The supply of single-family mortgage-backed securities issued by Fannie Mae, Freddie Mac and Ginnie Mae grew by 0.5 percent during the second quarter, according to an exclusive analysis and ranking by Inside Mortgage Finance. Total agency MBS outstanding rose to $6.258 trillion at the end of June, which does not include whole loans held in Fannie and Freddie portfolios or government-insured loans repurchased from Ginnie pools. The market was 4.2 percent bigger than it was at the midway point in 2016. Ginnie continues...[Includes two data tables]

The House Appropriations Committee this week approved a fiscal year 2018 funding bill for the Department of Housing and Urban Development with a $135 million allocation for systems enhancements, quality control and risk management improvements in lieu of a proposed lender fee. Approved by a vote of 31 to 20, the bill provides HUD with $38.3 billion in discretionary funding for FY 2018, down $487 million from the current level. The House measure authorizes...

Fannie Mae and Freddie Mac issued $189.70 billion of single-family mortgage-backed securities during the second quarter of 2017, a 13.1 percent drop from the first three months of the year. A new ranking and analysis by Inside The GSEs reveals that much of the decline resulted from a slowdown among large banks and thrifts. The four banks with over $1 trillion in assets delivered just $43.23 billion of home loans into Fannie/Freddie MBS during the second quarter. That was down 29.1 percent from the previous period, knocking the group’s combined market share down from 27.9 percent in the first quarter to 22.8 percent.

Pricing disparity between the GSEs has almost disappeared since single-security efforts began, according to a new paper by the Urban Institute. The authors called the progress on the initiative an “unheralded success” in a paper released this week. In 2012 and 2013, Freddie’s 3, 3.5, and 4 percent coupons traded at more than a $0.30 discount to Fannie Mae’s. That number narrowed to about $0.15 in 2014 and 2015 and by early 2017 it had largely converged, said the UI. “Interestingly, the pricing disparity has all but disappeared since the single-security effort began,” said Laurie Goodman, Jim Parrott and Bing Bai, authors of the study.

Wells Fargo’s recent maneuver to hold back funds on vintage non-agency MBS subject to clean-up calls could have broader implications for the market, according to industry analysts. Other trustees appear likely to follow the lead set by Wells, which could limit clean-up calls by servicers. In June, Wells withheld $94.3 million in funds from investors in 20 non-agency MBS that were subject to clean-up calls by New Residential Investment. The deals in question are the subject of a lawsuit involving MBS investors alleging that Wells failed to perform its duties as trustee. Wells disputed the charges and withheld the funds to cover potential litigation costs. Analysts at Bank of America Merrill Lynch said...

The Federal Reserve’s Open Market Committee is moving closer to beginning what is likely to be a long and drawn-out process to gradually and predictably unwind the U.S. central bank’s huge portfolio of agency MBS and debt – the sooner, the better, according to Fed chief Janet Yellen. “The FOMC intends to gradually reduce the Federal Reserve’s securities holdings by decreasing its reinvestment of the principal payments it receives from the securities held in the System Open Market Account,” she said this week in her semi-annual Humphrey-Hawkins testimony on monetary policy to members of Congress. “Specifically, such payments will be reinvested...

The average daily trading volume of agency MBS reached $209.9 billion in June, the second highest reading of the year and a sign that liquidity is picking up, according to figures compiled by the Securities Industry and Financial Markets Association. The increase in trading comes despite the fact that Fannie Mae, Freddie Mac and Ginnie Mae issued a total of $317.7 billion of new MBS in the second quarter, a 6.1 percent decline from the first quarter. For the six-month period, 2017 holds the edge with volume up 3.5 percent. But it hasn’t been...

As talks intensify on how to get Fannie Mae and Freddie Mac out of limbo, smaller lenders are clamoring to make sure they have a say in how housing-finance reform plays out. Nearly all sides agree that small lenders should continue to have access to the secondary market; how that’s accomplished is a different matter. The Main Street GSE Reform Coalition – an umbrella group made up of small-lender and community-advocacy groups – wants the government-sponsored enterprises to begin rebuilding capital buffers by suspending their dividend payments to the Treasury Department. It also wants...

The proposal to restructure the credit-risk transfer debt-note programs at Fannie Mae and Freddie Mac to make them more attractive to real estate investment trusts likely won’t have a negative impact on the credit risk and quality of those deals, Morningstar said in a new report. The proposed changes to Fannie’s Connecticut Avenue Securities and Freddie’s Structured Agency Credit Risk programs would characterize them as real estate mortgage investment conduits. This would allow REITs and some overseas investors to participate more broadly in the programs. Currently, the structure of the government-sponsored enterprises’ popular CRT programs doesn’t meet...

A resolution of the charges against Ocwen Financial brought by the Consumer Financial Protection Bureau and state regulators is expected to be “protracted,” according to industry analysts. In April, the CFPB and state regulators took a number of actions against the nonbank, alleging servicing- and lending-related violations. Ocwen is appealing the findings. The legal issues prompted mixed reactions from rating services. Fitch Ratings affirmed its B- issuer-default rating for ...