The Federal Housing Finance Agency’s proposal to prohibit captive insurers from joining the Federal Home Loan Bank system included generalizations and inaccuracies, and it overstepped rulemaking boundaries, according to real estate investment trusts. The FHFA issued a proposed rule in September that would prohibit captive insurance companies from joining the FHLBank system. At least seven REITs have used captive insurers to gain access to ...
Standard & Poor’s surveillance of seasoned non-agency mortgage-backed securities backed by jumbo mortgages and Alt A loans played a factor in the $77 million settlement the rating service reached this week with regulators. The Securities and Exchange Commission and state attorneys general for New York and Massachusetts largely focused their settlement with S&P on ratings for commercial MBS. Just $1.0 million of the settlement concerned surveillance of non-agency MBS ...
Kroll Bond Rating Agency updated the default and loss model the firm uses for non-agency mortgage-backed securities last week. Among other changes, the rating service reduced its loss expectations for purchase mortgages, reduced assumed timelines for foreclosures and formalized the penalty for mortgages with debt-to-income ratios above 45.0 percent. Titan Capital Solutions announced this week that it will purchase mortgages ... [Includes five briefs]
The half-percent annual premium reduction the FHA announced recently will likely enable the agency to reclaim the high loan-to-value segment of the mortgage market from Fannie Mae and Freddie Mac, according to analysts. Speaking with some originators that have been looking at the best way to securitize high LTV loans, Deustche Bank securities analysts said the lower FHA annual premium would put pressure on the government-sponsored enterprises to lower the cost of their guarantees. “The grapevine has anticipated for months that [g-fees] have little chance of going up and more chance of going down,” the analysts said. “But the specific risk triggered by the FHA move is that the cost of credit will now drop for high-LTV conventional borrowers.” Even before the FHA policy shift, private mortgage insurers have been pressuring the Federal Housing Finance Agency to ...
Production of loans with a VA guaranty was moderately strong in the third quarter of 2014, thanks to lower rates and increased demand for the no-downpayment loans, according to Inside FHA Lending’s analysis of the latest agency data. A 14.1 percent quarter-to-quarter surge helped the industry end last year’s first nine months with a total of $76.3 billion in VA loans, mostly purchase home mortgages taken out by a younger generation of war veterans. VA streamline refinancing also accounted for a substantial chunk of originations, 19.2 percent. Volume jumped from $19.5 billion in the first quarter of 2014 to $26.5 billion the following quarter. Lenders closed out the third quarter with $30.2 billion. Stanley Middleman, chief executive officer of Freedom Mortgage, said VA lending is on the upswing, driven by low interest rates. He thinks the VA home loan guaranty program has been ... [ 1 chart ]
Ginnie Mae will soon introduce the third prong of a strategy to improve its oversight of participants in its mortgage-backed securities program – a performance scorecard for issuers – and monitoring of its risk. Essentially a “scorecard,” the Issuer Operational Performance Profile (IOPP) will enable issuers to better understand and comply with Ginnie Mae’s expectations. It also provides a way for issuers to measure and improve their performance and compare it to the performance of their peers. Final testing and training for IOPP began this winter, with deployment expected “in early 2015,” the agency said. Issuers will be scored monthly based on a series of metrics. Each issuer will be rated against its peers by applying a weighting algorithm and, in some cases, adjusting for certain control factors. Each issuer will receive two scores: one for operational management and ...
Ginnie Mae Allows Rate-Change Dates in HMBS Annual ARM Pools. Ginnie Mae has decided to permit annual adjustable-rate Home Equity Conversion Mortgage pools to contain participations with different interest-rate adjustment dates. The participations in a pool must have the same adjustment date as the individual HECM loans to which they are related and an interest rate that adjusts on annual basis. In addition, participations must have a rate adjustment that will take place within 12 months following the month of pool issuance. This policy change is effective with Jan. 1, 2015, issuances and, thereafter, for both Constant Maturity Treasury and LIBOR index-based loan pools. Rescission Dates for Electronic Signatures/VA Guaranteed Home Loans, SCRA Requirements Extended. The Department of Veterans Affairs has extended the rescission date for ...
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