The Department of Housing and Urban Development this week issued more detailed guidance to changes in the FHA Lender Insurance Program based on a final rule published in the Federal Register in January 2012. Under the LI program, high-performing direct endorsement lenders have the authority to conduct pre-endorsement reviews and endorse loans. Mortgagee Letter 2013-12 supersedes guidance HUD issued last month and provides additional details on initial and continuing eligibility for Lender Insurance. It also talks about HUD monitoring of program participants as well indemnification procedures, which were discussed in ...
The Department of Housing and Urban Development has announced plans to consolidate multifamily hubs nationwide and close a number of its smaller field offices. The plan would result in an estimated $61.9 million in annual costs savings for HUD after completion and affect approximately 900 of the departments 9,300 employees. No employee will be laid off as a result of the restructuring, according to HUD Secretary Shaun Donovan. Donovan said the changes are part of a broader, long-term effort that will allow HUD to continue to deliver high-quality services by adapting modern best practices. The decision to ...
Fannie Maes plan to unload, potentially, billions of dollars of non-performing residential loans has been delayed and may be killed, according to industry officials whove been tracking the project. Its going nowhere, but its not like theres a requirement for them to say so publicly, said one advisor who is a vendor to Fannie. The GSE, to date, has declined to discuss the issue along with its regulator, the Federal Housing Finance Agency. Fannie has been working on an NPL sale for close to a year, and even hired an investment banker, Milestone Advisors LLC, to guide it through the auction process. Initially, it had hoped to offer a package of $250 million of delinquent home mortgages for sale to the highest bidder.
The Financial Stability Oversight Council issued a warning this week regarding the prolonged period of low interest rates, singling out real estate investment trusts that invest in agency mortgage-backed securities. Agency REITs, a sector that how grown considerably in recent years, are highly exposed to a rise in interest rates, said Trent Reasons, a senior policy advisor at the Treasury Department. An analysis of 16 REITs by Inside MBS & ABS, an affiliated publication, determined...
Ginnie Mae is seeking feedback from dealers, issuers and investors about whether to continue to maintain two separate mortgage-backed securities programs or to consolidate them under a single security. Comments are also being sought on other possible options. Bloomberg.com recently reported that Ginnie Mae sent out questionnaires to Wall Street broker-dealers for their input on the future of both the Ginnie Mae I and Ginnie Mae II MBS programs. The agency has been considering whether it should merge the programs for some time. The Ginnie Mae I single-issuer pool program with stringent pooling requirements began in ...
Officials at the Securities and Exchange Commission and the Financial Industry Regulatory Authority met this week to consider increasing pricing transparency on fixed-income products, including publishing transaction information on private-placement ABS. Investors have called for greater pricing transparency on ABS issuance private placements and SEC-registered deals while issuers warn that such disclosures could increase costs or reduce their willingness to issue securities. In addition to meeting with the SEC, FINRAs board of directors met...
GSE single-family securitizations rose just under 1.0 percent during the first three months of 2013, compared to the previous quarter, yet it was the single highest level since the second quarter of 2009 as mortgage lenders delivered $355.8 billion in home loans to Fannie Maes and Freddie Macs securitization programs, according to a new Inside The GSEs analysis. Fannie and Freddie activity peaked in January with GSE volume declining slightly in both February and March. Januarys huge increase compared to the previous month may reflect lenders intent to hold secondary market sales until the new GSE representation and warranties went into effect on Jan. 1.
The new central counterparty for MBS trades is having a difficult time delivering results and is, in fact, experiencing a drawback because of stringent margin rules as well as other internal issues, according to financial advisory firm NewOak Capital Advisors. The regulated multilateral central counterparty trading platform for executing to-be-announced agency MBS is not at full power because most TBA participants are not doing what they are supposed to, observed Ron DVari, chief executive officer and co-founder of NewOak. The key drawbacks are...
Ginnie Mae issuance fell in the first quarter of 2013 but was easily offset by significant gains from a year ago, according to Inside FHA Lendings analysis of FHA data. Mortgage-backed securities production at the government facility dropped 5.1 percent to $104.1 billion in the first quarter but increased 28.6 percent year-over-year , which was more than enough for an offset. The securities were backed mostly by FHA and VA loans with a combined total of $99.33 billion. Federally guaranteed rural housing loans totaling $4.84 billion were also in the mix. Wells Fargo and Chase Home Finance led the Ginnie Mae market with a combined ... [1 chart]
The International Accounting Standards Board has proposed an accounting treatment that would force holders of all but the most senior tranche of an MBS to account for those assets at fair value through net income something that has the Mortgage Bankers Association expressing concern. The MBA generally supports the introduction of fair value through an other comprehensive income (OCI) classification for financial assets held within a business model in which assets are managed both in order to collect contractual cash flows and for possible sale, according to James Gross, vice president of financial accounting and public policy for the trade group. However, the MBA has...