Ginnie Mae officials are moving ahead to create a blueprint for consolidating its two MBS programs, although some industry experts say the proposal could cost investors $5.5 billion. The agency got considerable backing from a variety of stakeholders for its “straw man” proposal to shift to a single MBS program based on the existing Ginnie II, said John Getchis, senior vice president in Ginnie’s capital markets office. “We got...

Ginnie Mae has proposed revising its buyout policy to eliminate inconsistencies in servicers’ repurchase practices and to discourage early buyouts of seriously delinquent loans from Ginnie MBS. Under the current policy, Ginnie Mae issuers may buy out delinquent loans if the borrower fails to make any payment for three consecutive months. However, many issuers have been applying the policy inconsistently, according to Michael Drayne, senior vice president for issuer and portfolio management at Ginnie Mae. Some servicers have been interpreting...[Includes one data chart]

Freddie Mac this week issued $1.04 billion of mortgage-backed securities backed by modified loans.The notes are being pooled into new Freddie Mac “Fixed-Rate Modified Participation Certificates” with new "MA-MD" prefixes. The GSE bought the majority of these loans out of participation certificates when they were at least 120 days past due. A Freddie official said that it will not sell the new bonds in the open market and instead will hold them on balance sheet.

Mortgage lenders that specialize in refinance lending have made a killing the past few years, especially call center operations with state-of-the-art technology. But is now the time for these firms to take their chips off the table or ponder a merger with more traditional lenders that have ties to real estate brokers and homebuilders? Paul Reddam, founder and president of CashCall, a top 30 lender, told Inside Mortgage Finance that he would be open to selling the company. “We would entertain an offer at any time,” said Reddam, who first made a name for himself in mortgages with Ditech Lending early last decade. Reddam noted...

The lack of a specific computer code for reporting short-sale mortgage transactions is creating numerous false reports of foreclosure on consumer credit reports, inhibiting their re-entry into the housing market, according to lawmakers on Capitol Hill and consumer advocates. Earlier this month, Sen. Bill Nelson, D-FL, dispatched letters to the Federal Trade Commission and the Consumer Financial Protection Bureau citing the “disturbing” consumer credit reporting practice of lumping short sale within the same industry code as a foreclosure in consumers’ credit reports. “If a short sale is reported...

Rating services are putting considerable energy into assessing the companies that are originating loans for the new breed of jumbo non-agency MBS, in addition to thorough due diligence reviews of the collateral itself, industry experts say. The rating services don’t even begin the rating process until the major loan originators in a transaction clear the “gating” process, said Kathryn Kelbaugh, a senior analyst at Moody’s Investors Service, during a panel session at last week’s secondary market conference sponsored by the Mortgage Bankers Association. “We want to know what originators are doing, have third-party reviews and look at reps and warranties. You have to pass those gates before we can do a rating.” Margaret Sweeney, a director at Fitch Ratings, said...

Real estate investment trusts that specialize in the MBS market saw another decline in the industry’s aggregate holdings during the first quarter, although the trends varied considerably among different institutions, according to a new Inside MBS & ABS analysis of REIT earnings reports. A group of 16 publicly traded mortgage REITs held a combined portfolio of $345.9 billion of MBS as of the end of March, down 3.8 percent from the previous quarter. That was still 16.3 percent higher than year-ago levels, but REIT MBS holdings peaked in the third quarter of last year, just as the Federal Reserve launched the third round of its quantitative easing program. The vast majority of REIT mortgage securities holdings, 95.4 percent, were...[Includes one data chart]

Shellpoint Acceptance Corp. hopes to come to market with its first non-agency MBS by summer, securitizing not only jumbo loans, but a host of mortgages that fall outside Fannie Mae and Freddie Mac underwriting guidelines for different reasons. According to a recent filing with the Securities and Exchange Commission, the company has committed $2 billion in capital to its shelf registration, though its first deal will be smaller than that. Shellpoint refers...

The Federal Reserve’s MBS purchase party isn’t over – yet – but it looks like the nation’s central bank is getting nearer to the last call. Late last week, the Wall Street Journal reported that officials at the nation’s central bank have developed a strategy for dialing back their unprecedented level of support of the housing market. The plan involves reducing the amount of bonds the Fed buys “in careful and potentially halting steps,” the WSJ said, with the purchases varying on the read officials have of the job market and of inflation. And although the timing of the Fed’s wind-down is...

Although Redwood Trust’s soup-to-nuts approach to representations and warranties has dominated the fledgling recovery in jumbo mortgage-backed securities issuance, some experts think a shorter term alternative may gain popularity among issuers. It’s important for investors and rating services to anticipate putbacks in jumbo MBS, Peter Sack, a managing director at Credit Suisse, said during a panel session at the recent secondary market conference sponsored by the Mortgage Bankers Association ...