finance Agency needs to be more forthright about its plans to expand the credit-risk transfer activities of Fannie Mae and Freddie Mac, according to a bipartisan group of lawmakers on the Senate Banking, Housing and Urban Affairs Committee. In a letter sent to FHFA Director Mel Watt this week, the six senators said the agency’s public guidance on the program “lacks specificity, metrics and long-term direction.” Watt and other FHFA officials have talked about risk transfers by the two government-sponsored enterprises, but most of the description of the program is somewhat vaguely outlined in the agency’s strategic plan and the so-called 2015 scorecard. The bipartisan group, which includes Sens. Mark Warner, D-VA, and Mike Crapo, R-ID, urged...
A large decline in interest rates in the past year created millions of refinance opportunities for lenders, according to industry analysts. However, prepayment risk on MBS backed by Fannie Mae, Freddie Mac and Ginnie Mae appears to be decreasing as interest rates increase. As of the end of April, 7.0 million borrowers were likely to both qualify for and benefit from refinancing, according to Black Knight Financial Services. That was up from 4.5 million potential refi borrowers a year ago as interest rates on 30-year fixed-rate mortgages declined by 70 basis points in that time, according to Freddie’s Primary Mortgage Market Survey. “This is...[Includes one data table]
Securitization rates for newly originated home mortgages remained at historically low levels during the first quarter of 2015, according to a new Inside MBS & ABS market analysis. The ratio of new MBS issuance to primary-market mortgage originations was just 71.6 percent during the first quarter. That’s down from 75.4 percent for all of last year and the record high of 88.8 percent back in 2009. The slowdown in securitization rates is...[Includes one data table]
The average bid on the benchmark Fannie Mae 30-year 3.50 percent MBS fell to 102.2 this week compared to 104.5 earlier in the month, leaving some market watchers feeling sick to their stomachs. The general fear is that MBS prices may fall further over the short term as interest rates rise. The question for many boils down to the basics: Where will mortgages settle? As Inside MBS & ABS went to press this week, the yield on the 10-year Treasury reached...
There is good news for investors in private student-loan ABS these days, according to the latest market intelligence from industry analysts. Student loan performance was healthy in the first quarter, and more growth is expected going forward. Continued strong performance trends were seen in repayment, delinquencies and charge-offs for private student loans through March 31, 2015, according to the semi-annual private student-loan performance report from MeasureOne, which was released earlier this week. Among the key findings, year-over-year delinquencies continued...
Originations of adjustable-rate mortgages declined in the first quarter of 2015 as interest rate trends continued to incentivize many borrowers to select fixed-rate mortgages. Some $41.0 billion in ARMs were originated in the first three months of 2015, according to estimates by Inside Nonconforming Markets, down 10.9 percent from the previous quarter and down 6.8 percent from the first quarter of 2014. Many of the mortgages are ... [Includes one data chart]
Lenders offering nonprime loans that do not meet the qualified-mortgage standard have run into difficulties generating volume because weak secondary-market demand has made pricing on the loans unattractive to borrowers. Jeff Lemieux, until recently a vice president at Bayview Asset Management, said volume in nonprime non-QMs is extremely weak across the industry. “The consumer is resistant to the pricing,” he said. Lemieux said credit-impaired borrowers feel that ...
Redwood Trust can now acquire jumbo mortgages of up to $1.5 million from members of the Federal Home Loan Banks under the Mortgage Partnership Finance Direct program. That’s more than double the previous limit – $729,750 – and will significantly expand the pool of potential mortgages that Redwood will acquire. Previously, MPF Direct targeted the narrow range of loans with balances between $625,500, which is the current high-cost conforming loan limit, and ...
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