Ginnie Mae production fell substantially in February from January as the government-insured lending market continued to lose steam in the first quarter of 2017. Ginnie mortgage-backed securities issuance fell 24.0 percent from January as fewer purchase and refinance loans were pooled for securitization, bringing February’s total issuance to just $32.2 billion. Year-over-year Ginnie MBS issuance, on the other hand, increased by 6.2 percent. The government-insured market set an all-time record of $545.0 billion in originations during 2016, a whopping 31.0 percent jump from the previous year. That total eclipsed previous records for originations of FHA, VA and rural housing loans guaranteed by the U.S. Department of Agriculture, according to data compiled by affiliate Inside Mortgage Finance. In addition, government-insured lending accounted for a record ... [ 3 charts ]

The SFIG Vegas conference this week set another attendance record for the annual event, demonstrating strong interest in the structured finance market. While investors are comfortable with most asset classes of MBS and ABS, significant concerns remain about non-agency MBS. More than 6,700 people registered for the conference, according to Jade Friedensohn, director of programming at Information Management Network, which produced the conference along with the Structured Finance Industry Group. Potential investors in non-agency MBS continued...

As Democrats in Congress worked on reforms after the financial crisis, issuers of MBS and ABS repeatedly warned that regulatory uncertainty would hurt the market. With Republicans now looking to roll back parts of the Dodd-Frank Act, industry participants are pushing for risk-retention requirements to remain in place, again citing the potential impact of regulatory uncertainty. “It’s foolish to think that we would try to tear it all down,” said Howard Kaplan, a partner at the law firm of Deloitte & Touche, during this week’s SFIG Vegas conference. Among many other changes, the CHOICE Act from Rep. Jeb Hensarling, R-TX, would repeal...

Fannie Mae, Freddie Mac and Ginnie Mae produced a combined $96.70 billion of new single-family MBS during February, a sharp 27.9 percent decline from the previous month, according to a new ranking and analysis by Inside MBS & ABS. February’s issuance was the lowest monthly volume since March of last year. All three agencies saw substantial declines in gross MBS issuance, led by Fannie’s 31.9 percent drop. Still, agency MBS production in the first two months of 2017 was...[Includes two data tables]

Secondary market gains headed south in the final three months of 2016, and so far it’s not looking too bright for the first quarter of 2017, which has about four weeks to go before it’s a wrap. According to a new report from Piper Jaffray, gain-on-sale margins declined to an average of 94 basis points in the fourth quarter, compared to a more robust 106 bps in the third. Piper said GOS is currently tracking at about 88 basis points. The research firm’s coverage universe includes...

The two major players in the jumbo mortgage-backed security market have seen strong demand for their issuance in recent months. But much broader factors are likely to limit issuance, including ongoing uncertainty regarding reform of the government-sponsored enterprises. Marc Simpson, an executive director at JPMorgan Securities, said 50 investors bought into the bank’s latest jumbo MBS, a $1.03 billion issuance. He said it was a “highwater mark,” as 20 to 30 investors typically ...

Documents have been drawn up to define a deal agent’s responsibilities, a number of firms are willing to be deal agents for new non-agency mortgage-backed securities and some investors insist that the investor-friendly role is necessary. But a deal agent has yet to be included in an MBS. Dmitri Rabin, a vice president of Loomis, Sayles & Company, an investing firm that has pushed the deal-agent concept, conceded that the function doesn’t provide much value in the current environment ...

By creating liquidity in Ginnie Mae mortgage-backed securities, liquidity coverage ratio (LCR) policies have attracted lenders – mostly nonbanks – whose funding relies more on securitizations – toward FHA loan originations, according to a new paper published by academicians. The paper, “Nonbanks and Lending Standards in Mortgage Markets: The Spillovers from Liquidity Regulation,” maintains that such lenders approve more FHA loans because they can sell the loans easily, given the high liquidity of the securitized product. The greater liquidity in Ginnie MBS has resulted in higher market share and eased standards especially for nonbanks and lenders with less deposit funding. It also has led to tighter standards for conventional mortgages, which are eligible for government sponsored enterprise securitization, wrote Pedro Gete and Michael Reher, researchers in the ...

Purchase-mortgage originations in 2016 hit their highest level since before the housing market crash, including a solid uptick in first-time buyer activity, according to a new Inside Mortgage Finance ranking and analysis. Revised estimates show a total of $1.021 trillion of home-purchase mortgages were originated in 2016, a 10.5 percent increase from the previous year. It marked the biggest volume of purchase-money lending since 2006 even though the purchase share of new originations declined. That’s...[Includes five data tables]

Planned revisions to the Financial CHOICE Act would loosen regulation of rating services, according to a recent memo by Rep. Jeb Hensarling, R-TX, chairman of the House Financial Services Committee. Hensarling sent the memo to the leadership team of the House Financial Services Committee this month detailing changes that will be included in hise so-called CHOICE Act 2.0. The expected revisions to standards for nationally recognized statistical rating organizations go well beyond the rollbacks included in the version of the CHOICE Act that was introduced in September. The 2016 bill would have repealed...