Banks with major Ginnie Mae portfolios and even smaller firms increased their purchases of delinquent mortgages out of MBS pools in the fourth quarter compared to the third as a way to save money and refinance troubled loans. According to an analysis by Inside FHA Lending, the top 50 Ginnie Mae issuers bought $12.65 billion of problem loans out trusts in fourth quarter compared to $11.17 billion in the third, an increase of 13 percent. Once you buy the loan it goes into your portfolio, said Tim Rood, a partner in The Collingwood Group, a Washington-based advisory firm. You can try to re-perform it and then re-securitize it, he said. Wells Fargo, the largest Ginnie Mae servicer in the nation with a portfolio of $412 billion, purchased ... [1 chart]
The Federal Housing Finance Agency is mandating that Fannie Mae and Freddie Mac each enter into $30 billion of risk sharing transactions this year and move a little more quickly to reduce their $1.19 trillion of on-balance sheet holdings, including whole loans and non-agency MBS. The edict comes directly from FHFA Acting Director Edward DeMarco, who provided few details about the initiative during a speech this week to the National Association for Business Economics. DeMarco also announced that the regulator intends to set up a new government entity that will develop and manage the common MBS securitization platform thats been in the works for the two government-sponsored entities. One reason for pushing the GSEs to test drive risk-sharing structures is...
Billions of dollars in mortgage servicing rights have changed hands over the past two years and the selling is far from over. The question now is how much more will be sold by the end of 2013. According to analysts who cover nonbank buyers of MSRs and other sources $1 trillion to $1.5 trillion in rights could transfer over the coming 18 to 24 months, though some of that is in the form of subservicing contracts. Over the next year the figure could be...
Mortgage originations last year increased by some $435 billion from 2011 and virtually all of that gain came from refinance activity. Unless housing activity begins to grow significantly faster, mortgage lending volume appears likely to drop significantly in 2013. Prodded along by the suddenly successful Home Affordable Refinance Program, refi lending increased by $403 billion last year, a 41.9 percent increase over 2011. And although a number of indicators suggested that housing sales were beginning to firm up, home-purchase mortgage originations were up just 6.3 percent a gain of $32 billion compared to the previous year. In fact, purchase-mortgage originations have been...[Includes three data charts]
New issuance of agency single-family MBS fell 3.1 percent from January to February, according to a new Inside MBS & ABS analysis and ranking. On a combined basis, Fannie Mae, Freddie Mac and Ginnie Mae issued $153.4 billion in new single-family MBS last month. That was up 31.6 percent from February 2012 and compared favorably with the $138.5 billion monthly average issuance for all of last year. All of the decline came...[Includes one data chart]
Credit Suisse has adjusted the representations and warranties included in each of its recent non-agency MBS deals, reacting to criticism from investors that the reps and warrants do not meet models set by the American Securitization Forum. While the new jumbo MBS issued by Credit Suisse last week made some improvements on reps and warrants compared with its previous deals, the issuer continues to experiment with somewhat looser standards. Credit Suisse has introduced several new elements to the rep and warrant structure in recent securitizations which has caused some diverging opinions in the securitization community, according to analysts at Bank of America Merrill Lynch. While the ASF has provided a starting point with their model reps, it will likely take the market some time to find the right balance between investors and originators. Issuance from Redwood Trust has been seen...
The majority of the American Securitization Forums board of directors resigned recently and a number of significant members have quit the trade group due to concerns about governance of the ASF and bonuses paid to Tom Deutsch, the groups executive director. The problems stem from the ASFs abrupt separation from the Securities Industry and Financial Markets Association in early 2010. The separation and related negotiations from SIFMA have frankly been messier and more difficult than anyone expected, Deutsch said this week, indicating that while the groups separated in 2010 and appeared to operate independently, the split was never quite finished. We look forward to concluding those negotiations with SIFMA in short order and keeping our focus on the key tasks of meeting the looming implementation challenges of the Dodd-Frank Act. SIFMA officials refused...
An investor in Alt A MBS originally issued by Residential Capital Corp. filed suit this week to block Nationstar Mortgage from auctioning nonperforming loans from the MBS pools. Nationstar in mid February began auctioning NPLs on auction.com, according to the complaint filed in the Supreme Court of New York State this week. There are currently two additional auctions totaling some $750 million of NPLs listed on the internet auction site, both believed to be related to Nationstar. The company is...
MBS investors can expect fewer scratches and dents in non-agency MBS portfolios, according to a new analysis from Moodys Investors Service that says houses are less likely to lose value in a recovering market and modified loan recoveries are increasing as borrowers make more payments before re-defaulting. Part of the story is that the market is seeing higher recoveries for defaulted modified mortgages than for unmodified defaulted loans. Even though modifications on loans that were eventually liquidated in 2010 and 2011 exposed the properties to further price depreciation by delaying their liquidation, those modified loans on average still realized higher recoveries than did defaulted unmodified loans, analysts at Moodys said. This is because loan modifications, even failed ones, usually enable...