Department of Housing and Urban Development Secretary Shaun Donovan this week reiterated his agency’s request for additional legislative authority to regulate the Home Equity Conversion Mortgage program by mortgagee letter so that much-needed changes can be implemented immediately. Rather than go through the tedious legislative process of amending HECM legislation to improve the program and reduce HECM losses, expanding HUD’s authority would enable the department to undertake immediate reforms, such as restricting lump sum payments, requiring financial assessments of HECM applicants and requiring borrowers to ...

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 ...

The non-agency MBS market produced $8.33 billion in new transactions during the first quarter of 2013, its strongest issuance in nearly two years, and did so the old-fashioned way by relying heavily on “new” prime jumbo mortgages. The first three months of 2013 saw nearly a threefold increase in non-agency MBS issuance compared to the previous quarter and was 65.1 percent ahead of the pace set in 2012, according to a new analysis and ranking by Inside MBS & ABS. Although over half the issuance volume was in re-securitizations and deals backed by servicer advances, the most encouraging sign was the continued rebound in prime jumbo MBS production. Redwood Trust made good...[Includes three data charts]

Citadel Loan Servicing Corp. of Irvine, a new subprime lender launched by industry veteran Dan Perl, funded its first loan last week, and is getting a barrage of telephone calls from potential borrowers to its headquarters in Southern California. “We’re getting 25 to 30 inquiries a day,” Perl told Inside Mortgage Trends. The firm is in the process of evaluating between $1.5 million and $2 million in residential loans. The first mortgage it funded was for $315,000 on a home in Orange County, CA. The ...

Primary market originators and due diligence providers say the elusive market in private placement MBS deals has been gaining strength this year. “We’re seeing three to five private deals a month,” said Jeff Taylor, managing partner of Digital Risk, a New York-based risk management and due diligence firm. As for the underlying product, it’s across the board, he added. “It can be jumbo, nonperforming, and re-performing.” But the deals are also much smaller than the rapidly growing public MBS deals. Digital Risk, which conducts due diligence reviews on the underlying collateral, said...

The non-agency jumbo mortgage-backed security market expanded significantly in the first quarter of 2013, with more new issuance than was produced in all of last year, according to the Inside Mortgage Finance MBS Database. Issuance showed no signs of slowing down entering the second quarter, led by Redwood Trust. Some $3.95 billion in non-agency jumbo MBS was issued in the first quarter, compared with $3.46 billion in issuance in all of last year. The last time non-agency ... [Includes one data chart]

Moody’s Investors Service said it would not have given its highest rating to the jumbo mortgage-backed security issued last week by JPMorgan Chase because of concerns about the deal’s representation and warranty framework and the lack of risk retention by Chase. DBRS, Fitch Ratings and Kroll Bond Rating Agency gave JPMorgan Mortgage Trust 2013-1 AAA ratings with credit enhancement of 7.40 percent on the top-rated tranche. The rating services said the credit enhancement on the deal was ...

With banks starting to issue jumbo mortgage-backed securities instead of holding originations in portfolio, the sector has expanded beyond the two nonbanks that propped up non-agency jumbo MBS issuance since 2010. The activity shows favorable economics for non-agency MBS, including tighter spreads on interest rates between conforming mortgages and non-agency jumbos. The average interest rate on a 30-year fixed-rate conforming mortgage was 3.596 percent this week, according to Inside Mortgage Finance ...

Fannie Mae and Freddie Mac suffered lower losses on their nonprime mortgage holdings in 2012 compared with previous years as mortgage performance has stabilized and investor demand for vintage non-agency mortgage-backed securities has increased. However, the government-sponsored enterprises have not realized profits on their vintage non-agency MBS holdings as they have employed a buy-and-hold strategy since 2008. The GSEs held a combined $103.4 billion of nonprime MBS in portfolio and ... [Includes one data chart]

Springleaf Financial is set to issue another subprime mortgage-backed security backed by vintage originations. The fifth deal from Springleaf since 2011 shows continued demand from investors for non-agency MBS. Springleaf’s $835.11 million MBS will receive a AAA rating with loss coverage of 55.5 percent on the top-rated tranche, according to a presale report released this week by Standard & Poor’s. The average seasoning of the loans is seven years. As with previous Springleaf deals, all of ...