The residential MBS issued in 2013 equaled 78.5 percent of primary market originations, the highest securitization rate since 2010, according to a new Inside MBS & ABS analysis. The mortgage securitization rate typically moves higher when primary-market originations are declining because of the time lag between loan closing and MBS issuance. Last year started with a bang – $560 billion in new originations – and ended with a whimper, $305 billion. In the conventional conforming market, Fannie Mae and Freddie Mac MBS issuance – even after excluding loans that were more than three months old when they were securitized – represented...[Includes one data chart]

For those of you tracking the lawsuits filed by GSE preferred investors against the federal government, one attorney told us this week that: “These cases won’t be resolved for years." Meanwhile, it appears that the CSP still has no CEO.

Bipartisan legislation in the Senate to reform the government-sponsored enterprises would maintain the high-cost conforming loan limits, according to a summary of the draft bill released this week. The bill signals a shift as other GSE reform efforts in Congress have contemplated a gradual reduction of high-cost conforming loan limits. Leaders of the Senate Committee on Banking, Housing and Urban Affairs announced this week that they reached an agreement on what will be included ...

Nationstar Mortgage joined Ocwen Financial last week under the glare of the New York Department of Financial Services’ spotlight. Ben Lawsky, superintendent of the NYDFS, said the state regulator has received hundreds of complaints about Nationstar’s practices, including problems with loan modifications, improper fees and lost paperwork. “Our department has significant concerns that the explosive growth at Nationstar and other nonbank servicers may create capacity issues ...

More lenders have expressed concern about a provision in the proposed FY 2015 federal budget seeking congressional authority to collect $30 million to help improve and strengthen FHA quality assurance reviews. Under the president’s budget proposal, FHA would collect an “administrative fee” from FHA lenders to implement the quality assurance (QA) changes needed to provide a clearer, more transparent picture of enforcement going forward. The improvements are meant to provide lenders not only information about early payment default or other kinds of default characteristics through loan sampling but also an accurate snapshot of their “manufacturing risk,” which is the risk that a loan is not underwritten properly. “The purpose is for lenders to have the information six to nine months after they have originated the loan as opposed to ...

The FY 2015 proposed budget is estimating a positive capital reserve of $7.8 billion for the FHA Mutual Mortgage Insurance Fund by the end of fiscal year 2014, meaning the fund will not require a mandatory appropriation from the Department of the Treasury this year, according to federal housing regulators. Last year, the president’s budget projected a $943 million Treasury subsidy to the FHA in order to meet statutory budgetary requirements but ended up requesting $1.7 billion by the end of fiscal year on Sept. 30. The latest independent actuarial audit found that the MMIF’s net worth has improved $15 billion from the previous year’s estimates, growing from negative $16.3 billion to negative $1.3 billion. In addition, the fund’s capital reserve ratio improved from negative 1.44 percent to negative 0.11 percent. The MMIF is now expected to ...

Ginnie Mae will begin scrutinizing issuers which, for reasons unknown, have not issued a single Ginnie Mae mortgage-backed security since obtaining their approval. Ginnie Mae President Ted Tozer said he is assigning staff to investigate the underlying cause of issuer inactivity. “We’re starting that process now to find out what their plans and objectives are to try to get a better handle on what’s going on,” he explained. With the growth in new issuers, agency staff has focused on making sure that newcomers are transitioning smoothly and are up to speed on what is happening in the mortgage securities market. But there are those that have remained inexplicably dormant. Tozer admits that agency staff is spread quite thin and the agency has been hiring more account executives lately to monitor all program participants to ensure there are not more early failures. New issuers typically go through a ...

Penalties in legislation that would restrict the use of eminent domain to resolve foreclosure problems could cripple state and local governments financially and provide no relief to property owners, warned the bill’s critics. H.R. 1944, the Private Rights Protection Act, would prohibit city and county governments that get federal funding for economic development from using their eminent domain powers to seize underwater mortgage notes from investors and unilaterally restructure the loans before selling them to other investors. Violators would be ineligible for federal economic development funds for two fiscal years following a court’s finding of guilt. The bill also provides the attorney general with broader enforcement authority. The necessity for legislation arose in the wake of efforts last year by certain municipalities in California to ...

The Chinese Year of the Horse welcomed the FHA with a hard kick in the head as total originations fell 20 percent in January from December 2013. Even as rising interest rates slowed refinancing activity last year, the expected increase in purchase-mortgage lending barely materialized and, in fact, appears to be dropping off. Lenders reported $8.7 billion in new originations in January, down from $10.9 billion in December and $23.7 billion from a year ago. Most were fixed-rate mortgages and 77.1 percent were purchase transactions. Three of the top five FHA lenders – Quicken Loans, JPMorgan Chase and LoanDepot – reported purchase origination totals below 40 percent. Top-ranked Wells Fargo and Bank of America each reported 64.0 percent of total FHA originations as purchase transactions. Wells Fargo closed the month with $519.0 million despite a ... [2 charts]

The FHA’s effort to shrink its presence in the mortgage insurance market to make room for private capital has benefited the private mortgage insurance industry, which has reclaimed some market share from its main government rival. This acknowledgement by private mortgage insurers during this week’s launch of a new MI industry trade association helped clarify the question of whether market stabilization or the FHA’s deliberate effort to reduce its participation in the market drove MI growth over the past three years. “If you think back, the FHA has been very vocal, particularly [Department of Housing and Urban Development] Secretary Shaun Donovan, about wanting to rebalance private MI participation in the market,” said Teresa Bryce Bazemore, president of Radian Guaranty and a member of the board of directors of the new trade group, U.S. Mortgage Insurers. “We saw our share of the market grow by more than 11 percent in 2013, and I think that is a ...