The only sector that has a higher securitization rate is the government-insured market, where Ginnie Mae production represented 98.5 percent of FHA and VA lending.

M&A specialists believe that some lenders obtain their Ginnie approvals merely for the purpose of increasing their franchise value without having solid plans to issue securities.

Regulators have been paying closer attention to the mortgage servicing practices of the large nonbank servicers, but they’re not the bad actors their critics make them out to be, analysts at Compass Point Research & Trading concluded recently. “Overall, we believe there is some merit to the operational concerns about portfolio growth for the special servicers, but the longer-term track record of the special servicers is strong and the near-term operational issues likely will be temporary,” the Compass Point team said.The analysts compared the servicing practices between the largest bank and nonbank mortgage servicers.

Coping with the potential for fair lending violations in the new qualified-mortgage world is a source of high anxiety for many compliance professionals in mortgage finance. But Gregory Imm, chief compliance officer and director of community affairs and fair lending and responsible banking at Fifth Third Bank, recently shared some lesser-known considerations that should increase industry representatives’ confidence in their compliance and readiness. Speaking to participants in a recent webinar sponsored by Inside Mortgage Finance, an affiliated publication, Imm said the first area is measurement. “Institutions need to establish key performance risk indicators of what should be measured, and not what is convenient to measure,” he said. “I say ‘convenient’ because those are the activities that are easy to measure because you have the data at your fingertips.”

Fitch Ratings just released its finalized criteria for analyzing loans securing non-agency residential mortgage-backed securities under the qualified mortgage standard and ability-to-repay rule. Fitch said it will require more credit enhancement to loans that do not benefit from the QM safe harbor protection. Second, credit enhancement will be based on pool probability of default, which projects the maximum number of borrower challenges, as Fitch expects borrowers will only make a claim that the lender violated the rule as a defense to foreclosure.

CFPB Deputy Director Steve Antonakes isn’t toning down his antagonistic stance towards mortgage servicers. Speaking at the National Community Reinvestment Coalition Annual Conference in Washington, DC, last week, Antonakes rattled the bureau’s sabre at the market sector again, saying, “We expect servicers to pay exceptionally close attention to servicing transfers and they should understand that we will as well. “Servicing transfers where the new servicers are not honoring existing permanent or trial loan modifications will not be tolerated,” he added. “Struggling borrowers being told to pay incorrect higher amounts because of the failure to honor an in-process loan modification – and then being punished with foreclosure for their inability to pay the incorrect amounts – will not be tolerated.”

The House Financial Services Committee late last week passed bipartisan legislation that would provide an alternate way of defining “rural” for purposes of the CFPB’s qualified mortgage standard so a bank could make its case to the bureau as to why a jurisdiction should be fit into that category. H.R. 2672 would direct the CFPB to establish an application process under which a person who lives or does business in a state may apply to have an area designated as a rural area for the purpose of exempting certain loans from the CFPB’s ability-to-repay rule if that area has not already been designated as such by the bureau.

How does the Johnson-Crapo bill favor senior preferred shareholders? The language notes that when assets in Fannie and Freddie are eventually sold, the idea is to “maximize the return for the senior preferred share-holders of the enterprises”…

The Fed has promised to “taper” its MBS and Treasury investments in the months ahead, but with MBS issuance on the decline because of falling originations, the central bank likely will maintain or even increase its market share of purchases.

In a 10-K filing, PHH said its mortgage business relies on just two firms for 41 percent of its private-label retail business: Merrill Lynch Home Loans at 29 percent and Morgan Stanley at 12 percent.