Moody’s Investors Service this week announced a proposed update to its rating criteria for jumbo mortgage-backed securities. Under the proposed criteria, collateral modeling will be based on a new version of Moody’s Individual Loan Analysis tool as opposed to the portfolio analysis tool Moody’s has used since 2008. Navneet Agarwal, a managing director at Moody’s, said the proposed changes set “a new standard for transparency” ... [Includes six briefs]

Bargain prices in the re-performing mortgage market may be a thing of the past.

FHA Commissioner Carol Galante has announced plans to step down from her current post, leaving behind a Mutual Mortgage Insurance Fund that appears well on its way to recovery and a slumping FHA business. Industry response to Galante’s Aug. 12 announcement was mixed. Some stakeholders applauded her toughness and resolve in steering FHA through hard times, while others criticized her for policies that made it more difficult and costly for first-time homebuyers to obtain an FHA-insured mortgage loan. Galante’s nearly three-and-a-half year stint as FHA commissioner was highlighted by her efforts to stabilize the FHA’s ailing Mutual Mortgage Insurance Fund, reduce losses and improve lender oversight. She achieved these goals by creating a comprehensive risk-management structure at FHA, revamping FHA pricing and credit policies, and ...

Redwood, which had 140 active sellers at the end of June, plans to start testing its high-balance loan program with the FHLB system in the fourth quarter of this year.

Weighed down by high premium costs and lender overlays, FHA lost more primary market share to private mortgage insurers and the Department of Veterans Affairs during the second quarter of 2014. Although June’s FHA endorsement numbers have not yet been released, the trend seen in April through May, along with Ginnie Mae securitization data, suggest that FHA business was up a modest 11.5 percent from the first quarter. But that increase provides no comfort to FHA, which saw its market share go down to 33.7 percent, a six-year low. From April to May, FHA forward endorsements rose by 2.4 percent to $10.61 billion. On a year-over-year basis, however, endorsements were down from $21.9 billion in May 2013, according to an Inside FHA Lending analysis of agency data. On the other hand, private MI companies reported a total of $44.19 billion of new insurance written (NIW) during the ... [2 charts]

Two industry trade groups expressed support for consolidating Ginnie Mae’s mortgage-backed securities program and creating a new MBS but they are at loggerheads on some of the details. Commenting on the Ginnie Mae proposal, the Securities Industry and Financial Markets Association (SIFMA) and the Mortgage Bankers Association (MBA) said the disagreements are mostly on how to resolve issues related to winding down the Ginnie Mae I MBS program and providing a conversion option for existing securities. “It is clear that further discussion is warranted, and direct engagement with key stakeholders should be beneficial,” the trade groups suggested. Ginnie Mae has received considerable support from a variety of industry players for its “straw man” proposal to shift to a single MBS program based on the existing Ginnie II. The program now accounts for more than 90 percent of all ...

Reverse mortgages would be included in Home Mortgage Disclosure Act reports under a proposed rule published recently by the Consumer Financial Protection Bureau. The proposed rule would expand the definition of a “covered loan” under HMDA to include reverse mortgages and home-equity lines of credit (HELOCs), which include reverse mortgages structured as open-end HELOCs. Currently, HMDA regulations do not require reporting of HELOCs, although lenders may do so if they choose. Currently, financial institutions only have to report information on a closed-end reverse mortgage if the transaction involves a home purchase, home improvement or refinancing. Among other things, the CFPB has proposed to require that all reverse mortgages and HELOCs be identified by loan type to distinguish them from other categories of ...

Redwood Trust said monetary policy moves by the Fed have left banks saturated with record levels of excess reserves and lower costs of funds.

One non-QM executive who competes with Impac said the company’s forecast likely will not come true. “Right now, this is a very limited market – and there are no securitizations,” he said.

Banks need incentives to issue non-agency mortgage-backed securities instead of holding loans in portfolio, according to boosters of the non-agency MBS market. The Federal Reserve’s monetary policies and capital requirements set by federal regulators have played a role in the shift from non-agency MBS issuance to banks holding loans in portfolio. “Historically, major banks were the predominant sponsors of private-label securities transactions, especially for 30-year jumbo fixed-rate loans, which are not a good asset/liability match for their balance sheets,” officials at Redwood Trust noted in a comment letter submitted to the Treasury Department. In June, the Treasury issued a request for comments on how to increase non-agency activity in the mortgage market. In 2013, only 4.8 percent of the estimated $272.0 billion in non-agency jumbo originations were included...