From 2005 to 2007 homeowners converted an estimated $823 billion of home equity into swimming pools, cars, hospital bills and other uses. Of course, those days are long gone.

It’s no secret that the securitization market for jumbo loans has been anemic since the housing bust of 2008, but is mortgage insurance a possible panacea? Arch MI recently set up a new subsidiary that will write coverage on jumbo loans as well as portfolio products. In its press statement, Arch said it created Arch Mortgage Guaranty Co. in part to aid lenders that want to securitize. In a recent interview with Inside MBS & ABS, Arch MI President David Gansberg said...

DBRS, which reports its ratings on re-securitizations, actually was involved in more transactions than S&P and ranked second in dollar volume with $6.47 billion.

Fannie Mae and Freddie Mac issued $57.72 billion of single-family mortgage-backed securities in January, a 7.8 percent decline from the previous month, according to a new Inside The GSEs ranking and analysis.Freddie actually increased its monthly volume by 7.3 percent from December levels, but Fannie production fell 15.6 percent. It’s not unusual for GSE monthly trends to fluctuate; Fannie’s MBS issuance was up sharply in December. Freddie’s production was buoyed slightly by some $199.3 million of modified mortgages that were securitized last month. And it’s not surprising that the flow of purchase mortgages into GSE securities fell 14.4 percent in January, as the housing market hit a seasonal cooling.However, refinance activity was also [includes exclusive charts] ...

The Federal Housing Finance Agency continues to analyze the issue of principal reductions for Fannie Mae and Freddie Mac loans, but Director Mel Watt made it clear recently that unless it’s a “win-win” for both the borrower and the GSEs, the issue is a non-starter with him. Moreover, in a press briefing, he made it clear that at some point the FHFA may take the issue off the table entirely. “We’re doing a lot of work on this,” Watt said, suggesting that if a program ever sees the light of day, principal reductions would be done “in a responsible way.” The FHFA has come under political pressure from left-leaning members of the Democratic Party, including Sen. Elizabeth Warren of Massachusetts ...

Federal Housing Finance Agency Director Mel Watt has repeatedly said that GSE reform should be left to Congress. However, industry analysts suggest that the FHFA’s actions under Watt are helping to build a foundation for legislation. Michael Stegman, counselor to the Treasury Department for housing finance policy, said the FHFA’s actions are helping to create bipartisan consensus for provisions to be included in GSE reform. He pointed to the common securitization platform, risk-sharing transactions and capital standards for private mortgage insurers. Stegman said the FHFA’s actions are just a starter, particularly because Watt’s actions could be reversed by the next director of the FHFA. The Treasury official was among the speakers who addressed the current state of the GSEs at ...

The Federal Housing Finance Agency isn’t providing a timetable on when it might decide the thorny issue of captive insurance companies becoming members in the Federal Home Loan Bank system. In a recent press briefing, FHFA Director Mel Watt also clarified that he is not presuming that any current members or applicants want to “abuse” their membership benefits, but said the agency must still go through the process of fielding comments on a proposal that would effectively ban captives from joining the system.Roughly 18 current members of the FHLBanks are affected by the proposed ban, seven of which are affiliated with real estate investment trusts. Captives do not write coverage outside of their own company. Traditional insurance companies that ...

Recently proposed new minimum financial eligibility requirements for Fannie Mae and Freddie Mac seller/servicers – including net worth, capital ratio and liquidity criteria – appear to be less restrictive than expected but may give an edge to large nonbanks over smaller players and new entrants, analysts say.Announced Jan. 30 by the Federal Housing Finance Agency, the eligibility requirements consist of three primary components. In terms of minimum net worth, the proposed requirement for all seller/servicers is a base of $2.5 million plus 25 basis points of unpaid principal balance for total loans serviced. As far as minimum capital ratio is concerned, the proposed requirement for all non-depository seller/servicers is to have tangible net worth/total assets greater than 6 percent. “Depository institutions ...

The Federal Housing Finance Agency is not fulfilling its statutory responsibility to preserve Fannie Mae and Freddie Mac in conservatorship, according to a legal analysis by former government officials. The GSE conservatorships, particularly under the current arrangement that siphons off nearly all of their earnings, violates the terms of the Housing and Economic Recovery Act of 2008, said Michael Krimminger and Mark Calabria. Krimminger was formerly an expert on bank receiverships at the Federal Deposit Insurance Corp., and Calabria was a Republican staffer at the Senate Banking, Housing and Urban Affairs Committee when HERA was being drafted and enacted. Their paper argues that crippling Fannie and Freddie by preventing them from rebuilding capital is exactly the opposite of the way...