Fannie Mae, Freddie Mac and Ginnie Mae produced a combined total of $910.04 billion of single-family MBS during the first half of 2013, according to a new Inside MBS & ABS ranking. That was up 19.8 percent over the volume generated in the first six months of last year. Agency MBS issuance declined during the second quarter, however, drifting down 2.2 percent from the prior quarter. Fannie Mae and Freddie Mac both saw production slow during the second quarter, by 6.7 percent and 2.3 percent, respectively, but Ginnie Mae posted a solid 8.0 percent increase from the first three months of the year. Wells Fargo remained...[Includes one data chart]

A subsidiary of Nomura Holdings is preparing to issue a non-agency jumbo MBS, the Wall Street firm’s first deal backed by new production since 2007. Rising interest rates and concerns about investor demand don’t seem to have put a damper on non-agency MBS issuance, as Redwood Trust cranked out another jumbo deal last week and Springleaf Finance issued a security backed by vintage subprime mortgages this week. The $440.08 million non-agency jumbo MBS from Nomura Corporate Funding Americas is set to receive a AAA rating with credit enhancement of 7.60 percent on the top-rated tranche, according to a presale report released this week by Kroll Bond Rating Agency. The credit enhancement was increased due to geographic concentration risk because 74.0 percent of the mortgages to be included in NRP Mortgage Trust 2013-1 were originated in California. Fitch Ratings warned...

Over the past two years, Ginnie Mae has made a concerted effort to improve the speed at which it approves lenders to issue MBS, but certain factions of the industry continue to complain that the process is terribly slow. “Let’s face it. It takes a long time to get approved by Ginnie Mae,” said one advisor who works with the agency. Just how long? The answer depends on the shop and how good an applicant/lender is at filling out paperwork and answering follow-up questions from the agency. In general, it can take...

A subsidiary of Nomura Holdings is working on issuing a non-agency jumbo mortgage-backed security comprised solely of originations by First Republic Bank. The pending deal is set to receive a AAA rating from Kroll Bond Rating Agency, while Fitch Ratings warned that the proposed credit enhancement levels on the deal are too low for a AAA rating. The $440.08 million NRP Mortgage Trust 2013-1 is structured to include credit enhancement of 7.60 percent on the tranche with a AAA rating from KBRA. Fitch said ...

Beginning Jan. 1, capital requirements for bank holdings of certain non-agency mortgage-backed securities will begin to increase. The changes were included in the Basel III reforms approved by federal banking regulators last week. The Basel III final rule includes the simplified supervisory formula approach in lieu of the use of credit ratings to determine capital requirements for holdings of non-agency MBS. The SSFA relies on the 90+ delinquency rate, risk weights of the underlying exposures ...

After long delays, Freddie Mac is close to selling a mortgage-backed security that will include non-agency risk-sharing features. The sale will be part of efforts by the two government-sponsored enterprises to test risk-sharing arrangements on at least $30 billion of business this year, as required by the Federal Housing Finance Agency. A Freddie spokesman said it is “premature” to comment on any deals, but those with knowledge of the pending issuance said the GSE hired Credit Suisse to help market the security ...

Investors in new non-agency jumbo mortgage-backed securities are particularly concerned about representations and warranties regarding mortgage underwriting. Investors at a recent roundtable hosted by Standard & Poor’s stressed that particular risks should be borne by the party with the best information. “Since originators and arrangers are in a better position to ascertain the true quality of the loans, [investors said] reps and warrants should serve to protect investors from risks arising from ...

The FHA has proposed measures to strengthen its oversight of FHA lenders and each measure could potentially increase lenders’ liability and compliance risk, compliance experts warned. Published for comment in the July 9 Federal Register, the proposals are part of a new enforcement regime that the FHA is considering to monitor and sanction lenders. They cover statistical sampling, origination quality standards, annual reviews, compare ratios, and indemnification and other remedies for loan defects. The proposed enforcement measures, however, raise a ...

The Department of Housing and Urban Development is adopting the mortgage banking industry’s data standards format for the FHA’s TOTAL Mortgage Scorecard, which HUD uses to evaluate the credit risk of FHA loans that are submitted through an automated underwriting system. The standards were developed by the Mortgage Industry Standard Maintenance Organization (MISMO), a nonprofit subsidiary of the Mortgage Bankers Association. MISMO is an open data standards group that promotes consistency among mortgage transaction participants to reduce loan processing costs, increase transparency, and ultimately ...

Industry response to a proposal to consolidate Ginnie Mae I and II mortgage-backed securities programs has been positive overall despite certain investor and issuer concerns, according to Ginnie Mae. In an industry update, Terry Carr, Ginnie Mae’s senior advisor of communications and Congressional relations, explained that meetings with stakeholders over the past three months have been productive. “This concept has been well-received,” she said. Ginnie Mae will soon begin developing a blueprint laying out the mechanics for converting ...