The assignee liability inherent in the Dodd-Frank Act and the CFPB’s ability-to-repay rule will keep institutional investors away from the non-agency mortgage-backed securities market, resulting in less credit availability for mortgages that fall outside the ATR’s qualified mortgage standard, John Gidman, president of the Association of Institutional Investors, told the Senate Banking, Housing and Urban Affairs Committee last week. The Dodd-Frank Act and the CFPB’s subsequent regulations create a path for a defaulting...

Last week, the Department of Housing and Urban Development came out with its own version of a “qualified mortgage” rule for FHA-backed mortgages based largely on the QM standard incorporated in the CFPB’s ability-to-repay rule early this year. Following the CFPB’s QM definition, HUD’s proposed rule defines both a safe-harbor QM and a rebuttable-presumption QM. HUD’s QM definition also incorporates the points-and-fees limitation scale from the CFPB’s final rule. “The significant departure from the CFPB’s definition is the way in...

Loan originators these days not only are looking over their shoulders, they’re also getting skittish about what lies ahead of them. Some of their backward-facing anxiety has to do with this summer’s CFPB suit against the nonbank lender, Castle & Cooke of Utah, and two of its top executives for allegedly paying bonuses to loan officers who steered consumers into mortgages with higher rates.During a recent special webinar sponsored by Inside Mortgage Finance, an affiliated newsletter, Jay Laifman, counsel with the Buckley...

Every component in the residential MBS market was down from the second quarter, and trending lower on a monthly basis, according to Inside MBS & ABS.

Starting in 2014, the FHLB will purchase conventional, conforming fixed-rate mortgages and FHA/VA products from its members, but some of the product will be funneled to Fannie Mae via the MPF Xtra program.

Certain members of the U.S. Senate want to see some type of analysis from FHFA on what impact lower loan limits will have on the housing and mortgage markets.

A steady decline in single-family agency MBS issuance led to a 13.8 percent decline in MBS and ABS production during the third quarter of 2013, according to a new Inside MBS & ABS analysis. A total of $388.53 billion of single-family MBS were issued during the third quarter, a 15.7 percent drop from the previous three-month period. It marked the lowest quarterly output for single-family MBS since the second quarter of last year, although year-to-date production was still up 9.0 percent from the first nine months of 2012. Every component in the residential MBS market was...[Includes three data pages]

Reforms seen in the new era of non-agency jumbo MBS issuance aren’t enough to prompt significant investor participation, according to John Gidman, president of the Association of Institutional Investors. At a hearing this week by the Senate Committee on Banking, Housing and Urban Affairs, Gidman and others called for a number of changes to the non-agency market. “The fundamental structural and process weaknesses for non-agency residential MBS securitization have not been fixed in the current private-label securities market,” Gidman said. “The issuance process itself is very opaque. Ratings continue to be shopped, issuers are still incentivized to water down representations and warranties, and continued variability in structures and documentation make the market more challenging for investors and raise the costs of funding.” He acknowledged...

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...