Despite a robust economy, retailers are still floundering in a shifting business environment. Recent bankruptcy filings and store closures by retailers are posing risks to certain commercial MBS, according to several reports.

The strong demand for non-agency mortgage-backed securities this year looks to be tied to a number of factors, according to industry analysts. ICE Data Services, a firm that tracks non-agency MBS prices, noted that the sector has been helped by large settlements involving legacy non-agency MBS. And investors are more comfortable with the legal liability associated with non-qualified mortgages, prompting significant securitization of the loans. Issuers are also experimenting with ...

A coalition of industry groups strongly urged Senate leadership to bring up Michael Bright’s nomination for president of Ginnie Mae for a vote in the full Senate.

Residential MBS holdings of commercial banks and savings institutions declined 0.7 percent during the third quarter, according to a new Inside MBS & ABS analysis of call-report data. [Includes two data charts.]

Ginnie Mae last week issued guidance tightening requirements for entities seeking to become approved issuers, including a credit evaluation to determine their financial strength as well as a new notification requirement for subservicers.

New requirements from Ginnie Mae addressing counterparty risk management by issuers could wind up making the agency’s approval more valuable, while requiring more transparency about their financing of mortgage servicing rights.

This week, Ginnie Mae issued an all-participants memo dictating new standards for firms seeking to become issuers, including the stipulation that applicants submit to a corporate credit evaluation. Ginnie said the financial exercise will be “similar to those employed by credit rating agencies.” The evaluation will determine whether an applicant is qualified to be an issuer or whether additional criteria should be imposed even if the basic standards are met. Applicants that rely on a subservicer arrangement will be scrutinized even more. The bulletin also notes that, effective immediately, the agency is implementing new notification requirements for MBS issuers engaged in “certain subservicer advance or servicing income agreements, which do not require prior Ginnie Mae approval, but can impact an issuer’s ongoing liquidity position and financial obligations.” While Ginnie currently permits subservicers to advance ...

Increasingly worried about the financial condition of its largest nonbank issuers amid declining market conditions, Ginnie Mae in late October shot off a liquidity letter to 14 companies, asking them to develop contingency plans. The identity of the firms was not revealed to Inside FHA/VA Lending, but it’s no secret which companies rank among the top echelon of issuer/servicers. The five largest nonbank Ginnie MBS servicers as of Sept. 30 are PennyMac Financial Services, Lakeview Loan Servicing, Freedom Mortgage, Quicken Loans and Mr. Cooper. According to the letter, a copy of which was obtained by this publication, Ginnie wants the companies to develop strategies to right-size their operations. One of the agency’s goals is to lay the groundwork for financial stress tests that all issuer/servicers eventually must meet. Ginnie expects to sit down with the executive management teams of the ...

Real estate investment trusts boosted their holdings of residential MBS during the third quarter, a period when two firms were acquired by larger players. [Includes one data chart.]

Increasingly worried about withering loan production and declining profitability of the mortgage industry at large, Ginnie Mae recently sent a letter to its 14 largest nonbank counterparties, asking them to develop strategies to right-size their operations.