Ginnie Mae is now approving applications to issue agency mortgage-backed securities in as little time as six months, a far cry from two years ago when it took as long as 24 months, according to figures provided to Inside FHA Lending. In fiscal year 2013, which ended September 30, the agency approved 77 out of 122 new issuer applications. Since the beginning of the current fiscal year through April, the agency has processed 47 new applications resulting in 20 approvals. A spokesman for Ginnie noted that the number of applications processed in fiscal 2014 was impacted “by the government shutdown” but also by the development of a new online application tool that will be rolled out this year. “The time it takes to get a Ginnie Mae approval has been getting better – as in faster,” said David Lykken, managing partner of Mortgage Banking Solutions, a consulting and advisory firm. “It’s true that the number of ...

New originations of both refinance loans and purchase mortgages fell sharply from the fourth quarter, with the biggest slump in the refi market, according to a new Inside Mortgage Finance ranking and analysis. An estimated $104 billion of refinance loans were originated in the first quarter, down 45.6 percent from the end of 2013. Compared to a year ago, refi production was down 76.2 percent. Refinance originations hit a cyclical high at the end of 2012 and early 2013, averaging nearly $440 billion per quarter, and it’s been going down steadily since then. With interest rates dropping in recent weeks, some mortgage observers say...[Includes one data chart]

Banks that extend warehouse lines of credit to non-depositories are suffering from a usage drought on their loans, forcing them to consider other asset classes to finance, including mortgage servicing rights. According to industry advisors and warehouse officials, there are at least half a dozen large banks that are dipping their toe into the MSR financing pool or contemplating such a move. “From what I’m seeing, a number of warehouse banks are looking...

Lenders that upstream product to the megabanks through correspondent loan sales are beginning to worry that because profits were so weak during the first quarter – or nonexistent – they might be cut off as sellers. Moreover, lenders fret that some of the largest players might shut the door on them for a different reason: they can’t deliver enough volume in an origination-challenged market. Speculation has focused...

Commercial banks and savings institutions held $1.521 trillion of single-family MBS in their retained portfolios as of the end of the first quarter of 2014, according to a new Inside MBS & ABS ranking and analysis of call report data. Bank and thrift MBS holdings were up a modest 1.0 percent from the previous quarter, but it marked the first increase since the third quarter of 2012, when the Federal Reserve began aggressively buying agency MBS and Treasury securities. Significantly, the increase in bank MBS holdings came at a time when new issuance was plummeting. MBS purchases...[Includes two data charts]

RBS Securities – which is 64 percent owned by the government of the United Kingdom – is shaking up its mortgage trading operation in the U.S., cutting staff and taking a close look at its future in an extremely tough American mortgage market. Officials at the bank’s MBS headquarters in Stamford, CT, did not return telephone calls about the matter, but several lenders and Wall Street executives confirmed that cutbacks have been made at the company over the past week or so. Frank Skibo, a managing director for RBS in Connecticut, and Ara Balabanian, a director in the group, also could not be reached...

Fannie Mae and Freddie Mac cannot remain safely in conservatorship indefinitely, and they cannot get out from under Uncle Sam’s protection without “cataclysmic” consequences to the government-sponsored enterprises, MBS investors and the market, according to a new Urban Institute study. While the Federal Housing Finance Agency and the White House can make minor changes administratively, the UI paper notes it would take an act of Congress to authorize substantial revisions to the GSEs’ bailout agreement. “They can take...

U.S. auto ABS may have hit a few potholes in recent months, but seasonal factors and investors’ hunger for greater returns is strengthening the sector, especially for subprime deals, according to Wall Street analysts. “Subprime auto ABS continue to benefit from the hunt for yield,” said Elen Callahan and Kayvan Darouian, analysts with Deutsche Bank, in a recent research report. Many deals are oversubscribed and are often upsized, they added. “With spread differentials of up to 600 basis points, depending on issuer and tranche, investors who are comfortable with the asset class’s recent performance are moving from the top of the credit structure, down to the first-loss piece, to pick up yield.” Increased demand for subprime auto ABS subordinate bonds is...

The market for securities backed by proceeds from single-family rental properties is set to grow from deals backed by a single firm to pools with multiple sponsors, according to industry analysts. The sector has produced more volume than the jumbo MBS market in recent months and investor demand for single-family rental securities remains strong. Rating services are projecting that single-family rental securities soon will come to market with multiple sponsors or borrowers in a single security. Kroll Bond Rating Agency released...

All the major mortgage product categories saw declines in new originations during the first quarter, but the jumbo and home-equity sectors held up slightly better, according to a new ranking and analysis by Inside Mortgage Finance. The conventional-conforming sector took the biggest hit, as new production dropped 25.9 percent from the fourth quarter of 2013 to an estimated $123 billion in the first three months of this year. The vast majority of these loans still end up being financed by Fannie Mae and Freddie Mac, and the two government-sponsored enterprises continue to draw a lot of their business from the ebbing refinance market. Fannie and Freddie securitized...[Includes two data charts]