Lenders that originate home loans to hold in portfolio are concerned about the regulatory consequences of originating non-qualified mortgages. While some have asked for a blanket exemption from liability for non-QMs held in portfolio, Democrats in Congress appear unlikely to approve such changes. “Congress should amend the ability-to-repay statute to grant QM status to all mortgage loans held in portfolio by community banks,” Charles Vice, commissioner of the Kentucky Department of ...
Bank and thrift holdings of home-equity loans continue to decline, according to the Inside Mortgage Finance Bank Mortgage Database. Performance on the loans has been mixed, and there are concerns about the expiring interest-only period on vintage home-equity lines of credit. Banks and thrifts held $1.07 trillion in HELs – HELOCs, unused HELOC commitments and closed-end second liens – at the end of the first quarter of 2013, down 1.8 percent from the previous quarter. TD Bank was ... [Includes one data chart]
The five servicers involved in the $25 billion national servicing settlement have largely complied with the 304 standards included in the settlement. However, Bank of America, CitiMortgage, JPMorgan Chase and Wells Fargo each failed at least one metric tested in the settlement and could face monetary penalties. In a report released last week, Joseph Smith, the settlement’s monitor, said he found eight failed metrics: two by BofA, three by Citi, two by Chase and one by Wells Fargo. Only the ...
Some non-agency participants have called for an immediate return to conforming loan limits of $417,000, which were in place in 2008 before Congress established “emergency” loan limits for high-cost areas.
Looser underwriting standards and concerns about the financial strength and limited operational history of Shellpoint Partners pushed the credit enhancement on the issuer’s pending non-agency MBS to levels not previously seen in the new wave of non-agency MBS issuance. Shellpoint is preparing a $261.58 million non-agency jumbo MBS, according to presale reports released this week. The deal is set to receive a AAA rating with credit enhancement of 10.10 percent on the top-rated tranche. AAA credit enhancement levels on recent deals from Redwood Trust and JPMorgan Chase have ranged...
Wall Street is concerned that the further away a loan is from getting safe harbor protection as a qualified mortgage, the more legal uncertainty and higher costs there will be associated with it.
With the Federal Housing Finance Agency working on a common securitization platform for Fannie Mae and Freddie Mac, market participants are beginning to ask whether the residential finance sector really needs two government-sponsored enterprises. This week, at a policy forum in Washington, MBS co-inventor Lewis Ranieri and former GSE regulator James Lockhart suggested that the industry doesn’t need both Fannie and Freddie. The thinking is that a common securitization platform will facilitate the transition to a standardized GSE MBS, with slight variations, that would eliminate the current pricing differentials between Fannie and Freddie MBS. Speaking at the Bipartisan Policy Center, Lockhart noted...
When rates spiked this week, margin calls to MBS investors increased. Lenders are nervous but next will will be the real test, mortgage executives told Inside Mortgage Finance.
RSS