Fannie Mae and Freddie Mac continued to tap investor interest in credit-risk transfer transactions over the last week or so, with each company announcing another deal involving more support from various elements in the insurance and reinsurance sectors. Last week, Fannie announced it has completed its latest Credit Insurance Risk Transfer transaction, which shifts credit risk on a pool of loans to a panel of reinsurers. In CIRT-2015-3 which became effective Aug. 1, 2015, Fannie retained...[Includes one data table]

A memo issued by the Internal Revenue Service this year regarding the tax treatment for certain real estate mortgage investment conduits has been a boon for investors in nonperforming loans, according to William Cejudo, a partner at the law firm of Clifford Chance. At the recent ABS East conference sponsored by Information Management Network in Miami, Cejudo provided some background on Technical Advice Memorandum 2015-17007, which was issued by the IRS in May. The memo covered a life insurance company’s formation of a REMIC that held impaired non-agency MBS. “It’s...

Real estate investment trusts that have gained access to Federal Home Loan Bank advances don’t seem particularly worried that they will be kicked out of the system, at least not anytime soon. As for when the Federal Housing Finance Agency will issue a final membership rule that addresses the thorny topic, that’s a different matter. The FHFA formally proposed changes a year ago that would ban captive insurance companies, the vehicle through which all REITs have gained membership. Even though public comments were taken, no final rule has appeared. In some circles, the “no action” stance is being read...

Some have suggested that it’s no wonder that several mortgage company owners – including those who control specialty servicers – are contemplating selling their companies.

Add loan-originator compensation rules to the list of things hindering the origination of loans that fall outside the qualified-mortgage standard. Bob Magee, chief investment officer at Shellpoint Partners, said many loan officers and brokers are reluctant to work on non-QMs because the loans take more time to originate, often get rejected and yet tend to offer the same compensation as an agency mortgage. “If I have loan officers who are paid on a commission for ...

Sales of higher-priced mortgages – a proxy for nonprime loans – increased in 2014 compared with the previous year, according to an analysis by Inside Nonconforming Markets of data from the Home Mortgage Disclosure Act. Some $52.28 billion in higher-priced mortgages were sold in 2014, up 48.6 percent from the previous year. Sales to Ginnie Mae accounted for a large portion of the increase along with sales to other purchasers, including ... [Includes one data chart]

The planned $150 million non-agency mortgage-backed security from Angel Oak Mortgage Solutions and Nomura Securities might have been delayed due to issues involving representations and warranties, according to people familiar with the deal. The MBS was to be backed by nonprime non-qualified-mortgages and might be scrapped. Hudson City Savings Bank was hit with a consent order last week from the Consumer Financial Protection ... [Includes eight briefs]

Riding a wave of heavy purchase-mortgage activity, Ginnie Mae issuers produced a record $128.23 billion of single-family mortgage-backed securities during the third quarter of 2015, according to a new Inside FHA/VA Lending ranking and analysis. The third-quarter figure, which includes FHA home-equity conversion mortgage MBS, was up 6.5 percent from the second quarter of this year. The previous record was $125.68 billion, set back in the third quarter of 2009. Loan-level MBS data, which do not include HECMs and have truncated loan amounts, show hefty gains in purchase-mortgage activity that more than offset sharp declines in refinance business. The flow of FHA purchase mortgages jumped 37.7 percent from the second to the third quarter, and VA purchase mortgages were up 37.9 percent over the same period. Meanwhile, refinance volume fell ... [ 2 charts ]

Certain unidentified independent mortgage bankers are in talks with the Department of Housing and Urban Development over alleged False Claims Act violations, according to a top mortgage industry executive. Speaking recently on the Internet radio program “Lykken on Lending,” Dave Stevens, president of the Mortgage Bankers Association and a former FHA commissioner, said the lenders are quietly negotiating and have avoided media attention, so far. On air, Stevens said he and a “certain group of individuals had met with HUD Secretary Julian Castro” to discuss the FCA complaints. The MBA official said the use of the FCA – which allows for treble damages – represents an “extraordinary overreach” by the government that is threatening the overall FHA program. Stevens did not name the lenders are or say how many there are, but he did mention an ...

The Inspector General of the Department of Housing and Urban Development called for civil and administrative actions against loanDepot for allowing ineligible “gifts” on FHA-insured loans.Acting on a referral from HUD’s Quality Assurance Division, the IG focused on FHA loans originated by loanDepot that included downpayment assistance from the Golden State Finance Authority. A review of 75 loans endorsed from Oct. 1, 2013, to Jan. 31, 2015, determined that 62 loans involved gift funds that did not comply with FHA requirements. In addition, the privately held nonbank lender “inappropriately charged borrowers $25,700 in fees that were not customary or reasonable, as well as $46,510 in discount fees that did not represent the purpose of the fee,” the IG said. The IG blamed loanDepot’s overreliance on Golden State’s Platinum Downpayment Assistance Program as well as ...