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...

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]

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.

The U.S. homeownership rate fell to 63.9 percent in 2012, according to figures compiled by the Census Bureau through its “American Community Survey.” In case you’re keeping tabs, it’s the fifth year in a row that the rate has gone south.

Policymakers at Fannie Mae, Freddie Mac and the FHA need to work with lenders to identify and resolve sources of buyback risk uncertainty in order to loosen the market’s grip on tight credit conditions, according to a white paper issued this week by Moody’s Analytics and the Urban Institute. Disagreements over lender judgment calls, post-underwriting chances in circumstances and nitpicking over trivial mistakes by the two government-sponsored enterprises and the FHA have stepped up put-backs “in ways lenders cannot adequately address through better underwriting or pricing,” note paper co-authors Mark Zandi and Jim Parrott. In 2011 and 2012, Fannie and Freddie together required...

The home-equity market has been down so long it doesn’t take much to make it look like it’s looking up. Firming house prices in 2013 may be leading to a revival. The outstanding balance of home-equity loans, including home-equity lines of credit and closed-end second mortgages, continued to decline during the second quarter, dropping another 2.3 percent, according to the Federal Reserve. Since the end of 2007, the home-equity market has shrunk by 35.5 percent. Depository institutions hold...[Includes three data charts]

The FHA raised red flags late last week when it announced it will need to draw $1.7 billion from the Treasury, not because the agency’s claims-paying ability is at risk, but rather to comply with federal law requiring it to have reserves to cover anticipated future losses and mandatory capital reserves. The mandatory appropriation is an accounting transfer and does not reflect an up-to-date view of the FHA’s Mutual Mortgage Insurance Fund, its long-term fiscal health or its current cash position, said FHA Commissioner Carol Galante in a letter to Sen. Tim Johnson, D-SD, chairman of the Senate Committee on Banking, Housing and Urban Affairs, and Sen. Mike Crapo, R-ID, ranking minority member. The calculation used...

The Federal Housing Finance Agency has yet to show its hand on 2014 conforming loan limits for Fannie Mae and Freddie Mac, but that isn’t stopping elected officials from sticking their noses in the issue. In particular, a recent letter sent by 13 senators – 11 Democrats and two Republicans – addressed to FHFA Acting Director Edward DeMarco puts pressure on the agency to show what legal authority it has to declare new loan limits and requests a “quantitative analysis” on what impact it will have on “the economy and national and regional housing markets.” The 13 senators want...