Fannie Mae and Freddie Mac saw declines in the flow of purchase and refinance loans into single-family mortgage-backed securities last month, starting 2018 on a sour note. The two GSEs produced a total of $67.48 billion of new single-family MBS in January, according to a new Inside The GSEs analysis and ranking. That was down 8.8 percent from the previous month and off 26.4 percent from January 2017. It was the GSEs’ weakest monthly output since May 2017, and it would have been worse had Fannie not come up with $4.69 billion in mortgage securities backed by modified loans. Including those mod-backed deals, Fannie issuance was up 5.0 percent from December. Without them, the company’s new MBS issuance fell 5.7 percent in January.

Ginnie Mae would become the linchpin of the conventional secondary mortgage market of the future, providing an explicit government guarantee for MBS issued by one of several new entities, under a plan being drafted by Senate Republicans.

Ginnie Mae is planning to make enhancements to its disclosure offerings in 2018 and 2019 to benefit MBS issuers and investors.

Ginnie Mae late last week cautioned servicers in its single-family mortgage-backed securities program to pay more attention to “acceptable risk parameters” that could affect their participation in the program.

Ginnie Mae is expanding its guidelines to clarify the amount of risk it considers acceptable for an issuer’s Ginnie mortgage servicing rights portfolio and what could happen if the issuer violates those standards. The move is part of the agency’s continuous monitoring of issuer activity and MSR portfolios to ensure they are not putting issuers, investors or the program at risk.

Ginnie Mae is expanding its guidelines to clarify the amount of risk it considers acceptable for an issuer’s mortgage servicing rights portfolio and what administrative actions an issuer with excessive portfolio risk could face. The move is part of the agency’s continuous monitoring of issuer activity and MSR portfolios to ensure they are not putting issuers, investors or the program at risk. In its revised MBS Guide, Ginnie provides examples that fall outside of the acceptable risk parameters. Issuers deemed to carry excessive risk will find their participation in the MBS program greatly restricted, the agency warned. In addition, Ginnie may require offenders to recalibrate their high-risk portfolio to more acceptable risk levels, diversify their portfolio, or restrict their participation in Ginnie’s co-issue program, Pool Issues for Immediate Transfer (PIIT) and/or multiple pools. Ginnie is urging issuers to review the ...

President Trump this week signed a short-term spending bill that would keep the government operating until Feb. 8, 2018. The bill ended a three-day shutdown after the previous spending authority for most of the government expired at midnight on Jan. 19. However, the threat of another shutdown looms. FHA and Ginnie Mae both had contingency plans in place in case the short-lived shutdown dragged on, as it had in 2013. That event lasted for 16 days, at a loss of $1.6 billion a day to the federal government. Under FHA’s emergency plan, the agency would continue to endorse new single-family forward mortgages, but not Home Equity Conversion Mortgages and Title I loans. Ginnie would reduce staffing to essential personnel but continue its secondary market operations. It would continue to remit timely payment of principal and interest to investors, grant commitment authority and support issuance of ...

The daily trading volume in agency MBS averaged $209.1 billion in 2017, the best showing in four years, according to the Securities Industry and Financial Markets Association.

Statistical sampling, which gained widespread acceptance in MBS repurchase cases after the housing crisis, is being rejected in many courts today, legal experts say.

Nonbanks will likely account for over half of outstanding agency single-family servicing by the end of 2018 if market trends continue as they have in recent years.