In 2014, Freddie Mac securitized $6.983 billion of re-performing mortgages, double what it did the year prior, and a sign that this niche market is heating up. As for Fannie Mae’s participation in “re-performers,” that’s a different matter entirely. The government-sponsored enterprise has yet to stick its toe in the water, though a spokesman for the company told Inside MBS & ABS that “it’s something we continue to evaluate.” But just how hot might the sector get ...

Mortgages with credit scores exceeding 740 continued to dominate the conventional conforming market in 2014, according to a new Inside Mortgage Trends analysis of loans sold to Fannie Mae and Freddie Mac last year. High-score borrowers accounted for 62.0 percent of loans securitized through the two government-sponsored enterprises in 2014. They accounted for an even bigger 66.2 percent of purchase-mortgages loans ... [Includes one data chart]

The two main types of representation-and-warranty frameworks used in jumbo mortgage-backed securities can both effectively protect investors, according to Moody’s Investors Service. Each framework presents different risks, and industry participants suggest that other aspects of deals carry more importance for investors. Jumbo MBS issued in recent years have largely included either an open-ended rep-and-warrant framework or a prescriptive framework ...

Security issuances backed by FHA and VA loans totaled $267.6 billion in 2014, with several large states accounting for a significant share of FHA/VA originations. An estimated $158.1 billion of FHA-insured loans, including modified loans, were securitized last year, with purchase home loans comprising most of the transactions. Approximately $30.0 billion of FHA refinance loans were securitized as well. The FHA MBS had an average loan-to-value ratio of 92.3 percent and a debt-to-income ratio of 40.1 percent. The average FICO score was 672.3, which was indicative of first-time homebuyers and borrowers with slightly tainted credit. First-ranked California, Texas (#2) and Florida (#3) combined for a total of $48.0 billion, which represented 30.3 percent of FHA loans in Ginnie Mae mortgage-backed securities in 2014. Fourth-ranked New York reported a total of $6.7 billion while ... [ 2 charts]

Issuer registration for Ginnie Mae’s Issuer Performance Scorecard has been somewhat slower than expected, according to agency officials. The reason is unclear but only about 70 issuers so far have registered for Ginnie’s Issuer Operational Performance Profile (IOPP) tool since its launch on Feb. 17, 2015. Officials said they need to sign two-thirds more to get the IOPP system up to full speed. In a recent outreach call, officials urged those issuers who have not yet registered to contact their security officers for authority to access the Ginnie Mae Enterprise Portal (GMEP), the gateway to the IOPP system. Issuers must first be enrolled in GMEP before their security officer can grant them authority to access the IOPP system. The IOPP, also known as the Issuer Performance Scorecard, will rate each issuer’s operational performance and default management and compare them to ...

The representations and warranties used in jumbo MBS can sufficiently handle some breaches but fail to completely protect investors, according to Moody’s Investors Service. In a report released this week, the rating service noted that issuers use two main varieties of reps and warrants: those that allow for an open-ended review of loans and those that employ a prescriptive framework. The open-ended reviews are seen in jumbo MBS from Redwood Trust, WinWater Home Mortgage and others...

Issuers and other participants in future structured-finance deals will face a higher hurdle of data quality expectations from Moody’s Investors Service, according to a new credit rating methodology the company put out this week. An important part of the initial rating analysis that Moody’s will perform of a structured security is an evaluation of the attributes of the assets that underlie it, the document said. “In assessing those characteristics, we typically use...

Issuers of jumbo mortgage-backed securities offered investors variety in two deals that closed last week and an MBS planned for next week. Separate jumbo MBS from WinWater Home Mortgage and FirstKey Mortgage were issued on Feb. 27. The $372.36 million WinWater Mortgage Loan Trust 2015-2 included two non-qualified-mortgages. Debt-to-income ratios above 43 percent caused the two loans to be deemed non-QMs, according to Standard & Poor’s ...

Most mortgage lenders reported solid increases in refinance originations during the fourth quarter of 2014, but the faltering purchase-mortgage sector still accounted for most of their business. A new Inside Mortgage Finance ranking and analysis reveals that refinance originations increased by 16.9 percent from the third to the fourth quarter. Based on securitization figures from Fannie Mae, Freddie Mac and Ginnie Mae, refi activity rose by a more modest 14.0 percent, although these data trail the primary market by one or two months. Meanwhile, purchase-mortgage originations were...[Includes five data charts]

The bid price for “flow” mortgage servicing rights is beginning to soften, having fallen from the peaks seen in the summer of 2014, according to both investors and certain advisors running the deals. But if a buyer of flow product is looking for bargains, it’s not likely to happen anytime soon. In other words, prices have drifted down, but are hardly cheap. In fact, a handful of sources contend that Nationstar Mortgage – one of the most active flow buyers of the past year – has ceased...