Reverse mortgage lenders, consumer groups and certain advocates for the elderly are urging Congress to enact legislation passed recently by the House of Representatives granting the FHA additional authority to govern its reverse mortgage program. Testifying before the Senate Banking Subcommittee on Housing, Transportation and Community Development, the groups said the most productive action Congress can take is to pass H.R. 2167 to allow HUD to make expeditious changes to the Home Equity Conversion Mortgage program through mortgagee letters. The bill, which the House approved on June 12, would ...

Deep-freezing the Home Equity Conversion Mortgage program’s full-draw, fixed-rate standard product apparently has not diminished borrowers’ appetite for reverse mortgages as indicated by a significant increase in HECM originations in the first quarter of 2013. FHA endorsements under the HECM program surged 36.2 percent during the first three months of 2013, with lenders reporting $3.84 billion at the end of the quarter, according to Inside FHA Lending’s analysis of FHA data. Volume was also up a modest 5.3 percent from the same period a year ago. The Department of Housing and Urban Development announced the ... [1 chart]

During an Inside Mortgage Finance webinar on Thursday, participants from expressed frustration on the ability to get new jumbo MBS deals because of the recent rapid rise in rates.

Assured Guaranty Municipal Corp. will terminate a lawsuit it has pending against Flagstar Bancorp and will not pursue any future related claims under a settlement agreement the two entities announced last week. Under the agreement’s terms, Flagstar will pay Assured $105 million to settle the suit filed by the Bermuda-based bond insurer in 2011 related to $902 million of non-agency MBS it insured in 2005 and 2006 that were backed by home-equity lines of credit. The suit claimed the HELOCs did not comply with the representations and warranties made by the bank. In February, a New York federal judge ruled...

“This has been a particularly challenging week,” said Peter Sack, a managing director at Credit Suisse, during a webinar hosted this week by Inside Mortgage Finance. The yield on the benchmark 10-year Treasury has increased significantly in the past month, making pricing on non-agency jumbo MBS unattractive for issuers. In addition to issuing its own jumbo MBS, Credit Suisse has served as an underwriter on a number of deals, including the non-agency MBS from Shellpoint Partners that priced this week after a slight delay due to rapidly increasing interest rates and other pricing metrics. Analysts at FBR Capital Markets said...

The SEC will push for admissions of guilt as part of settlements of lawsuits it files against private industry, including participants in the MBS market.

It appears that Cerberus is going down the mortgage aisle one more time. Let's hope it doesn't end like GMAC. Meanwhile, jumbo MBS market seizes up, temporarily.

Participants in the non-agency mortgage-backed security market are concerned about the strength of the sector as interest rates and other pricing metrics have increased significantly in recent weeks. “When the 10-year Treasury rate started to rise recently and the mortgage interest rate spread out by 20 basis points, the non-agency MBS market spread out by 50 basis points,” said Lewis Ranieri, chairman of Ranieri Partners, at a forum hosted by the Bipartisan Policy Center last week. “And given there’s ...

Shellpoint Partners issued its first non-agency jumbo mortgage-backed security this week, which differs in a number of ways from non-agency MBS issued since 2010. The deal is an attempt to loosen – slightly – non-agency MBS underwriting standards, although the rating services were critical of the originator, New Penn Financial. Shellpoint Asset Funding Trust 2013-1 was initially planned as a $261.58 million non-agency MBS, according to presale reports issued last week. The deal was reportedly restructured ...

The preferences of investors and the rating services play a significant role in the characteristics of mortgages included in non-agency jumbo mortgage-backed securities, according to industry participants. “The rating agencies are a first part of the analysis, but investors in these bonds are paying very careful attention to these loan characteristics, to credit exceptions and to who the lenders are,” Peter Sack, a managing director at Credit Suisse, said this week at a webinar ...