Nonbanks crossed a threshold in the third quarter of 2016, posting a hefty 6.3 percent increase in their combined Ginnie Mae servicing portfolio, according to a new Inside FHA/VA Lending analysis. Nonbanks serviced $826.6 billion of Ginnie single-family mortgage-backed securities as of the end of September. That represented 51.3 percent of the total Ginnie market. The nonbank servicing total includes a small amount of Ginnie servicing held by state housing finance agencies, roughly 1.0 percent of the entire market. But it doesn’t include the significant amount of Ginnie servicing that nonbanks do as subservicers for both depository and nonbank clients. Interestingly, the biggest gain for nonbanks in percentage terms came in servicing VA loans, which rose 8.1 percent from the second quarter to $252.1 billion, or 51.0 percent of the market. The VA sector is one business from ... [4 charts ]

Nonbank mortgage servicers expanded their footprint in agency mortgage servicing rights during the third quarter of 2016, according to a new Inside Mortgage Finance analysis. Overall, there were $6.062 trillion of single-family mortgages outstanding tied to Fannie Mae, Freddie Mac and Ginnie Mae mortgage-backed securities at the end of September. (The table below excludes two significant categories: loans subserviced on behalf of the agencies and some seasoned loans for which no servicer is disclosed. This mostly affects the Fannie data.) The September figure was...[Includes three data tables]

RBS Securities has agreed to pay $120 million to the state of Connecticut to resolve an investigation into its underwriting of residential MBS shortly before the 2008 collapse of the financial markets. CT Attorney General George Jepsen and Department of Banking Commissioner Jorge Perez announced the agreement, which, they said, is the largest single settlement in Connecticut’s history. It also ends a four-year state investigation into RBS’s securities underwriting and due diligence practices. At issue were...

Fannie Mae and Freddie Mac saw a robust 29.7 percent jump in single-family mortgage business during the third quarter, with most of the gain coming from the purchase-mortgage side of the business. And more purchase-mortgage business usually means a bigger share for correspondent lenders. Correspondent originations accounted...[Includes two data tables]

Private mortgage insurers are quietly gaining ground on their government-insured rivals in the critical home-purchase market, according to a new Inside Mortgage Trends analysis of agency mortgage-backed securities data. Fannie Mae and Freddie Mac securitized $61.47 billion of purchase mortgages with private MI coverage during the third quarter, a gain of 33.4 percent from the previous period. At the same time, Ginnie Mae securitized $79.91 billion of FHA and VA purchase mortgages, up 19.3 percent from the second quarter. The private MI share of agency purchase loans rose...[Includes two data tables]

Ginnie Mae set new monthly and quarterly production records during the third quarter of 2016, leading the agency MBS market to a huge 24.6 percent increase in new issuance, according to a new market analysis and ranking by Inside MBS & ABS. The three agencies produced $428.36 billion in new single-family MBS during the third quarter. Fannie Mae and Freddie Mac actually had bigger increases from the second quarter, but Ginnie was the star of the show. Ginnie recorded...[Includes two data tables]

Non-agency MBS investors looked to the practices of the government-sponsored enterprises when establishing the standards for a deal agent, according to Alessandro Pagani, a portfolio manager and head of securitized assets at Loomis Sayles. “The GSEs were very effective in enforcing their rights as owners of the collateral; they had access to information and real enforcement power to put back loans that needed to be put back and direct servicers,” he said at the recent ABS East conference produced by Information Management Network. The Deal Agent Committee released...

Annaly Capital Management, the nation’s largest real estate investment trust specializing in the residential MBS market, continues to take a close look at one of its more recent acquisitions, Pingora Loan Servicing, with no word yet on its plans for the unit. Annaly took control of Pingora this past summer when it officially closed on the purchase of Hatteras Financial, the parent of the servicer. Before the purchase, Annaly had...

The post-crisis market environment that fueled the mortgage loan buyback dynamic continues to improve, and with it, the business relationships between lenders, investors and the government-sponsored enterprises. However, the repurchase and indemnification phenomenon has not gone away and is unlikely to do so for the foreseeable future. That means market participants need a comprehensive strategy to limit their exposure to litigation and, when that fails, to restrict the damage that does ensue, according to some top industry attorneys. This may be particularly important for correspondent lenders. “In order to go ahead and get a good perspective for what your company’s potential risk is, how do you go...

The Milken Institute suggests simply amending the charters of Fannie Mae, Freddie Mac, Ginnie Mae and the Federal Housing Finance Agency for a smooth transition toward a new secondary mortgage market. Those changes include turning the government-sponsored enterprises into mutuals owned and operated by their seller-servicers and making Ginnie Mae a stand-alone government corporation. Amending the charters could accomplish a wide range of objectives that have eluded legislators and policymakers since the conservatorships, the authors said. Michael Bright, director in the Milken Institute’s Center for Financial Markets, and Ed DeMarco, senior fellow at the institute and former FHFA acting director, said...