A number of factors are making new MBS in the to-be-announced market less attractive to investors than MBS issued a few years ago, according to a report from Deutsche Bank Securities. “Aggressive servicers keep picking up market share, credit quality keeps softening and loan balances edge up,” the analysts said. “It adds up to declining quality for TBA MBS.” While those trends certainly aren’t new, Deutsche Bank said...

The Federal Housing Finance Agency is toying with the idea of “grandfathering” the membership of captive insurance affiliates in the Federal Home Loan Bank system, while blocking out others, according to industry observers tracking the matter. Such a final rule would benefit MBS-investing real estate investment trusts that gained entry through a captive. A few years back, several REITs found a loophole in the FHLBank membership rules and exploited it before the FHFA put a moratorium on new captives joining the system. The moratorium expired...

The trade group for private mortgage insurers this week said Fannie Mae and Freddie Mac programs that would allow sellers to obtain deeper MI coverage, up to 50 percent of the home’s value, could help lower guaranty fees charged by the two government-sponsored enterprises. U.S. Mortgage Insurers said greater front-end risk sharing almost doubles the amount of loss protection to the GSEs and allows them to reduce their committed capital for this risk by about 75 percent. As a result, the group noted...

Government-sponsored enterprises Fannie Mae and Freddie Mac will likely exceed their regulator-mandated cap on multifamily support in the aggregate, with Fannie already topping its cap and Freddie lagging a bit in comparison. Fannie already has exceeded its scorecard cap for 2015, with three months of the year yet to go. For the first three months of 2015, Fannie issued $32.2 billion in multifamily MBS, according to figures compiled by Inside MBS & ABS. In the third quarter, Fannie issued...

Fannie Mae said that next year lenders would be able to verify a borrower’s income electronically and find ways to lend to customers with nontraditional credit histories. Fannie announced during the Mortgage Bankers Association convention this week changes to extend credit access to potential borrowers who typically have trouble finding a mortgage. Among those changes announced this week and set to take place in 2016, the GSE will require lenders to use trended credit data when underwriting single-family borrowers through its Desktop Underwriter program. The data, provided by Equifax and Transunion, will allow a more detailed analysis of the borrower’s credit history, according to Fannie. Currently, reports only indicate the outstanding balances and if a borrower has been...

The Federal Housing Finance Agency is toying with the idea of “grandfathering” current captive insurance affiliates in the Federal Home Loan Bank system, while blocking out others, according to industry observers tracking the matter.If the FHFA does so, it would benefit mortgage-backed security investing real estate investment trusts that gained entry through a captive. A few years back, REITs found a loophole in the FHLB membership rules and exploited it before the FHFA put a moratorium on captives joining the system and requested industry comments on the captive angle and other membership rules. The moratorium expired in early 2015 and the 11 regional FHLBs once again began allowing REITs and others – via their captives – to join the system.

As rumors ran rampant over the past few weeks about the White House possibly looking to end GSE conservatorship before a new administration takes reign, Treasury and White House officials said this week there are no plans in the works to recapitalize and release the GSEs. “None of us should be misled by the increasingly noisy chorus of the advocates of recap and release,” said Michael Stegman, the White House’s senior policy director for housing, speaking at this week’s annual Mortgage Bankers Association conference. He added that doing so would “turn back the clock on the run-up to the crisis,” which he said would be “bad judgment and poor stewardship of taxpayer’s interest.”

Mel Watt, director of the Federal Housing Finance Agency, dished on several GSE-related issues, including the common securitization platform and expanding access to credit, at the Mortgage Bankers Association conference in San Diego this week. After announcing last month that the CSP and single security will be launched in two stages, with no confirmation of an exact timeline yet, Watt said, “We realize that there is a degree of impatience and a desire to see all these efforts completed right away. While not in a position to give you specific dates right now, I can confirm that we plan to announce the Release 1 timeline in 2016.” He added that the FHFA also hopes to be able to announce the...

It’s been an active week of GSE announcements with new initiatives, partnerships and increased competition between the duo. This appears to be an acknowledgment that GSE reform is not anywhere in the short-term plan and Freddie Mac, along with Fannie Mae, are taking matters into their own hands to help right the market. Freddie unveiled a partnership with Quicken Loans to modify some of the underwriting guidelines on its low-downpayment mortgage program, Home Possible. While not many details were available, Brad German, Freddie’s spokesman, said, “We're at the start of a work in progress to jointly develop products specifically aimed at the housing needs of millennials, first-time buyers, the middle class and other eligible borrowers.”