Private investors in Fannie Mae and Freddie Mac stock are raising concerns about the expansion of risk-transfer activity at the two government-sponsored enterprises, warning that it should not be viewed as the answer to housing reform. The credit-risk transfer programs are often cited as a path to housing finance reform because they bring new private capital to the mortgage business, laying off some of the risk held by the GSEs and, ultimately, by taxpayers. “Some have suggested...

The mortgage refinance business began losing steam in the third quarter, but purchase-mortgage lending helped sustain agency single-family MBS production during the period, according to a new market analysis and ranking by Inside MBS & ABS. Fannie Mae, Freddie Mac and Ginnie Mae combined to issue $351.70 billion of single-family MBS during the third quarter of 2015, a slight 0.3 percent decline from the previous period. Even with the slowdown, year-to-date agency MBS volume of $976.40 billion had already topped the $929.49 billion in gross issuance for all of last year. The bright spot was...[Includes two data tables]

Ginnie Mae is considering the implementation of stress testing for MBS issuers to see whether they can withstand the worst economic and financial market conditions. Over the next couple of years, Ginnie Mae will develop a framework for stress testing modeled after the Dodd-Frank Act’s supervisory stress testing currently required of bank holding companies, said Gregory Keith, senior vice president and chief risk officer, during a recent Ginnie Mae summit. The test will subject...

Pizza, hamburgers and doughnuts have helped fuel a record year for whole-business securitization. The deals, which gained some popularity among investors before the financial crisis, are backed by franchise royalty and license payments. Late last week, Standard & Poor’s assigned a preliminary BBB+ rating to the planned $1.63 billion Domino’s Pizza Master Issuer LLC 2015-1. The whole-business securitization will be backed by franchise royalty and license payments, Domino’s intellectual property, and profits from distribution arrangements. Earlier this year, Dunkin Brands issued...

Over the past two years, roughly $13 billion in securities backed by single-family rental properties have come to market, a good start for a business that barely existed five years ago. But despite that growth, there are concerns that the “easy money” could be behind the sector. Some of that concern stems from the flood of entrants into the single-family rental market – a boom that turned red hot in 2012 and 2013 when it was first revealed that institutional investors such as The Blackstone Group and others were buying thousands of properties in once decimated housing markets with an eye toward renting them out. When investors began issuing securities backed by the rent rolls, even more money began pouring...

Recent disappointing job creation numbers and continued concern about slowing economic activity around the globe have convinced an increasing number of Wall Street analysts, participants and observers that the Federal Reserve’s Open Market Committee will not raise interest rates at its next meeting, scheduled for later this month. Further, more market professionals don’t predict an uptick in rates until sometime in 2016. And a few are even speculating a liftoff won’t come until the year after that. According to Peter Schiff, CEO and chief global strategist for investment firm Euro Pacific Capital, “the downright dismal September jobs report that was released last Friday may prove...

Fannie Mae and Freddie Mac saw a modest decline in the flow of home loans into their mortgage-backed securities programs during the third quarter of 2015, according to a new analysis and ranking by Inside Mortgage Finance. The two government-sponsored enterprises issued a total of $223.47 billion of single-family MBS during the third quarter, a 3.8 percent decline from the previous quarter. Freddie had a slightly larger downturn (4.1 percent) than Fannie (3.6 percent). Although overall MBS volume was down, lenders delivered...[Includes three data tables]

Over the past few months, the chief executive officers at two publicly traded mortgage firms and a private cooperative have departed, creating uncertainty in the market while underscoring what might seem obvious to some: It’s not easy running a mortgage business these days. CEOs heading for the exits – either on their own accord or via a management edict – include Jim Cutillo of Stonegate, Jeff McGuiness at the Lenders One Cooperative, and most recently Mark O’Brien, who headed nonbank lender/servicer Walter Investment Management Corp. And rounding out the “departure club” is...

An acquirer of mortgage servicing rights has agreed to pay $1.5 million and to stop committing further violations to resolve charges of misstating net income and misleading the Securities and Exchange Commission about its relationship with servicer Ocwen Financial Group. The settlement agreement between the SEC and Home Loan Servicing Solutions is the latest twist in the long-running federal and state investigations of Ocwen and its relationships with affiliated companies, which have included HLSS, Altisource Residential, Altisource Portfolio Solutions and Altisource Asset Management. The common thread in all five companies is...

While there may be some dispute in the industry regarding front-end versus back-end transactions, it’s clear that Fannie Mae and Freddie Mac credit-risk transfer programs are here to stay and will only intensify, according to Bob Ryan, the Federal Housing Finance Agency’s acting deputy director of the division of conservatorship. “The FHFA and the enterprises are committed to credit risk on a routine basis. It is not a pilot; it’s a routine part of our ongoing activity,” he said during a Bipartisan Policy Center seminar on mortgage finance reform. Ryan re-emphasized...