Issuance of securities backed by servicer advance receivables has increased significantly recently and is expected to continue to grow, fueled by nonbank servicers and demand from investors. However, analysts at Standard & Poor’s warn that servicers are increasing their use of unconventional features and product types, which could increase risks for investors. S&P rated $7.8 billion in servicer advance securities from the second quarter of 2012 through the end of the first quarter of 2013, up from $7.7 billion from the two-year period ending in the first quarter of 2012. S&P said issuance is expected to increase as more and more servicing assets trade hands and servicers use securitization to fund their collateral acquisitions. Recent issuance has been driven...
Fannie Mae and IBM are working together on at least one big technology project: a new data center. But is the relationship about to go even further? Meanwhile, MBS issuance stayed hot in April.
The American Securitization Forum proposed a number of regulatory and legislative changes last week to increase non-agency activity. The proposed changes were prompted by recent meetings with members of Congress. “The proposals can be implemented in the short term to expedite the process of bringing private capital back to the mortgage market by incrementally reducing the government-guaranteed market well below the current 90 percent share,” the ASF said. The ASF called for reform of the ...
A bipartisan group of members of the House Financial Services Committee is coming to agreement on portions of pending legislation to increase non-agency activity. Rep. Scott Garrett, R-NJ, is set to introduce legislation shortly that has some support from Rep. Maxine Waters, D-CA, the ranking Democrat on the committee. Garrett’s “Private Mortgage Market Investment Act” was approved on a party-line vote by the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises ...
In response to concerns from industry participants, the Consumer Financial Protection Bureau recently issued proposed clarifications to its ability-to-repay and servicing rules. The proposal includes changes to underwriting standards for non-agency “qualified mortgages.” The debt and income ratio standards for non-agency QMs were included in Appendix Q of the ATR rule. The standards were largely based on the FHA’s underwriting process. “The bureau has received numerous inquiries ...
Changes at Fannie Mae in 2010 would have forced Third Federal Savings and Loan to adjust its underwriting standards if the company was to continue selling mortgages to the government-sponsored enterprise. Instead, TFSL decided to differentiate itself from other lenders and launched a non-agency ARM product. To manage interest-rate risk while serving borrowers that might have trouble qualifying for an agency loan, TFSL shifted from predominantly selling fixed-rate mortgages to Fannie before July 2010 to ...
Citi recently launched a program that allows borrowers to use their savings account to earn rewards which are paid against their mortgage balance. Citi said its “Offset Mortgage” will allow borrowers to pay off their loan more quickly. The program is available in the New York tri-state area. Borrowers must have a savings account with Citi and an automatic monthly debit for the mortgage payment from a Citibank checking account to participate. Citi said a borrower with a loan amount of ... [Includes four briefs]
The FHA paid out more in claims than it had collected in premiums and note and property sales as of Sept. 30, 2012, according to the Department of Housing and Urban Development’s quarterly report to Congress on the FHA Mutual Mortgage Insurance Fund. FHA disbursed $19.5 billion at the end of the third quarter last year mostly to pay claims and booked $16.7 billion in collections, resulting in an outflow of $2.8 billion, the report stated. Cash flows from operations over the last year covered 80 percent of default losses, the report noted. Premiums collected over four quarters ending Sept. 30, 2012, totaled ...
Wells Fargo will reportedly appeal a federal judge’s decision that a $25 billion agreement Wells and four other banks made with federal agencies and 49 state attorneys general last year to settle allegations of servicing malpractices does not make the banks immune to future claims under the False Claims Act. The Feb. 12 decision by Judge Rosemary Collyer of the U.S. District Court for the District of Columbia said that the landmark settlement she had approved in April 2012 does not release the from future False Claims Act claims the government may bring. Dating back to the U.S. Civil War, the FCA provides for treble damages for fraud that results in ...
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