The Federal Housing Finance Agency and General Electric this week settled a lawsuit filed by the FHFA in 2011 regarding $549.0 million in non-agency mortgage-backed securities purchased by Freddie Mac. The settlement is the first on the FHFAs 18 pending non-agency MBS lawsuits. The terms of the settlement were not disclosed. Residential Capital agreed to pay $297.6 million to Fannie Mae this week, prompting the government-sponsored enterprise to drop its objection to ResCap ... [Includes four briefs]
Rule for Selling Government Mortgages to Fannie Mae Updated. Eligibility for delivery of mortgage loans backed by FHA, VA and the Department of Agriculture is now available on a negotiated basis only, Fannie Mae announced in a recent update to its Selling Guide (Announcement SEL-2013-01). The change is effective for all government loans, including whole loans sold to Fannie on or after May 1, 2013, and government loans in mortgage-backed securities with issue dates on or after May 1. Genworth to Delink Struggling Mortgage Insurance Operations from Holding Company. Genworth Financial plans to ...
Stringent appraisals have hindered home sales, limiting purchase-mortgage originations and constraining home prices, according to real estate agents responding to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. Appraisers counter that they are accurately pricing homes and cite burdensome regulations along with new requirements from lenders trying to avoid buybacks. In certain circumstances, appraised home prices have been set well below listing price, frustrating sellers that have received multiple offers. Appraisals continue to cause problems as the market is trying to recover value, but tight appraiser guidelines are not keeping up with the agreed sales prices between buyers and sellers, according to a real estate agent in Michigan. The sales-to-list price ratio has trended...
The non-agency jumbo MBS market in 2012 posted its best year since the cratering of the U.S. housing market and financial market collapse back in 2008, and increased regulatory clarity may spur the recovery further in 2013. A total of $3.46 billion of non-agency jumbo MBS were issued last year, according to a new ranking and analysis by Inside MBS & ABS. In the pre-crash years, that level of issuance didnt add up to a decent week in productivity. But last years prime non-agency MBS issuance was...[Includes three data charts]
The ability-to-repay qualified mortgage final rule released last week by the Consumer Financial Protection Bureau will likely impair access to and the cost of jumbo and nonprime mortgage loans, in spite of the market clarity and certainty it provides, according to many market observers. Wall Street MBS analyst Laurie Goodman and the rest of her MBS strategy group at Amherst Securities said the implications for jumbo mortgage is that loans with debt-to-income ratios greater than 43 percent will not be made by most lenders, as these mortgages will not qualify for QM status. The penalties for making non-QM mortgages can be...
Recent changes announced by the Basel Committee for pending capital standards will increase demand from private capital for non-agency MBS, according to industry participants, but some say the benefit may be muted. Last week, the Basel Committee adjusted the liquidity coverage ratio for Basel III capital requirements by expanding the definition for high quality liquid assets to include Level 2B assets. Among the assets newly eligible are certain residential MBS rated AA or higher, subject to a 25.0 percent haircut. The Basel Committee made...
Moodys Investors Service recently implemented a significant overhaul of its methods for assessing servicers of non-agency MBS, replacing criteria issued in 2001. Among other changes, the new standards expand the data sources Moodys will look at to include more timely figures from trustees and servicing performance for the government-sponsored enterprises. The analysis by Moodys includes monthly loan-level data from the servicer if provided on a timely basis, monthly performance data from the trustee when available, and GSE servicing data as needed. Previously, the rating service largely relied on loan-level portfolio data from servicers. The trust data is...
ReadyCap Commercial LLC, a startup based in Irvine, CA, issued its first loan approval a few days ago, and hopes to issue a commercial MBS by the fall. The companys forte is what it calls low balance commercial mortgages, including multifamily, office, industrial and retail properties. Its loan size menu ranges from $500,000 to $5 million, company CEO Steve Skolnik told Inside MBS & ABS. Skolnik, who until last June headed commercial services at Aurora Bank FSB, is...
During the next 12 to 24 months, investors should expect robust growth from the historically fragmented single-family real estate-owned-to-rental market as it emerges into an institutional asset class, according to analysts at Keefe, Bruyette & Woods. The KBW report noted that despite the markets traditionally limited funding source of capital retail or smaller institutional investors its horizons are expanding. Investor interest has increased...
Much attention over the last few years has centered on how best to help revive non-agency mortgage securitization. But recent advances in technology have enabled whole loan trading to emerge as a viable alternative that is filling some of the void left in the marketplace by less securitization. At least in the U.S. residential debt market, we are seeing a much larger market for the trading of whole loans, said Wyck Brown, president of Denver-based BlackBox Logic, a provider of loan-level data aggregation, analytics and consulting services. Large whole loan blocks can ...