Marketplace lender Social Finance – a mortgage originator with a track record in securitizing consumer and student loans – has filed for a state bank charter in Utah and is also pondering selling stock to the public. For now, the privately held technology-centric firm isn’t saying much about its plans, including the initial public offering. One source familiar with the company’s mortgage operation said SoFi recently hired one executive away from a larger player by dangling the IPO and stock options. To date, there has been...

One of the most significant variables industry participants are working to address in terms of introducing a deal agent into non-agency mortgage-backed securities is the fee structure. Issuers are trying to balance paying for the services provided by a deal agent without diverting too much cash flow from investors in non-agency MBS. The fee structure will also play a key role in how rating services treat MBS that have a deal agent, with issuers looking for favorable treatment ...

Weeks after the Trump administration banned the practice, the Senate Judiciary Committee is looking into whether the Obama administration used mortgage-related settlement funds to funnel money to political organizations that Congress deliberately defunded. In a recent letter to Attorney General Jeff Sessions, Sen. Chuck Grassley, R-IA, chair of the Senate Judiciary Committee, revived a standing request to the Department of Justice for a list of all settlement agreements reached during the previous administration that involved alleged payments to partisan community organizations. He gave the agency until June 28 to respond to his request. Specifically, Grassley asked...

Ginnie Mae hit a milestone in the MBS market during the first quarter of 2017, edging past Freddie Mac to become the second-largest supplier of single-family MBS in the world. A new Inside MBS & ABS analysis reveals $1.705 trillion of Ginnie 1-4 family MBS outstanding at the end of March, a 2.2 percent increase in just three months. Meanwhile, outstanding single-family Freddie MBS rose 0.7 percent to $1.703 trillion. Both Ginnie and Freddie accounted...[Includes two data tables]

This week, the Federal Reserve’s Open Market Committee provided a bit more information on the process it plans to follow in shrinking the size of its massive balance sheet, once it decides the time is right to finally begin. “Provided that the economy evolves broadly as the committee anticipates, we currently expect to begin implementing a balance sheet normalization program this year,” Fed Chair Janet Yellen said in her post-meeting press conference. The hope is to initiate an incremental and largely predictable decline in the U.S. central bank’s securities holdings. The FOMC intends...

The Trump administration wants to pare back regulations that inhibit the non-agency MBS and ABS market and tilt current securitization economics that favor the government-sponsored enterprises over private issuers. “In order to revitalize a responsible [private-label securities] market, it is important to improve incentives for issuers through reasonable reductions in costs and regulatory burdens,” the Treasury Department said in a new report released this week. In particular, it aimed at adjusting relative economics for the government-sponsored enterprises and FHA/VA mortgage programs. On the regulatory side, Treasury recommends...

The average daily trading volume in agency MBS fell to $185.1 billion in May, the lowest reading of the past 17 months, according to the Securities Industry and Financial Markets Association. Year-to-date, the average is still ahead of last year’s pace but not by much: $204.2 billion compared to $201.9 billion for 2016. But these are interesting times for investors as both bonds and stocks continue to rally near new highs. Earlier this week, the yield on the benchmark 10-year Treasury fell to 2.12 percent, the lowest reading since the November election. It’s...

The U.S. Court of Appeals for the Fifth Circuit rebuffed arguments that would have subjected mortgage lenders and other secondary-market participants to increased liability under the Equal Credit Opportunity Act. In a published opinion that appeared in the Banking Law Journal, the Fifth Circuit court rejected plaintiffs’ argument that mortgage investors that promulgate discriminatory lending guidelines could be held liable as the original creditor. ECOA prohibits...

The agency servicing market grew steadily in the first quarter of 2017, as the business continued to slide toward nonbanks, a new Inside Mortgage Finance analysis reveals. The Federal Reserve late last week reported that total residential mortgage debt outstanding rose 0.7 percent during the first quarter, hitting $10.330 trillion. It marked the eighth consecutive quarterly increase since the sector hit its post-crash low in March 2015 at $9.912 trillion. Most of the growth came from the agency market, although portfolio holdings – including nonbanks – were...[Includes two data tables]