Plans at Wells Fargo to issue non-agency mortgage-backed securities in 2017 didn’t come to fruition. But growth limitations recently placed on the bank by the Federal Reserve have prompted speculation that Wells could issue non-agency MBS this year. This month, the Fed issued a cease and desist order that temporarily limits the firm’s maximum total consolidated assets to the level they were as of the end of 2017. The order was one of the last acts of former Fed Chair Janet Yellen, who ...
The federal budget plan released by the Trump administration last week recommended increasing the guarantee fees charged by Fannie Mae and Freddie Mac. Higher g-fees would help non-agency lenders compete with pricing offered by the government-sponsored enterprises, according to the Trump administration. Currently, a 10 basis point fee is added to the GSEs’ g-fees to help support a 2011 payroll tax cut. The fee is scheduled to expire at the end of 2021 and will ...
The difference in interest rates for non-agency jumbo mortgages compared with conforming mortgages is often reported based on average interest rates. According to an analysis by researchers at the Federal Reserve Bank of New York, looking at average rates obscures some major differences in pricing for jumbos and mortgages eligible for sale to the government-sponsored enterprises. The researchers used data from Optimal Blue, a mortgage processor that allows lenders to ...
Ellington Financial is looking to ramp up activity involving non-qualified mortgages after a positive reception for its first mortgage-backed security. In November, Ellington issued a $141.2 million MBS predominantly backed by non-QMs. The deal closed with “excellent execution and strong investor demand,” according to Laurence Penn, president and CEO of Ellington. Investors included Putnam Investments, Janus Henderson Investors and JPMorgan Asset Management. “We had a ...
The nonprime mortgages held in portfolio by the government-sponsored enterprises continued to decline in 2017, according to an analysis by Inside Nonconforming Markets. And while the GSEs sold vintage non-agency mortgage-backed securities during the year, pre-crisis Alt A mortgages guaranteed by Fannie Mae and Freddie Mac are largely running off instead of being sold. Fannie and Freddie had a total of $108.23 billion in nonprime mortgage holdings ... [Includes one data chart]
S&P Global Ratings released a revised methodology and assumptions this week for non-agency mortgage-backed securities issued in 2009 and later. The revision included slightly more favorable treatment of mortgages to multiple borrowers and recalibrated loss severity assumptions, including an over/undervaluation framework that incorporates property values in markets compared with price-to-income ratios. New Penn Financial loosened ... [Includes two briefs]
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