Credit characteristics continue to vary greatly between the two government-sponsored enterprises in the conventional market and Ginnie Mae. During the first quarter, the average credit score at Fannie Mae was 741.15, slightly below the average 744.73 at Freddie Mac. But the average score for Ginnie business was just 686.91. Purchase mortgages typically have higher credit scores – along with higher debt-to-income ratios – than refinance loans ... [Includes two data charts]

President Trump this week announced Michael Bright as his choice to lead Ginnie Mae, an agency under the Department of Housing and Urban Development, even as Senate Democrats continued to delay vote on his nominee for FHA commissioner. Bright is currently Ginnie Mae’s executive vice president and chief operating officer, though he has been serving as acting president since Theodore Tozer stepped down on Jan. 20, 2017. Tozer served as Ginnie president under the Obama administration for nearly seven years. Bright joined Ginnie on July 11, 2017. Previously, he served as director for financial markets at the Milken Institute and as senior vice president of BlackRock/PennyMac. During his time with Milken, Bright co-authored a paper with Ed DeMarco, former acting director of the Federal Housing Finance Agency and currently president of the Financial Services Roundtable, which proposed to ...

With overall production levels falling, there was a modest increase in several risk vectors of FHA and VA loans pooled in Ginnie Mae mortgage-backed securities during the first quarter of 2018.A new Inside FHA/VA Lending analysis shows the average credit score for FHA loans in Ginnie MBS issued during the first quarter was 671.1, the lowest level since Ginnie began reporting loan-level data on its securities. That was down from 673.2 in the fourth quarter and 679.2 a year ago. Part of the slide in FHA credit scores likely reflects the increased share of purchase mortgages, which typically have lower scores than refinance loans. The same thing happened in the VA market, where average credit scores fell 1.1 points to 707.8 in the first quarter. A year ago, the average VA score was 710.2. Debt-to-income ratios also drifted higher, suggesting more risk of default. Among FHA loans, the average DTI rose to ... [Charts]

An approved issuer suspended last month due to alleged VA loan churning activities is back in Ginnie Mae’s multi-issuer mortgage-backed securities program. Nations Lending, ranked 97th in Inside FHA/VA Lending’s top 100 VA lenders, was reinstated after reaching a confidential agreement with Ginnie Mae, according to a source familiar with the case. The Ohio-based lender has been “fully reinstated and [again] able to use all of Ginnie Mae’s programs that are available for lenders in good faith,” said the source, who asked not to be identified. The source declined to provide details of the agreement, maintaining Nations has been very transparent and was “ahead of the curve” in terms of dealing with the churning problem. “Nations began addressing the issue even before Ginnie took action,” he said. Ginnie neither confirmed nor commented on the report. “The evidence will show what is happening in the ...

Pershing Square Holdings, one of the largest institutional investors in Fannie Mae and Freddie Mac common stock, is doubling down on its investment in the two mortgage giants. But it’s taking a different tack, buying up junior preferred stock rather than increasing its holdings of common. The change in strategy was mentioned in the firm’s annual report to shareholders and comes at a time when the chances of housing-finance reform look nil for 2018. How much PSH paid for the junior preferred is unknown. According to the annual report, “Our preferred stock represents approximately 21 percent of our total investment in Fannie and Freddie, or about 1 percent of net assets.”

The average daily trading volume in agency MBS fell to $215.2 billion in March, the lowest reading of the year and the worst showing since August of 2017, according to figures compiled by the Securities Industry and Financial Markets Association.

The performance and returns offered by credit card ABS differ significantly by the type of firm issuing the deal, according to a recent analysis by Moody’s Investors Service.

Ginnie Mae is considering a tiered rating system to ensure that all participants in its mortgage securities program have sufficient liquidity and capital to meet their counterparty obligations. The agency is still fleshing out the idea of an “A-tier” issuer, which would likely develop into a policy in the near future, said Michael Bright, executive vice president and chief operating officer, during a recent interview with Inside FHA/VA Lending. “An A-tier issuer would be [a company that] has gone above and beyond in helping put together for us a risk management and liquidity plan that does not rely on liquidity providers, and whose defect and cure rates are low,” he explained. Such issuer/servicers also would be well capitalized. Ginnie is developing the metrics for such a system, as well as incentives for the A-tier issuers, Bright said He added that top-rated firms would be eligible for “concierge services” from the ...

The latest update on the single security may signify the next step in GSE reform, according to analysts with Wells Fargo Securities. In late March, the Federal Housing Finance Agency announced that the uniform mortgage-backed security collateralized by Fannie Mae and Freddie Mac loans will launch on June 3, 2019. The framework for housing-finance reform has evolved over time to building on the successful elements of the current market instead of disrupting it, said analysts Vipul Jain, Anish Lohokare and Randy Ahlgren. They noted that the single security seems to be leading toward a single MBS label with catastrophic insurance underwritten explicitly by the government.

Pershing Square Holdings, one of the largest speculators in Fannie Mae and Freddie Mac common stock, is doubling down on its investment in the two government-sponsored enterprises by taking a different tack: Instead of increasing its positions in the common, it’s been buying up the junior preferred as well.