Fixed-rate mortgages comprised most of August’s FHA production, which totaled $22.1 billion, up 13.2 percent from July and 37.9 percent from a year ago, according to an Inside FHA Lending analysis of FHA data. FRMs accounted for 98.9 percent of new loans with FHA insurance in August. In-house originations made up 79.6 percent of new endorsements while purchase loans accounted for 56.1 percent of FHA originations during the month. Wells Fargo is the only top FHA lender to exceed the billion-dollar mark. In fact, the bank reported $2.2 billion in new FHA originations, 76.0 percent of which were produced in-house. The purchase mortgage share of Well’s total FHA originations was ... [2 charts]

A proposed move by Fannie Mae to cap its loan purchases from new lenders and servicers contingent on the lenders’ net worth, among other factors, is rife with unintended consequences and should be examined closely before the company takes final action, say industry officials. A spokesman for the government-sponsored enterprise confirmed that Fannie is looking to change how it conducts business with “unfamiliar” lenders in response to the “significant contraction” among the correspondent buyers in the secondary market. The consequence of the contraction has led to growth in the number of lenders seeking to do business directly with the GSE. “Many of these newly approved lenders are...

The single-family mortgage market continued to shrink during the first half of 2012, registering the 13th consecutive quarterly decline in mortgage debt outstanding since early 2008. The Federal Reserve reported late last week that there were $10.028 trillion of single-family mortgages outstanding at the end of June. That was down 0.5 percent from the previous quarter and represented a cumulative 10.3 percent drop since March 2008. The supply of home mortgage debt fell to its lowest level since the midway point in 2006. There are two growth sectors, however. The supply of Ginnie Mae single-family servicing surged...[Includes one data chart]

Royal Bank of Canada this week issued the first covered bond registered with the Securities and Exchange Commission. The $2.50 billion transaction was backed by a pool of Canadian mortgages, issued in U.S. dollars and received AAA ratings from major rating services. The SEC registration allowed RBC to sell pieces of the covered bond to non-institutional investors in the U.S. “The sale of covered bonds to retail investors will modestly expand the investor base, in our estimate,” said Howard Esaki, global head of structured finance research at Standard & Poor’s. The covered bond has...

Waypoint Real Estate Group confirmed this week that it received a $65.0 million loan from Citigroup to finance rentals of real estate owned properties. Industry analysts suggest that the financing from Citi is the first for the emerging sector from the debt markets and securitization of REO rental proceeds is expected soon. Officials at Waypoint said they could issue an REO rental security fairly quickly. However, before the Citi deal they noted that they were seeing better terms from balance-sheet lenders than from REO rental securitization. The rating services have issued...

The most pressing concern of the Federal Housing Finance Agency’s efforts to develop a post-Fannie Mae and Freddie Mac secondary mortgage market infrastructure is engineering a state-of-the-art securitization platform that could be used by either company, as well as private issuers, the agency head noted during a speech last week. Speaking at the National Association of Federal Credit Unions Congressional Caucus, FHFA Acting Director Edward DeMarco said the agency’s “immediate priority” is a single, common platform, not a single government-sponsored enterprise security. “A cornerstone of what we are seeking to build is...

Banks and thrifts held a record $158.5 billion of non-mortgage ABS in their investment portfolios as of the midway point in 2012, according to a new Inside MBS & ABS ranking and analysis. The depository institutions increased their ABS holdings by 3.1 percent during the quarter, pushing them past the previous record of $154.9 billion at the end of 2009. Bank and thrift ABS holdings have jumped by 14.1 percent since the fourth quarter of 2011. The biggest chunk of bank ABS holdings is...[Includes one data chart]

The Federal Reserve’s plan to purchase an additional $40 billion in agency MBS per month, above and beyond the $25 billion to $30 billion the Fed has been buying, will primarily benefit the agency MBS sector but could also spur revitalization of the non-agency market, analysts say. The open-ended plan, in effect until the U.S. economy and employment picture show significant improvement, adds some $480 billion in annual demand for agency MBS, a market that is on track to produce about $1.5 trillion in gross issuance. “The pressure on asset values to richen further will be substantial,” said analysts at Bank of America/Merrill Lynch. The additional MBS purchases and ongoing principal investments will...

House Financial Services Committee member John Campbell, R-CA, last week introduced H.R. 6397, the Defending American Taxpayers From Abusive Government Takings Act, legislation that would prohibit the origination of taxpayer-guaranteed mortgages in jurisdictions of the country where the power of eminent domain would be used to seize mortgages. If Campbell’s legislation is enacted – which is unlikely in the few days remaining in the legislative calendar of the 112th Congress, but probably will be resurrected in the 113th – it could prove fatal to a controversial eminent domain mortgage seizure plan proposed in recent months by Mortgage Resolution Partners. MRP’s plan would involve...

The private-sector watchdog established by Congress to examine auditing firms recently found a number of mortgage-related issues with two major auditors. The Public Company Accounting Oversight Board raised concerns about the mortgage-repurchase reserves that KPMG signed off on and about fair value measurements allowed by Grant Thornton. The PCAOB reviewed 52 audits completed by KPMG in 2011 and found that the auditor failed to sufficiently test a mortgage-backed security issuer’s ...