While the FHA’s share of the primary insurance market has dropped significantly since premiums were hiked in early 2013, the VA program and the rural housing loan program run by the Department of Agriculture are going strong, according to agency officials. During a panel discussion at the Mortgage Bankers Association annual convention this week, VA and Rural Development executives said that both agencies have been quietly building mortgage market share. Jeffrey London, deputy director of the VA’s loan guaranty service, reported that purchase-mortgage VA loan originations were up 11 percent in fiscal 2014, with 40 percent of the business being first-time homebuyers. Of that group, 80 percent took no-downpayment VA loans, the biggest selling point in the program, along with its relatively low costs. In earlier remarks, Housing and Urban Development Secretary Julian Castro revealed that ...

Ginnie Mae this week provided new details to the long-anticipated plan for increased issuer net worth and liquidity and a new performance scoring method for issuer activity – changes that could adversely affect small issuers and portfolio servicers. In remarks at the Mortgage Bankers Association’s annual convention in Las Vegas, Ginnie Mae President Ted Tozer said the changes are part of a larger effort to ensure the continuing flexibility and availability of the agency’s mortgage-backed securities program to as many entities as possible. New types of issuers and counterparties have entered the agency-backed MBS market in the wake of the financial crisis, which called for adjustments and tailored approaches to the evolving housing finance market, Tozer noted. Tozer said both policy changes and staff expertise will ensure the success of ...

Officials at Five Oaks Investment said the real estate investment trust plans to continue its involvement in the jumbo mortgage-backed security market after aggregating some of the mortgages included in the $355.6 million JPMorgan Mortgage Trust 2014-OAK4. “This represents the culmination of our residential whole loan strategy that we have been implementing since last year, and we actively look forward to participating in additional transactions in the near future as our loan purchase volumes ...

Underwriting trends for jumbo mortgage-backed securities were mixed as of the third quarter of 2014, according to an analysis by Inside Nonconforming Markets. While some issuers started to include mortgages with higher loan-to-value ratios, average combined LTV ratios in jumbo MBS were actually higher for deals issued in the fourth quarter of 2013 than those priced in the third quarter of 2014. Average credit scores on issuance for the third quarter were ... [Includes one data chart]

It could take years for the non-agency mortgage-backed securities market to even approach the depth and liquidity it had before the housing meltdown, according to experts participating on a panel during the annual convention of the Mortgage Bankers Association this week in Las Vegas. The main reason non-agency MBS issuance does not amount to much is the huge bank demand for jumbo mortgages, said Tom Millon, president and CEO of Capital Markets Cooperative. Only about 77 percent of ...

The non-agency mortgage-backed securities market got clarity about risk-retention requirements in a new final rule approved this week by six federal regulators. Given current market conditions, it is unlikely to have any impact. The regulators created an exemption big enough to drive a truck through. Sponsors of non-agency MBS backed by qualified residential mortgages are not required to retain a 5 percent interest in the transaction. As expected, the QRM parameters were lined up with ...

A New York trial court judge has dismissed an investor lawsuit alleging fraud by Merrill Lynch in the sale of residential MBS because the plaintiffs failed to meet the state’s pleading standard for fraud claims. Justice Charles Ramos of the New York Supreme Court dismissed an amended complaint brought by Phoenix Light SF Ltd. and other investors against Merrill Lynch and several big banks. The complaint combined...

Although credit unions have boosted their share of new mortgage production in recent years, they continue to be only modest investors in residential MBS, a situation that isn’t likely to change anytime soon. According to figures compiled by Inside MBS & ABS, the credit union industry held $105.27 billion in residential MBS on its books at June 30, a 2.4 percent sequential decline. Compared to the same period a year earlier, their investment in mortgage securities fell by even more: down 4.8 percent. And that may not be such a bad thing. MBS prices were...[Includes one data chart]

The Federal Reserve’s decision late last year to taper its agency MBS purchases appears to have contributed to higher mortgage rates, which in turn has helped lead to “significant reductions” in Fannie Mae and Freddie Mac guaranty fee revenue on MBS issued so far this year, according to the Federal Housing Finance Agency’s Inspector General. The evaluation report issued by the IG late this week concluded that continued tapering by the Fed and the eventual reduction of its massive MBS portfolio could have an “adverse impact” upon the financial performance of the two government-sponsored enterprises. “Although the Federal Reserve’s [quantitative easing] programs benefitted the enterprises’ financial condition in 2012 and 2013, its decision, among other factors, in late 2013 to taper its MBS purchases contributed...