A number of steps have been taken to reform the non-agency mortgage-backed security market but more changes are necessary, according to Michael Stegman, counselor on housing finance policy to the Treasury Department. Last week at a conference hosted by the Bipartisan Policy Center, Stegman detailed regulatory changes necessary to increase activity in the non-agency MBS market along with other changes the industry can work toward. “The last remaining piece of the puzzle is putting in place ...
Ginnie Mae has unveiled new plans for issuer standards as well as steps to boost liquidity in the mortgage servicing rights (MSR) market. Agency officials at a summit hosted by Ginnie Mae this week in Washington, DC, said both actions are designed to avoid issuer failures and to preserve residential mortgage servicing as an economically viable activity and MSRs as an attractive asset class. The officials said changes will be made to Ginnie’s mortgage-backed securities program to support the agency’s transformation from a pre-crisis bank-driven government MBS program to a post-crisis program where non-depositories and smaller financial institutions play a much bigger role. By the middle of next year, approximately a third of Ginnie MSRs will have changed hands over the previous four years, agency officials said. Many of the new owners of the servicing rights are ...
Approved issuers must ensure that loans have the requisite federal insurance or guarantee before bundling them for securitization, cautioned Ginnie Mae. Loans that fail Ginnie’s “loan matching” review will be tagged as “uninsured” and will not be accepted for securitization, according to John Kozak, a Ginnie Mae account executive and a panelist at a conference sponsored by the agency this week. Ginnie Mae uses loan matching to screen for mortgages that may have been endorsed on paper but have not been actually insured or guaranteed by either the FHA, VA or the Department of Agriculture’s Rural Housing Development. Every month, Ginnie Mae takes a certain lender’s entire mortgage portfolio and throws it up against the agency’s insured/guaranteed database in search for loan mismatches. To do this, the agency uses “two-string match” criteria, which consist of a ...
Obama administration officials and federal regulators met recently with mortgage industry representatives to discuss lender overlays and other obstacles preventing borrowers with slightly tainted credit and first-time homebuyers from obtaining a mortgage. Neither administration officials nor industry participants, however, spoke on or off the record about the things that were discussed during the Sept. 17 meeting at the White House. It was also unclear whether both sides have agreed on any solutions to the issues that lenders say are preventing them from lending. Sources, however, said one major issue is lenders’ uncertainty about their legal responsibilities and liabilities, which already have cost the industry billions of dollars in massive legacy settlements. Lenders have complained that even the slightest loan paperwork error could force them out of the ...
Issuers of securities backed by Home Equity Conversion Mortgages created $518 million in new HMBS pools during August, the third largest monthly HMBS issuance this year and the latest month for which HMBS issuance data was available. August’s new issuance total was up slightly from July’s $507 million, according to New View Advisors, which advises financial services clients on capital markets, product development and investment strategies. Ninety-one pools were issued, consisting of 46 original issuance and 45 tail pools. Original HMBS pools are created when a pool of FHA-insured reverse mortgages is securitized for the first time. Tail HMBS issuances are HMBS pools created from the uncertified portions of HECMs that have already had their original HMBS issuance. Tail issuances accounted for about $140 million. Beginning with FY 2014, HECM principal limits were ...
Ginnie Mae this week unveiled a position paper outlining its views and new strategies for its mortgage-backed securities program with greater emphasis on liquidity and on the preservation of servicing rights both as an activity and as an asset class. During a conference it sponsored this week, Ginnie announced a number of initiatives that would help the agency adapt its complex financial and operational structures to a post-crisis secondary mortgage market in which non-depository and smaller institutions are playing a bigger role. Ginnie underscored...
Efforts to reduce the government-sponsored enterprises’ footprint using guaranty fees and loan limits should be left to Congress, according to Bob Ryan, a special advisor to the director of the Federal Housing Finance Agency. Meanwhile, officials at the Treasury Department suggest that the FHFA does have a role in setting policy that will inform any housing finance reform action by Congress. In comments this week at the ABS East conference produced by Information Management Network in Miami Beach, Ryan said the FHFA looks to Congress for direction when considering how to run the conservatorship of Fannie Mae and Freddie Mac. “There is nothing in the legislation that suggests the FHFA should shrink the footprint [of the GSEs],” he said. Ryan said...
With loan originations beginning to taper off this fall and expected to continue that way through yearend, lenders of different stripes likely will step up their sales of mortgage servicing rights in an attempt to make earnings projections. “There’s a ton of activity out there now,” said Tom Piercy, managing member of Interactive Mortgage Advisors, Denver, an MSR advisory and brokerage firm. “We’re the busiest we’ve ever been all year.” Mark Garland, president of MountainView Servicing Group, concurs...
Attorneys for a group of disenfranchised Fannie Mae and Freddie Mac junior shareholders have joined another shareholder group’s motion in federal court asking the government to come clean with all of the documents and records regarding the Treasury’s “Third Amendment” and “net-worth sweep” of nearly all government-sponsored enterprises’ profits. In papers filed last week in U.S. District Court for the District of Columbia, Perry Capital lead attorney Ted Olson asked to join Fairholme Fund’s request for “supplementation” of the record. Both plaintiffs contend the government has failed to provide for court review of the “whole record” as required under the Administrative Procedures Act. “The government is...
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