A recent research note from Sterne Agee predicts higher operating costs for Ocwen because of its ongoing regulatory disputes with the New York Department of Financial Services.
The Federal Reserve’s quantitative easing tapering will put a dent in Fannie Mae and Freddie Mac guaranty fee revenues, according to the Federal Housing Finance Agency’s Inspector General. The evaluation report issued by the IG last week concluded that as the central bank pulls back from the mortgage-backed securities market, interest rates will drift higher and the GSEs will do less business, meaning declining g-fee revenue.
FHFA’s Watt Promises a CEO for the CSP by Year-end. After a year of searching for a chief executive to lead Common Securitization Solutions, the Federal Housing Finance Agency is getting closer to picking a candidate for the job. Speaking at the annual convention of the Mortgage Bankers Association in Las Vegas last week, FHFA Director Mel Watt promised the industry that a CEO would be named by Dec. 31. The FHFA’s search firm is Spencer Stuart.
Together, Fannie Mae and Freddie Mac in September posted a combined increase in the volume of single-family mortgages securitized, according to a new Inside The GSEs analysis. Fannie and Freddie issued $64.1 billion in single-family mortgage-backed securities in September, a 4.9 percent increase from August. However, September’s MBS issuance was down 56.7 percent on a year-to-date basis.
The Federal Reserve’s Open Market Committee brought the latest installment in its quantitative easing programs to a conclusion this week, but the central bank will continue to reinvest principal payments back into agency MBS. The FOMC also reaffirmed the current 0 to 0.25 percent target range for the federal funds rate. “The committee anticipates … that it likely will be appropriate to maintain the 0 to 0.25 percent target range for the federal funds rate for a considerable time following the end of its asset purchase program this month, especially if projected inflation continues to run below the committee’s 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored.” And as usual, the Fed left...
A total of $51.18 billion of commercial mortgages were securitized during the third quarter of 2014 as the sector reached a new post-crisis high in new issuance, according to a new market analysis by Inside MBS & ABS. Commercial mortgage securitization rose 38.4 percent from the second quarter and represented the biggest three-month period in new issuance since the third quarter of 2007. For the first nine months of 2014, commercial mortgage securitization totaled $119.76 billion, down 24.4 percent from the same period last year. New issuance was off on a year-to-date basis because of the slump in production during the first half of 2014. Both sides of the market posted...[Includes one data chart]
Issuers of non-agency MBS should be able to price loans that don’t meet the standards for qualified mortgages at nearly the same levels as QMs, according to Andrew Davidson & Co., a firm that provides risk analytics on non-agency MBS. Non-QMs actually perform better than similar QMs in certain scenarios, as long as underwriting on the products is strong. Beginning in late 2015, non-QMs included in new non-agency MBS will trigger risk-retention requirements. Only mortgages that meet QM standards will be deemed to be qualified residential mortgages and exempt from risk retention. Interest-only mortgages appear...
Participants in the residential mortgage market were largely pleased with the risk-retention requirements finalized last week for certain non-agency MBS. However, the requirements, which also cover commercial MBS and other ABS, drew a wide range of criticism from others. “The short version is that the rule doesn’t require meaningful credit risk retention where it counts, and imposes significant market-shaping safe-harbor requirements where skin in the game isn’t so important,” said Adam Levitin, a professor of law at the Georgetown University Law Center. He noted...
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