Ginnie Mae reiterated its desire to enhance its MBS disclosures by moving towards a Freddie Mac disclosure model, but officials are not providing specifics or a timeline. During a telephone press briefing on the agency’s fiscal year 2011 results this week, Ginnie Mae President Ted Tozer said the plan to move toward loan-level disclosures is still in play and investors are being consulted regularly on the kind of disclosures they would like to get. “We want to make sure we are doing it in a controlled, prescriptive manner and we want the information that we provide to be superior and consistent,” he said. “We are also...

Recent non-agency mortgage loan modifications are showing better results compared to earlier private-label modifications despite a continued slowdown in new modification activity, according to a new Fitch Ratings analysis. While the number of completed modifications dropped, transactions completed in the past 18-24 months have improved slightly over earlier programs as a result of standardized guidelines, the recent Fitch report said. Patterned on the Home Affordable Modification Program, the standardized guidelines helped to focus attention on creating more sustainable modifications. These features included...

The Federal Housing Finance Agency and its wards, Fannie Mae and Freddie Mac, want to change servicer compensation to provide more resources for addressing nonperforming loans and try to reduce consolidation in the market, but MBS analysts remain concerned that fiddling with the current system could derail the to-be-announced market. “A big concern is that the TBA market for mortgages is very fragile,” said Jim Gross, vice president of financial reporting and public policy at the Mortgage Bankers Association. “Making radical changes could further rock the market.” The more radical proposal outlined by the...

Any proposed restrictions on asset-backed securities issuers, real estate investment trusts and other mortgage-related pools under the Investment Company Act would be harmful to the market and further restrict liquidity and capital formation, warned stakeholders. In comments to the Securities and Exchange Commission’s possible amendments to Rule 3a-7 and Section 3(c)(5) of the ICA, most stakeholders noted that the two provisions have worked well through the years to distinguish asset-backed issuers from investment companies, address investor protection concerns and allow the growth and innovation of...

In today’s dramatically changed mortgage lending and regulatory environment, lenders must aggressively manage their originator compensation structures if they want to guarantee their compliance with all applicable laws and regulations, according to a top industry consultant. The first step is “to eliminate all incentive arrangements that pay commissions or bonuses based on any of the terms or conditions of the loans such as interest rates, demand features, prepayment penalties or proxies for these loan terms,” said Henry Oehmann, national executive compensation services executive director for Grant Thornton. Lenders...

Ratings by DBRS of new non-agency mortgage-backed securities will include analysis of several factors at the metropolitan statistical area level. The new rating methodology and loss model were released last week without substantive changes from the proposal the rating service issued in October. “The experience of the last decade has made it apparent that it is not credible to consider loan performance without factoring in house prices and unemployment rates,” DBRS said. ...

Non-agency investors will not support new mortgage-backed securities until lenders and issuers establish stringent standards for originations and securitization, according to industry participants. “You’re going to need something to convince people – at least in the top tier – that their credit risk is pretty low,” David Lukach, a partner and head of the U.S. structured finance group at PricewaterhouseCoopers, said at a discussion hosted by the Securities Industry and Financial Markets Association last week. ...

Agency residential MBS production bounced higher again in October, but the latest refinance boom – if it even qualifies as one – is still well short of the last cyclical high in late 2010. A new Inside MBS & ABS ranking and analysis reveals that $103.03 billion of agency single-family MBS were issued last month, a 7.0 percent gain from September. And October marked the third straight monthly increase after the agency MBS market hit a 30-month low back in July. Production in October still trailed the levels generated in the first two months of 2011, when the previous refi boom was...(Includes one graph and one data chart)

The proposed bill that would increase standardization and uniformity in the mortgage securities market – without Fannie Mae or Freddie Mac – contains many worthy components, but it needs more details and further tweaking, according to industry experts testifying at a House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises hearing this week. The Private Mortgage Market Investment Act, drafted by Subcommittee Chairman Scott Garrett, R-NJ, would create a heavily regulated mortgage-backed securities market made up solely of private entities that would function with no federal...

Fannie Mae, Freddie Mac and their federal conservator are trying to devise a new servicing compensation scheme without upsetting the to-be-announced agency MBS market that Wall Street dealers and Main Street mortgage lenders depend on. In a recent white paper outlining two alternatives for reforming servicing compensation so that more resources are available for distressed loans, the Federal Housing Finance Agency said “promoting continued liquidity” in the TBA market is one of its primary objectives. The agency also mused that a new servicer compensation system for the government-sponsored enterprises could...