Institutional investors are creating a rental market out of real estate owned properties without a mortgage-backed security structure in place, though industry participants anticipate that a REO rental securitization market will eventually develop. Some $8.0 billion has been raised by institutional investors to purchase REOs and rent them, according to Oliver Chang, founder and managing director of Sylvan Road Capital, which itself expects to invest $1.0 billion in the market in the next two years ...
Ginnie Mae is increasing its scrutiny of issuers and tightening the screening of new issuer applicants to ensure that all participants in its mortgage-backed securities program fulfill their obligations. The agency is concerned about issuers coming in with little understanding of how the program works and what their responsibilities are, and putting Ginnie Mae at risk, said Michael Drayne, senior vice president at Ginnie Maes Office of Issuer and Portfolio Management, during a recent webinar hosted by Inside Mortgage Finance. Drayne noted Ginnie Maes success, saying that the only way it would not be profitable is ...
Mortgage-backed securities production by the top Ginnie Mae issuers in the third quarter of 2012 slipped but not by enough to offset the 32.1 percent gain on a year-over-year basis, according to an Inside FHA Lending analysis of Ginnie Mae data. Ginnie Mae MBS issuance fell by a mere 0.1 percent from the second quarter, a hiccup that would have been easily cured had any of the top five issuers posted even a modest gain. All five issuers saw their issuances fall during the quarter. The top issuers reported a total of $100.57 billion in MBS sold to investors at the end of the third quarter, down from $100.62 billion the previous quarter. The slip disrupted an ...
Thanks to the Federal Reserves aggressive support for the agency mortgage market and continuing strength in the refinance program for underwater Fannie Mae and Freddie Mac borrowers, mortgage refi activity has accounted for 73.1 percent of 2012s surging production volume. But home-purchase lending started to regain some market share during the third quarter of 2012, according to a new Inside Mortgage Finance ranking and analysis. An estimated $143 billion of home-purchase mortgages were originated during the third quarter, up 10.9 percent from the previous three-month period. By comparison, refinance production was up just 2.8 percent from the second quarter. The purchase-mortgage sector still has...[Includes three data charts]
Department of Housing and Urban Development Secretary Shaun Donovan said this week HUD is considering additional steps to improve the financial health of the FHA single-family program, including raising FICO score requirements and supporting legislation that would take the FHA loan limits back to pre-crisis levels. The HUD secretary found himself in the hot seat before the Senate Committee on Banking, Housing and Urban Development, explaining the results of a recent actuarial audit that placed the FHAs Mutual Mortgage Insurance Fund capital reserve ratio below zero at negative 1.44 percent, representing a negative economic value of $16.3 billion. Sen. Richard Shelby, R-AL, ranking minority member of the committee, raised...
Commercial banks and savings institutions continued to increase their MBS holdings during the third quarter, despite more competition for the still-shrinking asset class. A new Inside MBS & ABS analysis of bank call report data shows that banks and thrifts held a record $1.617 trillion of residential MBS as of the end of the third quarter, up 0.5 percent from the previous quarter. All of the growth came from commercial banks, as thrift MBS holdings continued to decline, dropping 1.3 percent to $175.6 billion. Banks managed to increase...[Includes two data charts]
Ginnie Mae is beefing up its staff to handle increased securitization volume, a growing number of applications for new issuer approval, and closer monitoring of current participants in the Ginnie Mae program, according to a top agency executive. The agency plans to have 130 market professionals on staff by 2013, up from 70 in 2010, to ensure compliance of new and current participants with existing guidelines and the agencys adaptation to a changing MBS market, said Michael Drayne, senior vice president at Ginnie Maes Office of Issuer and Portfolio Management. We have been given...
Fannie Mae and Freddie Mac have reduced their dependency on U.S. government support, but there may be restructuring issues within the budget talks to resolve the looming fiscal cliff, according to Fitch Ratings. Fitch this week affirmed its AAA rating for both Fannie and Freddie even as its outlook for the two GSEs remains negative. However, the rating agency warned that its outlook for Fannie and Freddie depends upon the economy and the ability of political leaders to come to an accord on taxes and government spending before years end.
UBS Americas took its challenge to the first of a long line of mortgage-backed securities lawsuits brought by the Federal Housing Finance Agency to a federal appeals court this week, arguing the GSE conservator waited too long before filing charges that the company misled Fannie Mae and Freddie Mac in selling toxic non-agency MBS to the two GSEs.
While the nine rating services registered as Nationally Recognized Statistical Rating Organizations were largely compliant with Securities and Exchange Commission regulations and recommendations, the agency found some significant issues with the ABS rating process. In a review covering the governments 2012 fiscal year ending in September, the SEC said one of the top three firms appeared to change its method for calculating a key financial ratio in rating certain asset-backed securitizations, but failed for several months to publicly disclose the change and its effects on the ratings. The agency includes non-mortgage ABS, commercial MBS and non-agency MBS in a single category of asset-backed securitizations. Further, it appears the NRSRO did not consistently apply...