The non-agency mortgage-backed security market could be revived this year by economic factors rather than efforts by Congress or industry participants, according to analysts. The non-agency share of mortgage originations has been relatively strong in recent years, but the loans were largely held in bank portfolios instead of included in non-agency MBS. Legislative reform of the government-sponsored enterprises and potential incentives for non-agency MBS issuance look ...

Issuers of Ginnie Mae mortgage-backed securities pushed a record $435.80 billion of government-insured loans through the program during 2015, according to a new Inside FHA/VA Lending analysis and ranking. Last year’s total Ginnie MBS issuance topped the previous record of $429.50 billion issued during 2009. The $435.80 billion total for 2015 includes securitization of FHA home-equity conversion mortgages and other single-family loans guaranteed by FHA, the VA, and the Department of Agriculture rural housing program from Ginnie pool-level MBS data that are not truncated. Production in 2015 hit its high-water mark in the third quarter with $128.23 billion in issuance, and then fell 18.0 percent in the final three months of the year. Purchase mortgages continued to account for most Ginnie business in 2015, 58.0 percent of the agency’s forward-mortgage securitizations. But a huge factor in the ... [ Charts ]

FHA lenders are uneasy over whether issues raised by the Consumer Financial Protection Bureau’s new integrated disclosure rules could affect FHA lending. Although the issues cited by lenders are not FHA issues per se, these lenders are concerned that such uncertainties may cause problems for their FHA business, according to mortgage industry consultant Brian Chappelle, a principal at Potomac Partners. For example if a lender cures a mistake and the cure results in a reimbursement of, say, $100 to the borrower at closing, would that be considered a violation of the Department of Housing and Urban Development’s minimum 3.5 percent cash-investment requirement for FHA loans. “I don’t think it is a violation, but lenders are worried about how HUD might interpret it,” said Chappelle. “It is well after closing and it is obviously not a gift given to the borrower. It is ...

Quicken Loan attempt to have a governmen false-claim lawsuit against the lender moved from Washington, DC, to a federal court in Detroit will not necessarily secure a win, according to a mortgage industry attorney. “I think it was more the device Quicken needed in order to become the plaintiff instead of the defendant,” said one attorney who preferred to remain anonymous because his firm handles other legal matters for Quicken Loans. He said it does not matter whether the case is tried in Washington or Detroit but what matters is its actual substance. At the same time, there is no reason why those defenses could not be raised in a DC court, the attorney added. Last month, a federal judge in Detroit dismissed Quicken’s preemptive lawsuit against the Department of Housing and Urban Development and the Justice Department for failure to state a claim. Ultimately, the court ...

The Department of Veterans Affairs has issued a clarification for non-borrower spouses on VA title documents, which apparently has created some confusion when lenders try to foreclose on VA-backed properties. VA is aware that lenders occasionally make loans to veterans who wish to use their home loan benefit to purchase a home and include their spouse in ownership, but the spouse does not wish to be on the mortgage loan. Including the spouse on the deed but not on the mortgage note can create a problem if the VA loan goes into foreclosure because the non-borrowing spouse’s ownership in the property could defeat the foreclosure action, the VA explained. “Delaying or preventing a foreclosure increases foreclosure claim cost to the government and the veteran,” the agency said. According to the VA guidance, when a loan is originated that includes a ...

The Department of Veterans Affairs has posted a chart on its web site showing the revised maximum allowable foreclosure timeframes for each state in 2016. State foreclosure timeframes are used in calculating the maximum interest payable on a foreclosure of a VA loan. They are subject to annual reviews and revised as needed. The chart reflects maximum allowable foreclosure periods that include the 210 calendar days for unpaid interest as well as foreclosure periods without the 210 days. Specifically, the chart shows timeframes the VA has determined to be “reasonable and customary” for all states, following an annual review of amounts allowed by other government-related home loan programs, such as FHA, Fannie Mae and Freddie Mac. The chart also lists the maximum amounts that will be paid on a claim processed in the ...

Interactive Mortgage Advisors is auctioning off $3.02 billion in Ginnie Mae residential mortgage-servicing rights for an undisclosed client. According to IMA, the seller is a “well-known, independent mortgage banker with very strong net worth and well-versed in servicing transfers.” The loans are being sub-serviced by LoanCare. The MSR package consists of 17,989 loans – FHA (15,288) and VA (2,610) – with an average loan size of $168,886. The yield on the underlying mortgages is 4.069 percent. The service fee is 0.2917 percent. An estimated 8.92 percent of all loans in the deal are delinquent. Approximately 3.07 percent of the loans are either in bankruptcy or in foreclosure. The top states in the transaction are Texas, which accounted for 11.4 percent of all loans; California, 9.6 percent; Florida, 8.1 percent; and New York, 5.8 percent. The deadline for ...

The first rated securitization backed by nonperforming Home Equity Conversion Mortgage loans contains strong, credit-positive features that outweigh the credit risk associated with nonperforming loans, according to a Moody’s Investors Service analysis. The effect of some of these positive features on the performance of Nationstar HECM Loan Trust 2015-2, however, depends on whether Nationstar Mortgage remains as servicer for the transaction, said the rating agency. Nationstar has a servicer rating of B2/Stable from Moody’s and is also the transaction’s sponsor. Nationstar issued NHLT 2015-2 in November 2015 and by the end of December, the first remittance report showed strong initial performance. Credit enhancement to the Aaa (sf)-rated notes increased by 1.69 percent in the first month of operations, Moody’s noted. “As long as Nationstar continues to be the ...

Radian Guaranty became the first among seven private mortgage insurers to declare compliance with the regulatory capital standards under the Private Mortgage Insurer Eligibility Requirements (PMIERs). Radian met its PMIERs goals after receiving $325 million in cash and marketable securities from its parent Radian Group in exchange for a surplus note. In addition, the parent firm contributed $50 million to an exclusive affiliated reinsurer of Radian Guaranty. Radian Group expects the capital cushion to increase based in part on expected future financial performance at its MI subsidiary. Monies from other sources, including a profit commission of about $8 million based on performance to date, and $8.5 million in prepaid supplemental ceding commission also contributed to the MI’s capital. Hence, Radian Guaranty is not expected to require any additional capital contributions in order to ...

Although residential production increased by roughly 30 percent in 2015 over the year prior, investors beat down nonbank mortgage stocks with a vengeance as continued low interest rates forced huge markdowns on the value of servicing rights. According to an analysis of eight publicly traded nonbank lender-servicers by Inside Mortgage Finance, the stock prices of these firms are currently trading at steep discounts to their 52-week highs, with most a dollar or two above their lows. ...