Ginnie Mae, Japan Sign Joint MOU; Russia Gets Help In Launching First MI. Ginnie Mae is helping Japan and Russia transition from their current secondary mortgage market structures to the U.S. company’s model. On Jan. 9, Ginnie Mae and Japan Housing Finance Agency signed a joint memorandum of understanding to exchange information and help Japan create a securities program tailored after Ginnie Mae’s successful mortgage-backed securities program. Japanese Prime Minister Shinzo Abe has directed the JHFA to make the transition within three to five years. Under the MOU, the two countries will hold ...

New business activity at Fannie Mae and Freddie Mac fell sharply in the fourth quarter of 2014, but the top tier of mortgage sellers took more than their share of the decline, according to a new Inside Mortgage Trends analysis of mortgage-backed securities data. Total single-family MBS production by the two government-sponsored enterprises declined by 36.1 percent from the third quarter to the fourth quarter of 2013. But the top five GSE sellers posted a combined 45.9 percent ... [Includes two data charts]

Over the past year, home values – including distressed sales – have risen by almost 12 percent, which can only mean good things for sellers of nonperforming mortgages. Investors and auction companies that play in the non-performing loan space are expecting a banner year for sales, but also are quick to caution that every real estate (and loan) market is different. “We auctioned off roughly $11 billion in NPLs in 2013,” said J. Kingsley Greenland, president and CEO of The Debt Exchange, which operates ...

Analysts are predicting a slowdown in the housing market in 2014 with mortgage interest rates trending higher, putting a damper on new applications, and regulatory and political changes pushing down on economic recovery. Noting the strong 12 percent rise in home prices in 2013, analysts at Standard & Poor’s are expecting a 6 percent increase in the S&P Case-Schiller 20-City Home Price Index in 2014. A housing market analysis by Capital Economics, a macroeconomic research firm, says the rapid rise of ...

A white paper circulated last week at the annual meeting of the American Economic Association asserted, somewhat counter-intuitively, that repealing the home-mortgage interest deduction and property-tax reductions would result in lower home prices but higher rates of homeownership. The paper, prepared by Kamila Sommer, an economist with the Federal Reserve Board, and Paul Sullivan, an economist at the U.S. Bureau of Labor Statistics, studied the impact of reducing housing tax expenditures on equilibrium ...

The tendency of borrowers with low credit scores to choose adjustable-rate mortgages over fixed-rate loans is more about economic considerations rather than a lack of financial sophistication, according to a study by Federal Reserve researchers. In the study, Fred Furlong, David Lang and Yelena Takhtamanova looked at factors that influenced lower-credit borrowers to select ARMs over fixed-rate mortgages during the housing boom in early 2000. In general, the research team observed ...

After years of operating in an environment with exceptionally low interest rates, federal regulators are warning lenders of risks as interest rates are expected to rise in 2014. Regulators are particularly concerned about lenders’ exposure to longer-term assets such as mortgages and agency mortgage-backed securities. “The recent increase in long-term interest rates underscores the need to understand and quantify bank vulnerability to rising interest rates,” the Office of the Comptroller of the Currency ...

Originations held in bank portfolios couldn't outpace portfolio runoff, according to a new ranking and analysis by Inside Nonconforming Markets. The dollar volume of first liens in bank and thrift portfolios declined by 0.6 percent in the third quarter of 2013 compared with the previous quarter. Total residential mortgages outstanding increased by a scant 0.1 percent during that time, the first quarterly increase in total mortgages outstanding since early 2008. While banks ... [Includes one data chart]

Recent announcements of revised loan-level price adjustments for the government-sponsored enterprises and risk-based pricing are fueling fears of FHA resurgence in the market. Consistent with the Federal Housing Finance Agency’s stated intent to raise the GSE guaranty fees by about 11 basis points, Fannie Mae and Freddie Mac released revised loan-level price adjustments (LLPAs) on Dec. 16. The upfront fee hike takes mortgage rates for affected borrowers close to FHA pricing levels, according to industry analysts.

The Department of Housing and Urban Development is seeking comment on a policy change that would reduce the FHA’s credit-score threshold from 620 to 580 to allow more manually underwritten borrowers to use compensating factors that would help them qualify for an FHA-insured mortgage loan. The change would strengthen manual underwriting and reduce FHA’s underwriting losses, resulting in more revenue per loan for FHA, HUD said. “The FHA can control costs through risk management practices,” the agency explained in a notice of rulemaking. “The lower costs are a gain to FHA.”