Some in the industry believe the GSE common shares are essentially worthless with the junior preferred falling into the category of being a speculative bet.
Total issuance of agency single-family MBS rose a scant 0.6 percent from March to April, according to a new Inside MBS & ABS analysis and ranking. All of the increase came from Ginnie Mae issuance, which rose 16.1 percent from March, hitting $36.30 billion in April. Things were different for the two government-sponsored enterprises: Fannie Mae saw a 3.4 percent decline from the previous month and Freddie Mac volume was down 13.0 percent. Ginnie fared...[Includes two data tables]
Officials at Fannie Mae, Freddie Mac and their regulator are encouraged by – but by no means satisfied with – the progress made by the government-sponsored enterprises and their customers at expanding the credit box. “We do see an expansion of credit, steady growth in the 97 percent [loan to value ratio] programs and a little better distribution of credit scores,” said Bob Ryan, special advisor and acting deputy director at the Federal Housing Finance Agency during remarks at the secondary market conference sponsored by the Mortgage Bankers Association in New York this week. “But they are still skewed to the higher end more than in the past.” Fannie and Freddie are trying...
Risk-retention requirements for MBS and ABS have been in effect for over a year, but industry participants are still grappling with how to comply with the standards, according to industry attorneys. Angela Ulum, a partner at the law firm of Mayer Brown, said industry practices and interpretations of the risk-retention requirements are starting to differ among different asset classes. During a webinar hosted by Mayer Brown last week, Ulum noted...
Fannie Mae late last month loosened its underwriting guidelines for borrowers with student loan and other types of debt, and is currently working on pilot programs aimed at helping consumers amass a downpayment. In an interview with Inside MBS & ABS this week, Fannie Vice President of Product Development and Affordable Housing Jonathan Lawless said the government-sponsored enterprise has “more to come” on loosening guidelines. Although he could not provide much in the way of detail, he said...
With domestic economic growth stagnating in the first quarter as consumer debt levels continue to climb, the Federal Reserve Open Market Committee this week opted to leave interest rates unchanged and to maintain the status quo when it comes to its agency MBS investment strategy. The Bureau of Economic Analysis put the rate of growth in gross domestic product at 0.7 percent, versus the 2.1 percent growth seen in the fourth quarter of 2016, suggesting that the economic recovery from the Great Recession may be getting long in the tooth. At the same time, on the consumer front, a new study from Northwestern Mutual found...
As industry participants continue to work on revamping standards and practices in the non-agency MBS market, Mark Adelson proposed a number of materiality standards for representations and warranties on new issuance. Adelson is an independent consultant and was S&P Global Ratings’ chief credit officer from May 2008 until December 2011. Adelson published his proposal in the latest issue of The Journal of Structured Finance, which he edits. Adelson focused...
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