The Consumer Financial Protection Bureau has issued its long-awaited qualified mortgage ability-to-repay final rule that, as expected, includes an exception for Fannie Mae and Freddie Mac mortgages and does little to facilitate a rebound in the non-agency sector. Mortgage lenders will be presumed to have complied with the ability-to-repay rule if they originate qualified mortgages that prohibit or limit the risky features believed to have harmed consumers in the recent mortgage crisis. That means...
New York Mortgage Trust recently completed two unique short-term securitizations backed by residential and multifamily mortgages. Officials at the real estate investment trust said the deals provide NYMT with greater funding flexibility for future loan purchases. Shortly before the end of 2012, NYMT issued a security with a three-year term to finance residential mortgages owned by the REIT with an aggregate market value of approximately $59.6 million. NYMT said it received gross cash proceeds of approximately $38.7 million before deducting expenses associated with the private placement. We believe...
Proponents of creating a covered bond market in the U.S. say the prospects of such a move have never looked better in the wake of legislative momentum in Congress, the off-year election year and the adoption of a covered bond framework in Canada. Last month, Canadas national housing agency announced details of the legal framework for the issuance of Canadian covered bonds. Under the framework, registered covered bonds will be issued through a program that will be run by the Canada Mortgage and Housing Corp. The Canadian framework will operate...
The final rule issued by the Consumer Financial Protection Bureau this week to define ability-to-repay requirements and qualified mortgages puts non-agency and subprime mortgages at a significant disadvantage to prime and agency mortgages. The slant against non-agency loans goes beyond what was required by the Dodd-Frank Act, according to industry analysts. The rule is set to take effect Jan. 10, 2014. Under the final rule, qualified mortgages must meet...
Sales of delinquent mortgages to nonbank servicers are expected to continue throughout 2013, according to industry analysts. The sale of $306 billion in mortgage servicing rights announced this week by Bank of America could be the largest transfer this year, but there appears to be plenty of remaining volume for established special servicers and expected new nonbank servicers. We believe that other banks with large MSR assets may also begin to complete sales or pursue other strategies to limit their size on bank balance sheets, Fitch Ratings said. Analysts suggest...
Nationstar Mortgage announced this week that it agreed to purchase $113 billion in non-agency mortgage servicing rights, as measured by unpaid principal balance, from Bank of America. The sale will more than double Nationstars non-agency servicing portfolio. Some $102 billion in agency mortgages are included in the sale, which priced at $1.3 billion. Walter Investment Management concurrently announced the purchase of $93 billion of unpaid principal balance in Fannie Mae-backed servicing assets from BofA. Ocwen Financial also reportedly bid...
Fannie Mae and Freddie Mac in 2012 combined for the third biggest year ever in single-family mortgage-backed securities issuance, according to a new Inside Mortgage Finance market analysis and ranking. Together, the two government-sponsored enterprises pumped out a whopping $1.266 trillion in new single-family MBS last year, a 48.2 percent increase over their total production back in 2011. It marked the biggest annual output by the two GSEs since they set the all-time record of $1.912 trillion back in 2003. Last years total came up just short of the second biggest annual issuance on record $1.270 trillion set in 2002. Heavy refinance activity was...[Includes three data charts]
The Consumer Financial Protection Bureau this week spread a huge safety net under the agency mortgage market, ruling that loans deemed suitable for Fannie Mae, Freddie Mac, the FHA and the Veterans Administration will be qualified mortgages that provide strong protection against litigation for mortgage lenders. The CFPBs long-awaited ability-to-repay final rule provides a safe harbor for loans that meet its QM definition and also are not considered higher-priced mortgages under an older Truth in Lending Act regulation promulgated by the Federal Reserve back in 2008. That rule classifies first mortgages as higher-priced if the annual percentage rate exceeds the average offered rate for comparable loans by 1.5 percentage points or more. Generally, the CFPB final rule defines...
Bank of America and Fannie Mae this week announced a multibillion dollar settlement of their longstanding dispute over outstanding and potential repurchase claims from the government-sponsored enterprise dating back through much of the last decade. The comprehensive resolution covers current and future repurchase obligations related to loans with an outstanding balance of $297 billion, as of Nov. 30, 2012, that were originated by Countrywide Financial and Bank of America and sold to Fannie from Jan. 1, 2000, through Dec. 31, 2008. BofA will make...
Now that Bank of America has inked a long-rumored deal to sell mortgage servicing rights on some $308 billion of distressed mortgages to Nationstar and Walter Investment Management, the question becomes how much more the bank may unload. The answer may be quite a lot. Paul Miller, an analyst with FBR Capital Markets, said that he anticipates the megabank will sell between $300 billion and $400 billion of MSRs by the time 2013 ends. According to Miller, the to be sold product includes $100 billion of Ginnie Mae servicing, $150 billion of Fannie Mae MSRs and $100 billion to $200 billion of Freddie Mac servicing. A BofA spokesman declined...[Includes one data chart]