Providers of third-party due diligence services for non-agency mortgages are considering standardizing portions of the review and reporting process, according to Fitch Ratings. The rating service hosted a roundtable with a number of due diligence firms this month and provided some details on the meeting last week. “Participants agreed that increased focus on consensus where appropriate benefits the market as it mitigates pressures that third-party review firms may be ...
As Congress works on legislation aimed at reforming the roles of the government-sponsored enterprises, provisions regarding practices in the non-agency mortgage-backed security market should be included in the legislation, according to the Securities Industry and Financial Markets Association. Kevin Chavers, a managing director at BlackRock, testified on behalf of SIFMA at a hearing this week by the House Financial Services Subcommittee on Housing and Insurance ...
Underwriting standards for the mortgages included in prime non-agency mortgage-backed securities in the third quarter were largely unchanged from the types of loans seen in the market the past year, according to a new analysis by Inside Nonconforming Markets. The average credit score on prime non-agency MBS issued in the third quarter was 770.3, down from 772.3 the previous quarter but up from 766.4 in the third quarter of 2016. Average debt-to-income ... [Includes one data chart]
Investors in jumbo mortgage-backed securities face relatively low exposure to potential losses related to fires in California, according to an analysis by Moody’s Investors Service. The rating service said 2.9 percent of the outstanding mortgages in post-crisis jumbo MBS rated by Moody’s are in counties affected by the recent fires. And while some borrowers may suffer losses because of insufficient insurance coverage, Moody’s said hazard insurance and servicers’ ... [Includes two briefs]
FHA and VA loan performance deteriorated during the third quarter of 2017, a period when the Ginnie Mae servicing market continued to expand. Ginnie had a record $1.749 trillion of single-family mortgage-backed securities outstanding at the nine-month mark in 2017, according to a new ranking and analysis by Inside FHA/VA Lending. That was up 2.2 percent from mid-year and 8.5 percent higher than September 2016. Ginnie servicing has been the fastest-growing part of the market for the past few years. That’s largely because Fannie Mae and Freddie Mac typically see more refinance business, which tends to churn the supply of servicing outstanding more than grow it. The VA side of the government-insured market again was the fastest-growing component, as the dollar volume of VA loans in Ginnie pools rose 3.7 percent during the third quarter. That was more than double the growth rate in the ... [Charts]
A Ginnie Mae/VA anti-churning task force is looking at a number of options to solve the rapid prepayment problem, which could include extending the seasoning requirement for all refinanced loans and prohibiting access to custom pools. A Ginnie representative declined to provide further details, adding that the task force is not ready to announce changes yet. “But we will take additional action soon, which we can do through program changes like we did last year,” he said. Ginnie issued guidance last year to curb aggressive refinancing of VA loans that underlie Ginnie mortgage-backed securities. The rapid refis have resulted in rapid prepayments to the detriment of investors with no clear benefits to VA borrowers. The guidance required six consecutive monthly payments before delivering a streamlined refi loan into a standard Ginnie MBS. The measure succeeded in stopping the ...
The Department of Housing and Urban Development and the Department of Veterans Affairs have taken additional steps to provide relief to homeowners in disaster areas hit by hurricanes Harvey, Irma and Maria. This week, the FHA issued policy waivers in storm-ravaged Puerto Rico and fire-stricken counties in California, allowing damage inspections to be completed beginning Oct. 24. FHA currently requires servicers to perform a damage inspection following the close of an “incident period” as determined by the Federal Emergency Management Agency. An incident period is the period For mortgages in disaster areas that have not closed or are pending endorsement, lenders must follow FHA’s guidelines on inspection and repair escrow requirements for loans in such areas. FHA believes that situations in certain jurisdictions in Puerto Rico and California have stabilized and further damage to ...
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