Credit Suisse issued a large prime non-agency mortgage-backed security this week with an unprecedented lack of disclosure: the single lender that provided loans for the deal wasn’t identified in presale reports. Fitch Ratings and Morningstar Credit Ratings placed AAA ratings on the $1.60 billion CSMC 2018-J1 Trust. It is the second largest post-crisis non-agency MBS backed by new originations. All of the loans in the deal were “acquired from a single originator in a bulk purchase ...

Several non-agency mortgage-backed securities closed before the end of the second quarter. A nonprime deal in the works from Verus Mortgage Capital could be issued early in the third quarter. JPMorgan Chase closed two non-agency MBS in June: a $938.2 million issuance backed by loans from Chase and other originators and a $490.5 million deal backed by a variety of seasoned mortgages originated by First Republic Bank. Some 59.2 percent of the mortgages in the larger Chase deal ...

Fannie Mae and Freddie Mac holdings of nonprime mortgage assets continued to decline in the first quarter of 2018, although changes in how the two government-sponsored enterprises report this data make comparisons to earlier periods difficult. Fannie reported $3.42 billion fair market value of its nonprime MBS holdings as of the end of March, though this appears to result from moving some of these assets from its available-for-sale portfolio to ... [Includes one data chart]

The issues behind the Department of Housing and Urban Development’s draft FHA condominium rules are “too complex” but lenders may expect a final rule in September, said HUD Secretary Ben Carson. Carson’s announcement of a release date for the long-anticipated condominium rules eases the mounting pressure on the secretary and the department to finalize the draft rules. On June 18, 54 senators and 120 members of the House signed a letter urging Carson to implement the changes in H.R. 3700, the Housing Opportunity Through Modernization Act, which would ease FHA requirements for financing condo purchases and refinancings. The bill was signed into law on July 29, 2016, and HUD published a proposed condo rule two months later. “We have been pushing it,” Carson said during a House committee oversight hearing this week. “It is a complex issue because when you are talking ...

HUD Publishes ANPR in Disparate-Impact Regulation. The Department of Housing and Urban Development published an advanced notice of proposed rulemaking in the June 20 Federal Register, seeking comments on possible changes to its 2013 disparate-impact regulation. The ANPR requests public input on whether the 2013 regulation and the supplemental 2016 Application of the Fair Housing Act’s Discriminatory Effects Standard to Insurance are consistent with the U.S. Supreme Court ruling in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc. USDA Pilot Aims to Provide Homeownership Opportunities to Native Americans. The U.S. Department of Agriculture is launching a pilot program to help more Native Americans become homeowners. USDA is collaborating with two native Community Development Financial Institutions to increase ...

Ginnie Mae has added a new metric to make it easier for approved issuers to track the prepayment rates of single-family loans underlying they have delivered into mortgage-backed securities. The new prepayment metric would enhance Ginnie’s Issuer Operational Performance Profile (IOPP) tool, which was launched in 2015 to help issuers measure their performance against the agency’s standards. The new tool is the latest move by Ginnie to ensure the integrity and market predictability of Ginnie MBS. The prepayment tool will be available to lenders beginning June 25. The announcement follows an agency administrative action last week against three VA lenders that were penalized for cherry picking and refinancing unseasoned VA loans not to benefit borrowers but to charge them higher fees. The lenders – Freedom Mortgage, SunWest Mortgage Co. and NewDay USA – were among nine issuers that ...

Now that Housing and Urban Development Secretary Ben Carson has sworn in a new FHA commissioner, reverse mortgage lenders are hoping to see some changes in the Home Equity Conversion Mortgage program. The National Reverse Mortgage Lenders Association is planning to ask FHA Commissioner Brian Montgomery for changes in the HECM program, particularly at the back end, to make it more profitable for lenders. Peter Bell, the group’s chief executive officer, believes there are opportunities to reduce the cost of the HECM program to the FHA fund by having better servicing procedures. “We would like to see certain loss mitigation procedures in the new HECM rules to be made available to all reverse-mortgage loans,” he said. Some of those procedures apply only to loans originated on or after the new rules became effective, such as “cash for keys.” Cash for keys is a cash offer by a lender to a ...

Bipartisan legislation was introduced recently in the House to addresse problems arising from the use of the False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act in the context of mortgage insurance claims. Co-sponsored by Reps. Josh Gottheimer, D-NJ, and Lee Zeldin, R-NY, the bill would provide certain restrictions and clarifications on false claims and civil actions related to loans with FHA, VA or U.S. Department of Agriculture guarantee. H.R. 5993, the Fixing Access to Credit Act of 2018, has been sent to the House Financial Services Committee and to the House Committee on the Judiciary. A Civil War statute, FCA seeks to deter fraud against the government by providing hefty penalties for violations and establishing a 10-year statute of limitations to file civil claims. Enacted in the wake of the savings and loan debacle in the 1980s, FIRREA outlawed abusive lending and ...

Expanded-credit products look to be a ray of sunshine in an otherwise gloomy mortgage market. Originations of the loans increased in the first quarter of 2018 while production in many other product categories declined, according to a new ranking and analysis by Inside Nonconforming Markets. An estimated $10.1 billion of expanded-credit mortgages were originated in the first quarter of 2018, up 3.1 percent from the previous quarter and a 13.5 percent ... [Includes one data chart]

The amount of jumbo mortgages handled by a large group of servicers increased in the first quarter, according to a new ranking by Inside Nonconforming Markets. The 30 servicers handled an estimated total of $1.05 trillion in jumbos as of the end of March, up 1.4 percent from the end of 2017 and a 13.5 percent increase from March 2017. Growth in jumbo servicing significantly outpaced trends in total mortgage debt outstanding. Some $10.65 trillion ... [Includes one data chart]