Commercial banks and savings institutions held a record $1.608 trillion of single-family MBS in portfolio as of the end of the third quarter, according to a new Inside MBS & ABS analysis of call-report data. Banks and thrifts boosted their MBS holdings by 1.6 percent from the end of June, reaching a third consecutive record level. The gain pushed the industry’s market share of single-family MBS to an estimated 25.2 percent. Commercial banks were responsible for ... [Includes two data charts]

The second whole-loan securities risk-transfer transaction from Freddie Mac received a rating from Moody’s Investors Service. The rating service said the $634.64 million deal included a number of improvements compared with non-agency MBS, which have a similar structure. Much like non-agency MBS, the deal was backed by mortgages and included senior and subor-dinate tranches available for purchase by investors. The M1 tranche of FWLS 2015-SC02 ...

The inspector general of the Department of Housing and Urban Development refused to sign off on Ginnie Mae’s fiscal 2015 financial statement and its restated financial statement for FY 2014 due to lingering concerns about the accuracy of both statements. The IG said it was unable to obtain sufficient evidence to express an audit opinion on the fairness of the $5.4 billion in non-pooled, defaulted mortgage loans still held by Ginnie Mae. The agency also continued to use improper ...

Facing the possibility of a potential False Claims Act lawsuit, PHH Corp. is reconsidering its participation in the FHA mortgage insurance program. Though PHH’s FHA segment represents only 3 percent of its mortgage volume over the past 12 months, the company will proceed cautiously as it evaluates the risk-adjusted return of FHA products and programs, said Glenn Messina, PHH president and chief executive.Ranked 50th among FHA lenders as of June 30, 2015, PHH expects more regulatory challenges in 2016 as well as rising compliance costs, said Messina during a third-quarter earnings call. In its latest quarterly filing, PHH disclosed receiving a subpoena from the inspector general of the Department of Housing and Urban Development for documents related to, among other things, FHA loan origination and underwriting practices. Like several other FHA lenders, PHH is ...

The Federal Home Loan Bank System is seeking to boost its share of government-backed lending and the Ginnie Mae market with a new servicing-release option for FHA, VA and rural housing mortgages that are sold into the Mortgage Partnership Finance program. The new feature adds to an existing servicing-retained execution in the MPF Government Mortgage-Backed Securities program. The current servicing-retained component requires participating lenders to service loans they originate and sell into the MPF conduit. The servicing-release option from Nationstar Mortgage, a top-10 mortgage servicer based in Dallas, will provide lenders with greater pricing flexibility so they can become more competitive in the communities they serve, said Matt Feldman, president of the Chicago FHLB. Only FHLBank members that are participants in MPF can use the government MBS program. In order to ...

Nationstar Mortgage is looking to enhance its FHA and VA lending and increase the recapture rate for the two loan products, according to the company’s top executives. In its third-quarter earnings call, Nationstar CEO Jay Bray told analysts the company has initiated targeted marketing efforts for refinancing opportunities for FHA and VA borrowers. In the third quarter, Nationstar’s overall origination segment increased funding to nearly $5 billion and raised its recapture to 28 percent. The company has reported profitability for five consecutive quarters and posted $50 million in earnings. Servicing profitability improved for the third quarter to 3.6 basis points, a 57 percent improvement from the prior quarter. In addition, the company generated strong cash flows of $172 million during the period. Ranked 17th among the top FHA lenders in the third quarter, Nationstar originated ...

FHA to Unveil FY 2015 MMIF Audit Results. On Nov. 16, the FHA will release its 2015 annual report to Congress, a document that historically has included the results of the annual actuarial audit of the Mutual Mortgage Insurance Fund, or MMIF. Early in the day, Ed Golding, principal deputy assistant secretary for the Department of Housing and Urban Development’s Office of Housing, is scheduled to brief reporters on the report and take questions. As reported by Inside FHA/VA Lending, the reduction in the annual mortgage insurance premium earlier this year has put the MMIF on an accelerated path to recovery. But whether the ensuing increase in FHA production – which translates into additional premiums – will be enough to get the fund back to its statutory 2 percent capital reserve ratio remains ...

Publicly traded real estate investment trusts that buy MBS continued to whittle down their positions in government and agency product during the third quarter, a trend that some fear may have no bottom. Market leader Annaly Capital Management trimmed its MBS holdings to $66.3 billion during the period, a 1.9 percent sequential decline, but an ugly 18.6 percent drop compared to the third quarter of last year. It is investing more of its cash in commercial product. Number two ranked American Capital Agency Corp. was...[Includes one data table]

The Structured Finance Industry Group put out the third edition of its RMBS 3.0 “Green Papers” initiative early this week, featuring dozens of model representations and warranties for new non-agency residential MBS, including a range of proposed standardized constructs. “This release substantially builds upon our growing series of Green Papers, which are aimed at restoring confidence to the ‘private label’ RMBS market,” the trade group said. The first and second editions were released in 2014. The 39 model reps and warrants included in the third edition complete...

Three separate issuers of jumbo MBS shopped deals in the past week, giving a jolt to a market that has been somewhat subdued since the end of the first quarter. Industry analysts suggest that while liquidity for new jumbo MBS remains limited, the deals can be a good investment. Redwood Trust is set to issue a somewhat unusual $337.08 million jumbo MBS, Credit Suisse is preparing a deal and Five Oaks Investment issued a $251.27 million security this week, according to rating reports and filings with the Securities and Exchange Commission. At the end of October, Two Harbors Investment issued...