VA originations have been trending upward over several quarters, thanks to an unusually heavy share of refinance business, but all good things, at some point, must slow down, lenders say. The refinance business overall has fallen to 45 percent from 55 percent in the fourth quarter of 2016, and that will have an effect on VA originations in the first quarter of 2017, said Andy May, chief operating officer of the American Armed Forces Mutual Aid Association Mortgage Division. Going forward, May expects VA originations to fall by 10 percent in the first quarter due to rising interest rates. But even though rates have been trending up, May saw an uptick in VA loan applications in January as fence-sitters jumped into the market to take out a loan before rates went any higher. “The MBA estimates rates will rise above 5 percent in the next 24 months and then down to 4.8 percent by the end of 2018, and up to 5.3 percent at the ...

The 25-basis-point decrease in the FHA’s annual insurance premiums translates not only to annual savings for homeowners but also boosts the competitiveness of housing finance agency loan products, according to a new report from Moody’s Investors Service. The report regards the latest FHA pricing adjustment as credit positive for housing finance agencies (HFAs) because it would make FHA loans more affordable to borrowers and increase HFA loan originations. The announcement to reduce the annual mortgage insurance premium to its lowest allowable level took stakeholders by surprise. In November, FHA had no plans to lower premiums despite an uplifting actuarial report on the condition of the Mutual Mortgage Insurance Fund. This week, however, there is uncertainty as to whether the Trump administration will allow the reduced premiums to take effect for new loans closing on or after ...

The evolution of the agency mortgage-servicing market isn’t over, though it appears to have settled into a long-term transition by attrition. At the end of 2016, depository institutions serviced some $3.584 trillion of single-family home loans committed to mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae. That was down 1.0 percent from September, a period during which the supply of agency MBS debt outstanding was growing. The depository share of agency MBS servicing fell...[Includes two data tables]

The 25 basis-point mortgage insurance premium cut announced this week by the Department of Housing and Urban Development’s departing leadership could switch $50 billion of issuance from Fannie Mae/Freddie Mac business to FHA as well as cause premium Ginnie Mae MBS to prepay faster, according to market analysts. Absent any adversarial pricing by private mortgage insurers, a guaranty fee adjustment by the Federal Housing Finance Agency or a reversal by the Trump administration, analysts with Bank of America Merrill Lynch see up to 12 percent of purchase and 2 percent of refis shifting to FHA. On June 9, HUD Secretary Julian Castro announced...

Judge William Pauley of the U.S. District Court for the Southern District of New York has approved a $335 million settlement by Bank of America with three pension funds and other investors to resolve a securities class-action against the bank. The settlement is one of the largest class-action settlements of securities-purchase claims arising from the financial crisis, according to the Pennsylvania Public School Employees’ Retirement System (PSERS), the court appointed lead plaintiff in the six-year old case. Other investors include...

The Blackstone Group this month filed its long awaited initial public offering document on its Invitation Homes unit, a pioneer in single-family rentals and securitization of these assets. The 1,300 page Form S-11 is chock full of financial details on the real estate investment trust, including the revelation that the company continues to lose money. Through the first nine months of 2016 – the latest available data – Invitation Homes posted a net loss of $51.6 million compared to a $121.7 million loss in the same period a year earlier. The numbers and commentary in the filing indicate...

With financial markets awaiting, with some uncertainty, the public policy positions of the incoming Trump administration and the new Congress, industry analysts say ABS investors can expect most sectors to turn in stable performances in 2017. “As we look back on 2016 and consider the 2017 global structured finance outlook, most markets and their credit conditions seem favorable, and in some cases, even ideal. However, 2017 has many unknowns, especially the specific policies and priorities that will be adopted by the new U.S. administration,” said analysts with S&P Global Ratings in a recent outlook report. “Some would suggest government-sponsored enterprise privatization is possible, risk retention could be revised, and an appropriate/globally consistent capital treatment for structured finance products could be approved.” Further, “For the most part, we expect...

Another record year for Ginnie Mae MBS issuance plus strong volume in the Fannie Mae and Freddie Mac programs helped push total securitization of residential mortgages and non-mortgage ABS to a three-year high of $1.698 trillion in 2016. A new Inside MBS & ABS analysis shows that total MBS and ABS issuance – not including commercial MBS – was up 13.3 percent from 2015. Agency production of single-family MBS totaled $1.481 trillion in 2016, up 17.5 percent from the previous year. Over a third of that came from Ginnie, which set a new annual record with $507.5 billion in single-family MBS issuance. The non-agency MBS market was...[Includes three data tables]

In late December, Freddie Mac issued a $934.27 million security backed by seasoned mortgages. It was the first seasoned credit-risk transfer from the government-sponsored enterprise. While Freddie has issued fully guaranteed securitizations backed by seasoned mortgages, Freddie Mac Seasoned Credit Risk Transfer Trust, Series 2016-1 included tranches without a guarantee from the GSE, similar to a non-agency senior-sub MBS. The transaction included...

Monex Deposit Company issued a $100.0 million ABS backed by loans on silver and other coins in late December, according to Morningstar Credit Ratings. The deal received a AA rating, with the rating service noting concerns about the volatility of silver prices and regulatory issues. MDC is a precious-metals dealer established in 1987 whose predecessor dates back to 1967. Scala Funding Company 2016-1 consists of 1,854 accounts with an average balance of $51,760. The loans backing the ABS are offered...