Rating services are divided on whether the income documentation used by Caliber Home Loans qualifies as full documentation. The differences are apparent in a pending $342.6 million issuance from Lone Star Funds, which is stocked with mortgages from Caliber. According to Fitch Ratings, Lone Star is the only current issuer of nonprime MBS to keep mortgages with nontraditional income-documentation out of its deals. The rating service said 99.4 percent of the dollar volume of the loans ...

Ginnie Mae issuers produced $36.68 billion of new single-family mortgage-backed securities last month, a modest 5.0 percent gain from July, according to a new Inside FHA/VA Lending analysis and ranking. Through the first eight months of the year, Ginnie issuance was down 11.0 percent from the same period in 2017. The MBS figures do not include FHA home-equity conversion mortgages, and loan amounts are truncated to the lowest $1,000. Purchase mortgages accounted for 75.6 percent of new issuance in August, although volume was up just 1.9 percent from July’s level. On a year-to-date basis, the purchase-mortgage share rose from 65.7 percent in 2017 to 70.0 percent for the first eight months of this year. Total volume, however, was down 5.1 percent. The refinance market has been more wobbly. As of the end of August, refi volume totaled $65.87 billion, down 26.2 percent from the ... [Chart]

The uniformity once seen across rating services in their assessments of specific tranches of residential MBS has become a lot less common in recent years. The trend prompted Fitch Ratings to raise concerns about “rating inflation,” as competitors have at times been more lenient in their assessments.

Fannie Mae and Freddie Mac continued to report declining balances in their retained mortgage portfolios during the second quarter – with a few wrinkles. [Includes one chart.]

Ocwen Financial Corporation is no longer in danger of losing its Ginnie Mae issuer status after the agency earlier this month officially announced its concerns over the specialty servicer’s problems with state regulators are resolved. Ocwen, a publicly traded Florida corporation, disclosed in a new filing that, based on information it provided to Ginnie Mae regarding the resolution of state cease-and-desist orders issued by a coalition of state banking regulators, the agency considers the issue to be concluded. In April last year, 30 state mortgage regulators issued cease-and-desist orders to prevent Ocwen from servicing loans within their jurisdictions. The servicer was accused of substandard loan servicing that violated state and applicable federal laws The orders generally prohibited Ocwen from acquiring new mortgage servicing rights, originating or acquiring new mortgage loans for which Ocwen would be the ...

Michael Bright Clears First Hurdle to Becoming President of GNMA. The Senate Committee on Banking, Housing and Urban Affairs this week voted to confirm Michael Bright as president of Ginnie Mae. Bright’s confirmation is broadly positive for housing, said Jaret Seiberg, financial services and housing policy analyst for Cowen Washington Research Group. Bright is a former staffer for Sen. Bob Corker, R-TN, and has a history of working well with Republicans and Democrats, said Seiberg. In addition, he has worked closely with Sen. Elizabeth Warren in cracking down on loan churning, he added. The Mortgage Bankers Association welcomed the news. “Mr. Bright would bring significant experience within the mortgage industry and on Capitol Hill to the role of Ginnie Mae president,” said Bill Kilmer, the group’s chief lobbyist. “He has demonstrated a commitment to bipartisan solutions regarding complex ...

Coworking is playing a more significant role in commercial real estate, posing new challenges to underwriting and valuation standards for the commercial MBS, rating services said.

As a group, commercial banks and thrifts ended the second quarter of 2018 with slightly reduced holdings of single-family MBS, although several institutions raised their stakes in the market significantly, according to a new Inside MBS & ABS analysis and ranking. [Includes two data charts.]

The average daily trading volume in agency MBS fell to $204.1 billion in July, the weakest reading of the year, according to the Securities Industry and Financial Markets Association.

Mortgage servicers and investors often complain about long foreclosure timelines in states with a judicial foreclosure process, but Moody’s Investors Service said the delays will only marginally increase losses on residential MBS.