Ginnie Mae is considering the implementation of stress testing for MBS issuers to see whether they can withstand the worst economic and financial market conditions. Over the next couple of years, Ginnie Mae will develop a framework for stress testing modeled after the Dodd-Frank Act’s supervisory stress testing currently required of bank holding companies, said Gregory Keith, senior vice president and chief risk officer, during a recent Ginnie Mae summit. The test will subject...

Wall Street remains concerned about the level of standardization of Fannie Mae and Freddie Mac operations in a single-security environment where investors would be expected to treat them as completely interchangeable. The Structured Finance Industry Group this week reiterated its concern about the Federal Housing Finance Agency’s plan to avoid “complete alignment” of the two government-sponsored enterprises’ operations. In a May 2015 update on the single security, the FHFA said it would carefully assess business decisions that could lead to different prepayment speeds, but that buy-out and removal policies at the two GSEs are essentially the same. That isn’t...

The mortgage refinance business began losing steam in the third quarter, but purchase-mortgage lending helped sustain agency single-family MBS production during the period, according to a new market analysis and ranking by Inside MBS & ABS. Fannie Mae, Freddie Mac and Ginnie Mae combined to issue $351.70 billion of single-family MBS during the third quarter of 2015, a slight 0.3 percent decline from the previous period. Even with the slowdown, year-to-date agency MBS volume of $976.40 billion had already topped the $929.49 billion in gross issuance for all of last year. The bright spot was...[Includes two data tables]

The results of a new survey conducted for NeighborWorks America suggest that student loan debt is an obstacle for a growing share of potential homebuyers. The congressionally chartered organization with a focus on housing counseling also found confusion among potential homebuyers regarding the mortgage market. Some 57 percent of respondents said student loan debt was an obstacle to purchasing a home, up from a 49 percent share last year. The survey involved 1,000 adults. And 76 percent of respondents with student debt said the homebuying process is complicated, up from a 70 percent share in 2014. The greatest obstacle for potential homebuyers continues...

The Federal Housing Finance Agency has skimped in its oversight of Fannie Mae’s and Freddie Mac’s budgets, in most cases not approving them until well after the start of the government-sponsored enterprises’ fiscal years, according to the Inspector General of the FHFA. The FHFA’s budget review and approval process for Fannie and Freddie is seriously flawed and plagued with cursory-level analysis and inadequate resources, the IG said. The agency generally agreed with the IG report and overhauled its budget-review process in July 2015. The IG noted...

Community banks continue to raise concerns about how regulations are hampering mortgage originations, according to the results of a survey by state regulators. While some community banks have ceased originations, lending data and forward-looking projections suggest that community banks have adapted to the post-crisis regulatory environment. The Federal Reserve and Conference of State Bank Supervisors released a report late last week detailing a survey of 868 banks with $10 billion or less in total assets. Single-family mortgages were named as a primary line of businesses by 69 percent of the surveyed banks in 2015, down from a 75 percent share last year. “Considerable variation in mortgage market conditions was reported...

An acquirer of mortgage servicing rights has agreed to pay $1.5 million and to stop committing further violations to resolve charges of misstating net income and misleading the Securities and Exchange Commission about its relationship with servicer Ocwen Financial Group. The settlement agreement between the SEC and Home Loan Servicing Solutions is the latest twist in the long-running federal and state investigations of Ocwen and its relationships with affiliated companies, which have included HLSS, Altisource Residential, Altisource Portfolio Solutions and Altisource Asset Management. The common thread in all five companies is...

While there may be some dispute in the industry regarding front-end versus back-end transactions, it’s clear that Fannie Mae and Freddie Mac credit-risk transfer programs are here to stay and will only intensify, according to Bob Ryan, the Federal Housing Finance Agency’s acting deputy director of the division of conservatorship. “The FHFA and the enterprises are committed to credit risk on a routine basis. It is not a pilot; it’s a routine part of our ongoing activity,” he said during a Bipartisan Policy Center seminar on mortgage finance reform. Ryan re-emphasized...

Fannie Mae and Freddie Mac this week announced a new “origination defects and remedies framework” designed to give lenders more clarity about underwriting problems that could lead to a repurchase demand. The framework sets three categories of loan defect: findings, price-adjusted loans and significant defects. Findings are negligible defects that had no effect on whether the loan was acceptable to the government-sponsored enterprise. The GSE will not require a price adjustment or other remedy from the lender, though it may request updated data regarding the loan. Price-adjusted loans are...

Over the past few months, the chief executive officers at two publicly traded mortgage firms and a private cooperative have departed, creating uncertainty in the market while underscoring what might seem obvious to some: It’s not easy running a mortgage business these days. CEOs heading for the exits – either on their own accord or via a management edict – include Jim Cutillo of Stonegate, Jeff McGuiness at the Lenders One Cooperative, and most recently Mark O’Brien, who headed nonbank lender/servicer Walter Investment Management Corp. And rounding out the “departure club” is...