Participants in Ginnie Mae’s single-family mortgage-backed securities program may expect new policy changes, including servicer and credit ratings for the largest issuers, clarification of “appropriate sources of liquidity” and other financial requirements. The changes come as issuer liquidity continues to be a primary concern for Ginnie Mae, particularly with nonbanks now the dominant segment in the single-family MBS program. “We’re working on those policies right now,” said Leslie Meaux Pordzik, Ginnie’s acting senior vice president, Office of Issuer and Portfolio Management, at the Mortgage Bankers Association’s annual convention in Washington, DC, this week. Nonbanks account for nearly two-thirds of Ginnie MBS issuance and approximately 75 percent of FHA and VA lending. Nonbanks serviced a record 61.1 percent of outstanding Ginnie single-family MBS at the end of the ...

Ginnie Mae has made considerable progress in dealing with rapid prepayments on VA loans but prepayment speeds on Ginnie mortgage-backed securities in general continue to annoy investors. Prepay speeds on Ginnie MBS are now at the lowest since 2014 but it is not enough for agency Executive Vice President Maren Kasper to feel confident as she addressed the annual convention of the Mortgage Bankers Association this week. “Our prepayment issue is not solved,” said Kasper, as she spoke on a panel with representatives of government-lending programs. The agency continues to hear from investors about the problem, she said. Kasper cited two instances where Ginnie officials were summoned to meetings in China and New York to explain the prepayments to irate investors. They threatened to stop purchasing Ginnie bonds, she said. Kasper declined to say how bad the ...

Community mortgage lenders are asking the U.S. Senate to consider with caution before voting on legislative language passed recently by the House of Representatives to address “orphan” VA streamline refinance loans. Specifically, the Community Mortgage Lenders of America asked the Senate to step back and allow some time for substitute language to be presented with input from the industry and the Department of Veterans Affairs. At issue is the wording in H.R. 6737, the Protect Affordable Mortgages for Veterans Act of 2018. The bill fixes a technical issue that prevented VA lenders from pooling certain VA Interest Rate Reduction Refinance Loans in Ginnie Mae mortgage-backed securities pools. Approximately 2,500 VA refi loans were affected by an inconsistency between the loan seasoning guidelines issued by Ginnie in late 2016 and provisions in the ...

Bright’s Confirmation Delayed. With the Senate adjourning last week for the midterm elections, Michael Bright’s confirmation as president of Ginnie Mae will have to wait. President Trump nominated Bright, executive vice president and chief operating officer, last May and he was confirmed by the Senate Committee on Banking, Housing and Urban Affairs in August. Ginnie Mae has been without a permanent head since January 2017 when former president Ted Tozer stepped down. Bright has since been acting president of the agency. Both the House and the Senate will be back on Nov. 13 for a lame-duck session. President Trump Wants 5 Percent Budget Cuts from Cabinet Agencies. President Trump has directed his Cabinet secretaries to trim 5 percent from their respective agencies’ FY2019 budget request. Some agencies can do more than 5 percent, he suggested. It is unclear which of the ...

With loan production on the wane and profit margins thinning, warehouse lenders, financiers and even regulators are growing increasingly anxious about nonbank liquidity, a topic that received an airing at the annual convention of the Mortgage Bankers Association this week.

The average daily trading volume in agency MBS totaled $219.4 billion in September, a modest increase from the month prior, which marked a low point for the year, according to figures compiled by the Securities Industry and Financial Markets Association.

The creation of securitization structures to finance mortgage servicing rights was the most significant development for nonbank mortgage lenders in the aftermath of the financial crisis, according to Vandy Fartaj, CEO at PennyMac Financial Services.

Fitch Ratings is now giving a more detailed assessment of MBS due diligence firms. This week, the company introduced a tiered rating system to replace the previous designations used for classifying third-party reviewers conducting due diligence on new non-agency MBS.

Seasonal housing-market factors pushed GSE single-family mortgage business higher in the third quarter, according to a new Inside The GSEs analysis of mortgage-backed securities data.Fannie Mae and Freddie Mac issued $213.81 billion of single-family MBS in the third quarter, a 10.4 percent increase from the previous period. The gain came from a 23.4 percent surge in purchase-mortgage business, which offset a 15.5 percent downturn in GSE refi activity. [Includes two data charts.]

Private mortgage insurers appeared to gain market share in the third quarter of 2018 as purchase-mortgage lending surged in the agency market, according to an exclusive ranking and analysis by Inside Mortgage Finance. [Includes three data charts]