Security issuances backed by FHA and VA loans totaled $267.6 billion in 2014, with several large states accounting for a significant share of FHA/VA originations. An estimated $158.1 billion of FHA-insured loans, including modified loans, were securitized last year, with purchase home loans comprising most of the transactions. Approximately $30.0 billion of FHA refinance loans were securitized as well. The FHA MBS had an average loan-to-value ratio of 92.3 percent and a debt-to-income ratio of 40.1 percent. The average FICO score was 672.3, which was indicative of first-time homebuyers and borrowers with slightly tainted credit. First-ranked California, Texas (#2) and Florida (#3) combined for a total of $48.0 billion, which represented 30.3 percent of FHA loans in Ginnie Mae mortgage-backed securities in 2014. Fourth-ranked New York reported a total of $6.7 billion while ... [ 2 charts]

Issuer registration for Ginnie Mae’s Issuer Performance Scorecard has been somewhat slower than expected, according to agency officials. The reason is unclear but only about 70 issuers so far have registered for Ginnie’s Issuer Operational Performance Profile (IOPP) tool since its launch on Feb. 17, 2015. Officials said they need to sign two-thirds more to get the IOPP system up to full speed. In a recent outreach call, officials urged those issuers who have not yet registered to contact their security officers for authority to access the Ginnie Mae Enterprise Portal (GMEP), the gateway to the IOPP system. Issuers must first be enrolled in GMEP before their security officer can grant them authority to access the IOPP system. The IOPP, also known as the Issuer Performance Scorecard, will rate each issuer’s operational performance and default management and compare them to ...

The dispute around an $8.5 billion settlement between Bank of America and non-agency MBS investors may be at an end after a New York state appeals court signed off on the deal. The agreement would mean a quick end to a lengthy legal battle over a settlement that was first announced on June 28, 2011. It also means the agreement could become the template for all representations-and-warranties settlements with large institutional investors, analysts said. BofA agreed...

Over a fifth of the loans securitized last year by Fannie Mae, Freddie Mac and Ginnie Mae do not meet one of the key criteria of the qualified-mortgage standard that came into effect in January 2014, and instead rely on an exemption for agency loans. During 2014, the three agencies securitized $198.3 billion of home loans with debt-to-income ratios exceeding 43.0 percent, according to a new Inside MBS & ABS analysis of loan-level disclosure data. That represented 21.5 percent of total MBS issuance by Ginnie and the two government-sponsored enterprises. The Consumer Financial Protection Bureau requires...

The representations and warranties used in jumbo MBS can sufficiently handle some breaches but fail to completely protect investors, according to Moody’s Investors Service. In a report released this week, the rating service noted that issuers use two main varieties of reps and warrants: those that allow for an open-ended review of loans and those that employ a prescriptive framework. The open-ended reviews are seen in jumbo MBS from Redwood Trust, WinWater Home Mortgage and others...

Banks have retained a significant volume of newly originated jumbo mortgages and even certain conforming loans in recent years, but analysts at Deutsche Bank Securities stress that the “conventional wisdom” regarding bank demand for MBS is wrong. “Despite anecdotal evidence of banks retaining more whole loans – they are more and more reliant on MBS as a percentage of their overall exposure to residential mortgages than they have been at any point in the past 15 years,” the analysts said in a report released last week. Bank demand for MBS holdings has increased...

Credit unions aren’t major players in the MBS market, and their aggregate holdings declined slightly in 2014, according to a new Inside MBS & ABS analysis of call-report data. Credit unions held $101.3 billion of residential MBS in portfolio at the end of last year. That was down 2.4 percent from the third quarter, and off 3.8 percent from the end of 2013. Most of the industry’s MBS holdings (97.4 percent) were...[Includes one data chart]

Agency single-family MBS issuance rose 2.8 percent in February on the back of a huge increase in securitization of seasoned home loans at Freddie Mac, according to a new Inside MBS & ABS ranking and analysis of loan-level MBS data. Fannie Mae MBS issuance fell 3.2 percent from January to February, and Ginnie Mae production was down 12.8 percent. But Freddie Mac issuance jumped by $7.05 billion from January’s level, a gain of 30.8 percent in a month. Freddie securitized...[Includes two data charts]

Nationstar Mortgage has filed a $1 billion shelf registration with the Securities and Exchange Commission, signaling its intention to sell debt securities and other instruments to the general public. But whether the lender/servicer actually uses the shelf is another matter entirely. “The mixed shelf is the company’s first amendment or filing of a new registration statement since May 2013,” noted analyst Kevin Barker of Compass Point Research & Trading. A mixed shelf means Nationstar could issue debt, preferred and common stock, as well as depository shares and warrants. Interestingly, the filing came...

Mortgage real estate investment trusts increased their holdings of residential MBS by 2.9 percent during the fourth quarter of 2014, according to data compiled by Inside MBS & ABS. Sixteen publicly-traded mortgage REITs reported a fair market value of $282.62 billion for their aggregate MBS holdings as of the end of 2014. That was up 6.7 percent from a year earlier. After diversifying into mortgage-servicing rights, risk-share transactions with the government-sponsored enterprises and other strategies, mortgage REITs are looking...[Includes one data chart]