With some federal agencies effectively downsized by the government shutdown, Ginnie Mae continues to guarantee MBS, but it’s unclear how long it can go on with limited staff and commitment authority. Under the shutdown contingency plan drafted by the Department of Housing and Urban Development, Ginnie has limited its operations to key functions fulfill its obligations to issuers and investors. The agency said MBS guaranties would be honored during the shutdown. While the rest of the workforce is on furlough, some 44 essential salaried employees will continue...
The secondary market for residential servicing rights returned to health this year, spurring new hopes that it could lead to securitizations of “excess” MSRs. But getting there could prove difficult. Mark Garland, president of MountainView Servicing Group, said mortgage firms that have amassed large holdings of MSRs would like to unlock the value imbedded in this esoteric asset. One way to do that is through securitization transactions. According to Garland, large banks – including Wells Fargo – have been quietly selling...
Fannie Mae remains on track to securitize $30 billion in multifamily loans this year, compared with nearly $34 billion in 2012, which would meet the FHFA scorecard target.
Non-agency MBS investors are still unhappy with how negotiations for the $25 billion national servicing settlement were handled and are concerned that the federal government will pull a similar move in settlement negotiations with JPMorgan Chase. John Gidman, president of the Association of Institutional Investors, said non-agency MBS investors weren’t involved in negotiations for the national servicing settlement and haven’t been involved in ongoing discussions regarding Chase. He said using funds from non-agency MBS to remedy allegations of inappropriate, unlawful or illegal behavior on behalf of an issuer or servicer makes it harder for investors to price risk. “This consequently makes...
Fannie Mae plans to issue a $675 million risk-sharing securitization in a transaction that likely will hit the market by mid-October, according to potential investors who were briefed on the government-sponsored enterprise’s plans. Market participants said Fannie has contemplated issuing two such transactions by year-end, but the company isn’t talking about specifics, at least not yet. Still, the GSE is laying...
While the Consumer Financial Protection Bureau has encouraged originations of non-qualified mortgages, industry analysts predict that such originations will begin slowly. Even before the QM and risk-retention requirements are implemented for non-qualified residential mortgages, few lenders have been willing to offer subprime mortgages. Originations of subprime mortgages will likely be non-QMs due to the higher interestrates required for subprime borrowers. According to a survey completed by Zillow, borrowers with credit scores under 620 who requested a quote for a 30-year fixed-rate mortgage were...
Potential investors have expressed strong interest in the pending risk-sharing deal from Fannie Mae and looking for tweaks in the structure recently used by Freddie Mac. Martin Hughes, CEO and director of Redwood Trust, noted that the real estate investment trust invested in Freddie’s Structured Agency Credit Risk transaction. He suggested two changes as the government-sponsored enterprises work to share risk with the non-agency market. Freddie’s STACR deal was structured...
Higher-priced mortgages accounted for a scant 1.0 percent of loan sales in 2012, according to an Inside Nonconforming Markets analysis of data from the Home Mortgage Disclosure Act. Originations of higher-priced mortgages increased slightly compared with 2011 but the growth didn’t keep up with the increase in overall originations. Higher-priced first liens have an annual percentage rate at least 1.5 percentage points above the average prime offer rate. Federal regulators use the metric as a proxy for subprime mortgages. Some $15.80 billion in higher-priced mortgages were sold...[Includes one data chart]
A year and a half after the $25 billion national servicing settlement took effect, attorneys general and the settlement’s monitor turned up the heat this week on the five banks participating in the settlement. Wells Fargo faces a new lawsuit, Bank of America settled similar claims, and all five servicers face additional testing standards and procedures, with BofA and Wells agreeing to even more stringent process improvements. New York Attorney General Eric Schneiderman, D, announced a lawsuit against Wells. He said consumer advocates have documented hundreds of violations to the settlement by Wells, including delays, lost paperwork and wrongful denials. BofA avoided...
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