Increased securitization of purchase-money mortgages provided the lift for a pickup in the production of new single-family MBS by Fannie Mae, Freddie Mac and Ginnie Mae in May, according to a new market analysis and ranking by Inside MBS & ABS. The three agencies produced a total of $114.71 billion of new single-family MBS last month, a 5.3 percent increase from April’s volume. May was the third straight month of increased production and it just barely exceeded the $113.56 billion issued during the same period a year ago. For the first five months of 2016, production was down 2.8 percent from last year. Purchase mortgages accounted...[Includes two data tables]

First Mortgage Corp., a privately-held mortgage company based in Ontario, CA, and six executives have agreed to pay the Securities and Exchange Commission $12.7 million to resolve charges they concocted a scheme to defraud investors in Ginnie Mae MBS, the SEC announced this week. According to the SEC’s complaint, from March 2011 through March 2015, FMC repurchased current loans from Ginnie pools that it claimed were delinquent. FMC bought...

Moody’s Investors Service assigned its first “Green Bond Assessment” last week to an MBS backed by Dutch mortgages that were selected on the basis of the underlying properties’ energy efficiency. The rating service said it expects future “green transactions” from issuers such as financial institutions and governments. “Green bonds” are securities that raise capital for use in financing or refinancing projects and activities with specific climate or environmental sustainability purposes. Moody’s said green bonds include securitizations collateralized by projects or assets whose cash flows provide the first source of repayment, debt obligations with direct recourse to issuers and project finance or revenue bonds. Green Storm 2016 B.V. received...

Redwood Trust is preparing to issue a $344.89 million jumbo mortgage-backed security next week, according to a presale report from Kroll Bond Rating Agency. Most of the mortgages in the planned deal are subject to the TRID mortgage disclosure rule. The combined Truth in Lending Act/Real Estate Settlement Procedures Act rule from the Consumer Financial Protection Bureau took effect in early October. Since then, only one jumbo MBS has included TRID loans ...

FHA originations rose significantly in the first quarter of 2016 from the same period last year even as VA loan production decreased slightly, according to an analysis of Ginnie Mae data. Lenders delivered $54.4 billion of FHA-insured loans to Ginnie Mae for securitization during the first three months, up 36.2 percent from the previous year. In contrast, the volume of VA loans securitized over the same period, $35.0 billion, fell 1.5 percent compared to the same period a year ago. A strong purchase-mortgage market drove FHA activity from January to March. The reduction in FHA’s annual insurance premium in January 2015 continued to have an impact on FHA’s purchase-loan market share. In 2015, FHA purchase originations accounted for $151.0 billion of the estimated $881.0 billion in total purchase originations (conventional and government single-family forward originations), according to ... [ 2 charts ]

A California-based mortgage lender and six senior executives have agreed to pay $12.7 million to the Securities and Exchange Commission to resolve allegations they schemed to defraud investors in the sale of residential mortgage-backed securities with a Ginnie Mae guarantee. The SEC complaint alleged that, from March 2011 to March 2015, Ginnie Mae issuer First Mortgage Corp. and its top executives pulled current performing loans out of Ginnie Mae MBS. The issuer falsely claimed that the loans were delinquent so that it could recycle them as newly issued MBS and sell them at a profit. FMC allegedly issued Ginnie Mae MBS prospectuses with false and misleading information by using a Ginnie Mae rule that allowed issuers to repurchase seriously delinquent loans. In addition, the SEC complaint alleged that FMC deliberately delayed depositing checks from borrowers who had been behind on ...

Wells Fargo and JPMorgan Chase recently launched programs to deliver low-downpayment mortgages to Fannie Mae that differ from the government-sponsored enterprises’ recent expansion into high loan-to-value financing. Both banks introduced new 97 percent LTV programs they believe are easier to use than the GSE initiatives and, for certain borrowers, a better choice than FHA financing. Wells Fargo’s “yourFirstMortgage” requires a minimum of 3 percent downpayment for fixed-rate mortgages. The company will consider FICO scores significantly lower than other similar high-LTV programs, to as low as 620, along with debt-to-income ratios up to 45 percent. Factoring in nontraditional uses of credit such as rent, utility bill payments and tuition is...

Some potential investors in new non-agency MBS insist that a deal agent or transaction manager is necessary to revive the non-agency MBS market. Some issuers are willing to include a deal agent in their securities, though the exact functions and pricing issues still need to be worked out. “Many potential buyers of residential MBS have a strong desire for improved transaction governance mechanisms such as the use of independent deal agents,” Moody’s Investors Service said in a report published late last week. The rating service recently held a meeting with investors, issuers and others involved in the non-agency MBS market. Moody’s said...

The Federal Reserve Bank of New York’s Open Market Trading Desk this week conducted the first of two small-value agency MBS sales operations, “for the purpose of testing operational readiness.” The second test is slated for June 1, 2016. The total current face value of sales across the two operations will be less than $150 million, according to the bank. The first transaction, which involved four Fannie Mae MBS currently valued at approximately $120 million, occurred in the middle of this week. The settlement date is June 13, 2016. Meanwhile, the June 1 operation will involve...

The share of new home mortgage originations packaged into MBS drifted slightly lower in the first quarter of 2016, a new Inside MBS & ABS analysis reveals. Some $255.7 billion of newly originated mortgages were pooled in MBS in the first three months of the year, representing a paltry 67.3 percent of the estimated $380 billion of first-lien originations in the primary market. For the purposes of calculating securitization rates, loans aged more than three months and modified loans are excluded from agency MBS issuance figures. Fannie Mae and Freddie Mac securitized...[Includes one data table]