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]

Ginnie Mae President Ted Tozer is urging the FHA to find some flexibility in its loan-level certification proposal that would balance the need to protect the FHA from losses with lenders’ ability to lend without fear of consequences. Tozer said the controversial FHA proposal is trying to find a middle road between protecting the Mutual Mortgage Insurance Fund and making lenders feel confident that they are accountable only for the most egregious problems and not for small oversights or technical errors. “It is...

The FHA will consider stakeholders’ concern about its proposal to terminate a lender’s mortgage insurance contract for missing a yet-to-be-finalized deadline for filing claims, an agency official said. For now, however, the agency remains adamant about letting the provision stand despite stakeholder complaints about its severity, said Ivery Himes, director of the Office of Single Family Asset Management at FHA, during a panel discussion this week at the Ginnie Mae annual conference in Arlington, VA. She said missed deadlines are costly and are putting a strain on the agency’s resources. Himes blamed...

In an analysis of Fannie Mae and Freddie Mac loan-level loss data, Fitch Ratings concluded that while similar, there are differences between loss severities among loans with similar profiles. Fannie disclosed its loan-level loss data in late July to increase transparency to the market as it plans for an actual-loss credit offering in the fourth quarter. Fannie’s loan-level loss data was comparable to historical loss severities for its liquidated mortgages and the fixed loss-severity schedules used in its Connecticut Avenue Securities risk-transfer deals, said the Fitch report this week. All CAS risk-sharing transactions have passed...

Radian started offering two new mortgage insurance products this week, both of which include jumbo loans. The “super jumbo” product allows for loan-to-value ratios as high as 95 percent with a loan limit up to $850,000. The program requires a credit score of at least 720 and allows debt-to-income ratios as high as 43 percent. Radian’s Medical Professional Program is aimed...

Ginnie Mae securitized $14.2 billion of VA jumbo loans in the first half of 2015, more than double the volume seen during the same period a year ago. VA securitization data for the first six months reflect an upward trend in VA loan originations, which lenders attribute to better outreach to veterans and servicemembers and aggressive marketing strategies. VA jumbo securitization in the first half of the year was up 120.7 percent from the same prior-year period. Volume also was up 13.9 percent in the second quarter from the previous quarter. All top-five VA jumbo securitizers reported large gains year over year, but four showed volume decreases quarter over quarter. Third-ranked PennyMac recorded a 3.4 percent gain in the second quarter from the prior quarter. The top five, in sequential order – Wells Fargo, Freedom Mortgage Corp., PennyMac Corp., U.S. Bank and Quicken Loans – accounted for ... [ chart ]

FHA jumbo securitization continued to rise over the first six months of 2015 on the back of soaring FHA jumbo production in the second quarter. FHA jumbo originations in the second quarter more than doubled to $6.8 billion, according to the Inside Mortgage Finance database. FHA data showed that the jumbo share of originations was highest in conventional-to-FHA refinance (14.9 percent) and streamlined FHA refis (13.3 percent,) but just 9.0 percent for purchase loans. Delivery of FHA jumbos, including modified loans, into Ginnie Mae jumbo mortgage-backed securities rose 131.9 percent in the second quarter from the prior quarter and was up 115.8 percent compared to the first six months of 2014. Wells Fargo led the market in the first half with $1.4 billion in jumbos contributed to MBS, up 123 percent quarter over quarter. That was good enough for a 12.7 percent market share. PennyMac Corp. accounted for ... [ chart ]

Ginnie Mae securitized fewer rural home loans guaranteed by the U.S. Department of Agriculture in the second quarter of 2015 compared to the previous quarter, according to analysis of agency data. A total of $8.4 billion of USDA loans were securitized during the first six months of 2015, down 2.1 percent from the same period last year. Securitization volume also dropped by as much quarter over quarter. Chase led all USDA securitizers with $2.6 billion in loans securitized during the first half of the year for a commanding 30.4 share of the market. Wells Fargo funneled $1.1 billion in USDA loans into Ginnie MBS, resulting in a 13.1 market share, while PennyMac delivered $609.7 million for securitization. U.S. Bank closed the first half with $260.3 million in securitized USDA mortgages despite a 31.4 percent drop in the second quarter. Pacific Union Financial rounded out the top five USDA loan securitizers with ... [ chart ]

The FHA should make further adjustments to its latest loan-level certification proposal to fully achieve its aim of limiting lenders’ False Claims Act liability, according to an Urban Institute analysis. As drafted, the agency’s proposed measures to limit liability to errors that lenders can and should avoid appear to fall short of their objective, wrote UI Senior Fellow Jim Parrott. He urged the FHA to make the small changes needed to align the severity of penalties (indemnifications, huge settlements) with the gravity of the mistakes. Many FHA lenders have restricted their lending and imposed overlays partly because of uncertainty in how the agency enforces its underwriting rules. Lenders agree with the need for tougher enforcement against mortgage fraud and misrepresentations that have cost the FHA insurance fund millions of dollars in losses. However, even a minor mistake or a ...

A major player in the Home Equity Conversion Mortgage market has agreed to pay $29.6 million to resolve allegations of submitting false claims related to the servicing of FHA-insured reverse mortgages. According to the Department of Justice, Walter Investment Management Corp., through its mortgage subsidiaries, violated the False Claims Act by submitting false claims for debenture interest from the Department of Housing and Urban Development. A debenture is a type of debt instrument not secured by physical assets or collateral. It is backed only by the issuer’s general creditworthiness and reputation. HUD requires lenders to self-report curtailment of debenture interest if it misses any foreclosure deadlines. Under the HECM program, a loan becomes due and payable when the home is sold, remains vacant for more than 12 months or upon the ...