Fitch Ratings announced last week that non-agency MBS with a unique structure will be eligible to receive AAA ratings. The rating service said deals with a shifting-interest structure are now eligible for the top ratings after previously limiting ratings on such deals to single-A. Both DBRS and S&P Global Ratings have assigned AAA ratings to some MBS backed by re-performing mortgages where the deals had shifting-interest structures. MBS with such structures distribute...

Ginnie Mae will not have an annual summit this year but has rescheduled it for January 2018, according to Ginnie Mae’s new spokesperson. Michael Huff, senior advisor, congressional and stakeholder relations, said a new administration and staff departures have caused organizers to reconsider having the annual Ginnie Mae Summit this year, usually held in October. The Trump administration has yet to announce a nominee for the top job at Ginnie Mae since former president Ted Tozer left in January. David Kittle is reportedly a leading contender, but there has been no official announcement or confirmation. So far, Kittle has declined to comment. Kittle is a mortgage industry veteran who began as a loan officer and now heads his own company. He also was a top executive with the Mortgage Bankers Association and managed, among other things, the group’s political action committee. In addition, Kittle co-founded the ...

Ginnie Mae this week announced the full automation of Platinum securities processing and issuance – a key step in modernizing the agency’s outdated technology and infrastructure. Automation went into effect in mid-July and nearly $1 billion of the Platinum pools have been processed through the MyGinnieMae portal, the agency said in a statement. MyGinnieMae is a self-servicing portal that connects users and enables collaboration and the sharing of organizational knowledge, the agency explained. The year-to-date volume for Platinum mortgage-backed securities is $6.1 billion. Ginnie’s Multiclass Securities Program allows participating issuers to pool some of their MBS into a single Platinum trust, which issues securities based on the pool. A Platinum security is designed to improve liquidity of Ginnie MBS through trades or use in structured finance and repurchase transactions. Previously, Platinum products were ...

Large banks continue to dominate the business of servicing Fannie Mae and Freddie Mac home loans, but a group of hard-charging non-depository institutions are gaining ground. A new Inside The GSEs analysis of Fannie and Freddie mortgage-backed securities disclosures shows that total single-family MBS outstanding actually declined slightly, by 0.1 percent, during the second quarter. This was due to a 0.3 percent drop in Fannie MBS servicing – the figures do not include servicing of whole loans held by the enterprises – while the Freddie market grew 0.3 percent. Some 46.2 percent of Fannie/Freddie MBS servicing was held by banking organizations with more than $100 billion in assets. That included four of the top five GSE servicers and seven of the top 10.

Bipartisan Flood Bill Introduced in Senate. The Senate Committee on Banking, Housing and Urban Affairs will soon consider a bipartisan bill introduced this week that would keep the National Flood Insurance Program funded for six more years and create new risk mitigation procedures for communities to follow.Senate Banking Committee Chairman Mike Crapo, R-ID, and ranking Democrat Sherrod Brown, OH, said the bill would serve as a template for consideration by the whole committee. The Senate bill does not include core provisions in the House version, including the development of a private flood insurance market to complement the NFIP. In addition, the bill does not call for cuts in the reimbursement rate for Write-Your-Own flood-insurance carriers that service NFIP policies. However, amendments are likely, according to Crapo and Brown. Meanwhile, the ...

Fannie Mae and Freddie Mac issued $189.70 billion of single-family mortgage-backed securities during the second quarter of 2017, a 13.1 percent drop from the first three months of the year. A new ranking and analysis by Inside The GSEs reveals that much of the decline resulted from a slowdown among large banks and thrifts. The four banks with over $1 trillion in assets delivered just $43.23 billion of home loans into Fannie/Freddie MBS during the second quarter. That was down 29.1 percent from the previous period, knocking the group’s combined market share down from 27.9 percent in the first quarter to 22.8 percent.

Pricing disparity between the GSEs has almost disappeared since single-security efforts began, according to a new paper by the Urban Institute. The authors called the progress on the initiative an “unheralded success” in a paper released this week. In 2012 and 2013, Freddie’s 3, 3.5, and 4 percent coupons traded at more than a $0.30 discount to Fannie Mae’s. That number narrowed to about $0.15 in 2014 and 2015 and by early 2017 it had largely converged, said the UI. “Interestingly, the pricing disparity has all but disappeared since the single-security effort began,” said Laurie Goodman, Jim Parrott and Bing Bai, authors of the study.

Ginnie Mae issuers were moderately busier in the second quarter of 2017 than during the first three months of the year, according to a new analysis and ranking by Inside FHA/VA Lending. Issuers produced $112.71 billion of single-family mortgage-backed securities during the second quarter, including MBS backed by FHA home-equity conversion mortgages. It was a 5.5 percent increase from the previous period and brought year-to-date issuance to $219.51 billion, down 0.7 percent from the first half of 2016. The quarterly uptick in total issuance may not sound like much, but contrasts sharply with production at Fannie Mae and Freddie Mac, which dropped 13.1 percent from the first to the second quarter. Ginnie volume was up because it had a deeper vein of purchase-money mortgages than there was in the government-sponsored enterprise market. Purchase loans accounted for 63.4 percent of ... [Charts]

Chicago HECM Lender Arraigned on Fraud Charges. Mark Steven Diamond, a mortgage loan originator with offices in Chicago and Calumet City, IL, was arraigned on fraud charges in connection with a $7 million reverse mortgage scheme that targeted elderly homeowners and FHA lenders. According to the Department of Justice, Diamond deceived lenders into making FHA-insured reverse mortgage loans to homeowners who did not apply for a loan or had been beguiled to do so by the smooth-talking suspect. Diamond allegedly pocketed title-company checks intended for the borrowers, with the help of an unindicted co-schemer. Cynthia Wallace, who posed as a representative of the Department of Housing and Urban Development, was indicted along with Diamond. Using at least three aliases, Wallace allegedly collected money from victims for home repairs, which she claimed Diamond would ...

An analysis of non-qualified mortgages suggests that many of these borrowers have credit qualities strong enough to qualify for a mortgage that could be delivered to the government-sponsored enterprises. However, issues involving credit events and income documentation can disqualify such borrowers from conventional mortgages. According to an analysis by Morningstar Credit Ratings, the weighted-average loan-to-value ratio for securitized non-QMs is 75.2 percent and the average debt-to-income ratio on the loans is 36.6 percent. The rating service noted that QMs (including agency and non-agency mortgages) have an average LTV ratio around 69.0 percent and an average DTI ratio around 32.3 percent. In addition to showing that certain characteristics don’t differ much between QM borrowers and non-QM borrowers, the analysis suggests...