Increasingly worried about the financial condition of its largest nonbank issuers amid declining market conditions, Ginnie Mae in late October shot off a liquidity letter to 14 companies, asking them to develop contingency plans. The identity of the firms was not revealed to Inside FHA/VA Lending, but it’s no secret which companies rank among the top echelon of issuer/servicers. The five largest nonbank Ginnie MBS servicers as of Sept. 30 are PennyMac Financial Services, Lakeview Loan Servicing, Freedom Mortgage, Quicken Loans and Mr. Cooper. According to the letter, a copy of which was obtained by this publication, Ginnie wants the companies to develop strategies to right-size their operations. One of the agency’s goals is to lay the groundwork for financial stress tests that all issuer/servicers eventually must meet. Ginnie expects to sit down with the executive management teams of the ...
This week, Ginnie Mae issued an all-participants memo dictating new standards for firms seeking to become issuers, including the stipulation that applicants submit to a corporate credit evaluation. Ginnie said the financial exercise will be “similar to those employed by credit rating agencies.” The evaluation will determine whether an applicant is qualified to be an issuer or whether additional criteria should be imposed even if the basic standards are met. Applicants that rely on a subservicer arrangement will be scrutinized even more. The bulletin also notes that, effective immediately, the agency is implementing new notification requirements for MBS issuers engaged in “certain subservicer advance or servicing income agreements, which do not require prior Ginnie Mae approval, but can impact an issuer’s ongoing liquidity position and financial obligations.” While Ginnie currently permits subservicers to advance ...
VA mortgage originations fell significantly in the third quarter of 2018 due to a decline in purchase loans and a sharp drop in refinancing from the previous quarter. Rising interest rates and regulatory restrictions were mostly to blame, said lenders. VA production during the third quarter was $40.2 billion, down 21.0 percent from the quarter ago. Volume in the first nine months of 2018 dropped a mere 0.7 percent from the same time period last year. Purchase loans, which comprised 75.3 percent of VA’s guaranty business, were down 12.6 percent. On the other hand, year-over-year production increased 14.0 percent. VA refinance was down 39.0 percent from the second quarter and 18.1 percent on a year-to-date basis. The decline was fueled primarily by an 80.8 percent drop in VA streamline refis or Interest Rate Reduction Refinance Loans from the second quarter. IRRRL endorsements in the third quarter ... [Charts]
Waterfall Asset Management announced that it launched a residential mortgage conduit to focus on partnering with lenders to originate proprietary mortgage products under flow agreements. The conduit aims to purchase prime and near-prime mortgages with relatively high loan-to-value ratios. An affiliate of Caliber Home Loans is preparing to issue a $354.5 million nonprime mortgage-backed security, according to presale reports by DBRS and Fitch Ratings ... [Includes four briefs]
Strong demand in the secondary market for jumbo mortgages lifted Redwood Trust’s mortgage banking income during the third quarter even though the volume of loans it acquired declined. Redwood had $11.24 million in non-interest income from mortgage banking activities in the third quarter, up 5.9 percent from the previous quarter. The metric tracks Redwood’s loan aggregation and sales. The real estate investment trust’s jumbo conduit acquired mortgages with an unpaid principal balance ...
The latest jumbo mortgage-backed security from JPMorgan Chase differs significantly from others deals issued by the company. The $459.3 million MBS is stocked with mortgages that have relatively high loan-to-value ratios. The average combined LTV ratio for loans in JPMorgan Mortgage Trust 2018-LTV1 is 86.2 percent and nearly every mortgage has an LTV ratio greater than 79.0 percent. The average combined LTV ratio on prime non-agency MBS issued in the third quarter of 2018 was ...
Demand for non-agency products, including non-qualified mortgages, is growing among real estate investment trusts. A number of REITs have ramped up their investments in the non-agency sector, with some issuing mortgage-backed securities. Annaly Capital Management, the largest mortgage REIT, had $525.0 million in residential whole loans at the end of September, up from $392.0 million a year ago. The REIT didn’t disclose the total unpaid principal balance of its whole-loan holdings ...
A new poll being conducted by Inside Mortgage Finance/IMFnews shows that 47 percent of lenders are contemplating originating non-QM mortgages in 2019...
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