Freddie’s program, which is called “Home Possible Advantage,” requires a minimum credit score of 660 for purchase loans, and 680 for "no cash-out" refis. This is only for manually underwritten loans.
New issuance of Fannie Mae, Freddie Mac and Ginnie Mae single-family MBS fell 13.7 percent from October to November, according to a new Inside MBS & ABS analysis of loan-level data. The three agencies produced $80.23 billion of single-family MBS last month, the lowest amount since June. November also marked the first monthly decline in new production after seven consecutive monthly gains that started in April. All three agencies saw...[Includes two data charts]
The relatively strong performance of mortgages in vintage non-agency MBS could be disrupted by interest rate resets and the expiration of interest-only periods, according to analysts at Fitch Ratings. Roughly half of all performing first-lien mortgages in non-agency MBS will be exposed to monthly payment increases during the next five years, Fitch said in a report released this week. The rating service determined that if a borrower’s monthly payment increases by 35 percent, the probability of default for the borrower doubles. “The product that’s going to be most affected is...
Non-agency MBS backed by nonperforming mortgages that include a program manager benefit from the unique oversight provided by the manager, according to Moody’s Investors Service. However, there are concerns that in some instances the program manager’s interests may conflict with those of senior bondholders. Moody’s said program managers typically set performance targets and monitor servicers’ progress at the loan level, adopt foreclosure strategies that reduce timelines and expenses and direct servicers’ loss mitigation strategies. The managers are more common on non-agency MBS backed by nonperforming loans than on non-agency MBS backed by newly originated mortgages. Program managers are...
Ocwen Financial, which has been under intense regulatory scrutiny most of the year, stopped buying delinquent loans out of Ginnie Mae pools during the third quarter, according to a review of loan-level data by Inside MBS & ABS. The cessation of buyouts is unusual and has some MBS analysts scratching their heads, wondering whether more trouble could be afoot at the nation’s largest nonbank servicer. According to a new report from Barclays, the reduction in buyouts by Ocwen (as measured by prepayments) “could be due...[Includes one data chart]
The Federal Housing Finance Agency should not wait for Congressional reform and should instead move at a deliberate pace to implement a single government-sponsored enterprise MBS, according to the Structured Finance Industry Group. SFIG staff and several members met with FHFA officials this week to discuss the potential transition to a single, common security between Fannie Mae and Freddie Mac. In August, the FHFA proposed...
Seven years after the financial crisis, market demand for non-agency residential MBS remains feeble, at best – mostly because of higher yields elsewhere, convexity risk concerns, bond liquidity and pricing and missing structural reforms, industry participants say. “Even with the modest amounts of RMBS issuance that we’re seeing, the market is still struggling to digest those securities. We saw that last year and in the beginning of this year. So the question is: what’s driving that lack of demand?” said Rui Pereira, managing director at Fitch Ratings, during a panel discussion at a residential MBS reform symposium sponsored by the Structured Finance Industry Group and Information Management Network in New York City last month. In advance of the public discussion, Pereira queried...
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