Fannie Mae this week nearly doubled the total output of the non-agency MBS market in 2011 with a new REMIC backed by FHA home-equity conversion mortgages. The government-sponsored enterprise provided a guaranty wrap on Mortgage Equity Conversion Asset Trust 2011-1, a $9.26 billion transaction backed by HECM loans originated and serviced by Bank of America. Through the first four months of the year, total non-agency MBS production came to just $9.98 billion – most of which were re-securitizations. Fannie said it intends to...
A revival in the non-agency MBS market may still be years away because of competing and seemingly contradictory government objectives for housing finance, according to a new analysis from Standard & Poor’s. The government is doing many things all at once to resuscitate the housing market and hasten economic recovery, but those efforts may actually place recovery on a slow track, said Erkan Erturk, an S&P research analyst and author of the report. Erturk concludes that the housing downturn drove the securitization market away from...
Mortgage investors are calling on federal policymakers to bring more transparency into the securitization process along with a host of other best practices in order to attract sorely needed private capital back into the mortgage marketplace. “Today, mortgage investors face enormous challenges in the capital markets due to opacity, an asymmetry of information, poor underwriting, conflicts-of-interests among key parties in the securitization process, as well as the inability to enforce...
Jumbo mortgages accounted for 7.7 percent of new loan originations in the first quarter of 2011, the highest share for the sector since 2008. A number of correspondent lenders have also expanded their jumbo programs in 2011. Some $25.0 billion in non-agency jumbos were originated in the first quarter of 2011, according to estimates by affiliated publication Inside Mortgage Finance. That was down 16.7 percent from the previous quarter, while overall originations declined by 35.0 percent during the period. The relative strength of the jumbo market increased...[Includes one data chart]
The FHA could lose 7 percent, or $2.8 billion, of its current business if loan limits are lowered this year, according to a government analysis of the impact of new lower loan limits going into effect in the fall. Barring congressional action, the temporary FHA loan limits will revert by statute to the lower loan limits determined by the Housing and Economic Recovery Act for loans insured by the FHA on or after Oct. 1. The FHA single-family loan limit, which is tied to the conforming loan limit, continues to start at $271,050 in low-cost areas and goes as high as $729,750 in high-cost areas of the country. On Oct. 1, however...
The House Financial Services Subcommittee on Housing, Insurance and Economic Opportunity will conduct another hearing on a Republican proposal to reform government mortgage programs and spur private sector participation in home financing. The Department of Housing and Urban Development, Ginnie Mae and the Rural Housing Services (RHS) will be asked to testify on the draft bill, the “FHA-Rural Regulatory Improvement Act,” which proposes reforms for the three agencies, enhanced lender enforcement tools, and return of private capital to the residential mortgage market. No date has been set for the hearing, and HUD has declined ...
A major direct endorsement lender has agreed to pay $1.2 million to the Department of Housing and Urban Development to resolve allegations that it failed to comply with FHA requirements in connection with 27 mortgage loans. U.S. Bank did not admit any liability or wrongdoing in its agreement to pay the settlement amount, although HUD claimed it lost more than $465,000 on poorly underwritten loans originated in 2003 and 2004. …
The U.S. Supreme Court did FHA lenders a small favor recently by limiting the use of evidence obtained from government sources in cases brought under the False Claim Act, lately the bane of mortgage lenders that originate government-insured loans and are accused of fraud and abusive lending practices. The opinion could discourage whistleblowers from bringing FCA lawsuits if they base their allegations not on their own experience but on information obtained through the federal Freedom of Information Act. In a May 16 decision in Schindler Elevator Corp. v. United States ex rel. Kirk, No. 10-88, the Supreme Court ruled ...
FHA originations in April totaled $15.33 billion, down 6.7 percent from March and 28.6 percent from the same period last year, according to Inside FHA Lending’s latest ranking of the top 50 FHA lenders. Fixed-rate mortgages accounted for the bulk of originations among the top lenders at 92.2 percent, while 67.3 percent of FHA lending in April was for home purchase mortgages. In the first quarter, government-insured lending fell significantly, as did all other sectors of the single-family originations market. FHA and VA originations dropped 24.0 percent during the period. Refinance loans accounted for... [Includes one data chart]
The volume of refinance originations may have dropped significantly during the first quarter of 2011, but refi transactions continued to account for a historically high share of new business, according to a new ranking and analysis by Inside Mortgage Finance. Lenders originated an estimated $235 billion in refinance loans during the first three months of this year, which represented 72.3 percent of all single-family mortgage production. That was one of the highest quarterly refi market shares ever, ranking behind the fourth quarter of 2010 and the first two quarters of 2009. Refi production volume was down 40.1 percent from the end of 2010, however... [Includes two data charts]
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