The Mortgage Bankers Association is pushing a proposal to change the remittance schedule on Freddie Mac participation certificates and make them fully fungible with Fannie Mae pass-through MBS for good delivery under to-be-announced guidelines. The proposal would address the historical discount to Fannie MBS at which Freddie securities trade, said MBA President Dave Stevens during the group’s National Secondary Market Conference in New York this week. Freddie PCs typically trade 1 or 1.5 points behind Fannie MBS, a difference that Freddie Mac – and ultimately U.S. taxpayers, now that the government-sponsored...

Fannie Mae and Freddie Mac reported robust activity in their expanded refinance programs for underwater borrowers, while Ginnie Mae is looking at new procedures to identify the potential new issuers that are most likely to become strong participants in its program. Freddie officials are very focused on the expanded Home Affordable Refinance Program, said Paul Mullings, senior VP for single-family sourcing at the government-sponsored enterprise. He told attendees at the Mortgage Bankers Association National Secondary Market Conference in New York this week that HARP now accounts for 26 percent of the refi loan...

Part of the cost to issue non-agency MBS under the new rules of the road is a stronger commitment to due diligence reviews of the collateral backing the transaction, and experts note that the process is more complex than just hiring one of the handful of companies that provide these services. “There are three basic constituencies you need to satisfy during third-party reviews,” said Eric Kaplan, managing director of mortgage finance at Shellpoint Partners during a session at the Mortgage Bankers Association National Secondary Market Conference. “There’s the law, the ratings agencies and investors...

The retained mortgage investment portfolios of Fannie Mae and Freddie Mac have been reliable generators of net income over the past few years, but the government-sponsored enterprises continue to shrink the profit centers under the terms of their federal bailout. Fannie and Freddie held a combined $1.310 trillion in mortgage-related investments at the end of the first quarter of 2012, down 3.8 percent from the previous quarter. The GSEs’ combined portfolios were down 9.6 percent from the same period in 2011; their agreements with the Treasury Department call for annual...(Includes one data chart)

“The private market will never come back if the best deal for the private investor is the government,” Lewis Ranieri, chairman and founding partner of Ranieri Partners, said this week at the Mortgage Bankers Association’s National Secondary Market Conference in New York City. Talk at the conference focused on almost anything other than activity in the non-agency market. David Stevens, president and CEO of the MBA, said dealing with repurchase issues ...

After a tough economic environment had officials at Redwood Trust considering whole loan sales in lieu of non-agency securitization, the real estate investment trust revealed last week that it profited from the two securities it issued during the first quarter of 2012. However, the REIT is still set to complete some whole-loan sales and even intends to add conforming-balance loans to its product menu ...

Ginnie Mae has announced new data disclosures effective Sept. 1, but investors say it is information they do not need. These include indicators identifying first-time homebuyers, type of third-party originator, and the upfront and annual mortgage insurance premiums. The new disclosures will provide greater transparency on the collateral that backs Ginnie Mae mortgage-backed securities, the agency explained in its latest guidance to program participants. The move also aligns Ginnie Mae’s data disclosures with the industry, it added. Issuers that are unable initially to provide the data will ...

Home Equity Conversion Mortgage loans remain widely available, thanks to the independent lenders that rallied to plug the gaps as major players bolted from the reverse mortgage market, an industry executive told lawmakers this week. In testimony during a House subcommittee hearing on FHA regulation of the HECM market, Jeffrey Lewis, CEO of Generation Mortgage Co., said MetLife’s departure from the market and closure of its traditional mortgage-origination business say nothing about the value of the HECM product to consumers. Lewis said MetLife’s decision was a strategic one and had nothing to do with ... (1 chart)

Western Asset Management, a real estate investment trust, has announced a $160 million initial public offering to finance purchases of agency MBS. The Pasadena, CA-based company, a fixed-income subsidiary of Legg Mason, plans to raise cash by offering 8.0 million shares to investors at a price of $20. It also plans to offer 2.2 million units, consisting of a share and a warrant to half a share, and 46,043 shares in concurrent private placements. According to Renaissance Capital, the REIT will command a market value of $207 million after the offering. JPMorgan Chase, Deutsche Bank...

Participants in the startup of the new central counterparty for agency MBS trades realized a sharp reduction in costs and operational risks, according to the CCP’s sponsor, the Depository Trust & Clearing Corp. The first settlement cycle run through the CCP resulted in a 70 percent reduction in the volume of pools and payments needed to settle all the trades, said the DTCC. The central counterparty began operation on April 2. In the first trade cycle, the CCP was able to reduce some 43,000 pool allocations to fewer than 13,000 through netting, the sponsor reported. As the month went along and...