The state of Oregon this week inked a deal with the Treasury Department to use Troubled Asset Relief Program funds to help refinance underwater non-agency mortgages in what’s believed to be the first such initiative under the Obama administration’s Hardest Hit Fund program. The program, which will be tested in Multnomah County, OR, will roughly parallel the Home Affordable Refinance Program for underwater Fannie Mae and Freddie Mac mortgages. It’s also similar to a proposal developed by Sen. Jeff Merkley, D-OR, that would create a new federal agency to refinance underwater non-agency mortgages using funds generated through a new bond program. Many observers see...
Securitization of nonperforming loans has increased significantly since 2009, with ever greater issuance expected this year. However, industry participants warn that requirements in the Securities and Exchange Commission’s proposed revision Reg AB will effectively extinguish the market for NPL securitization. Ryan Stark, a director at Deutsche Bank Securities, noted that since the collapse of the non-agency market, issuance involving nonperforming loans has far outpaced issuance of new non-agency MBS. He said about 30 nonperforming loan deals were completed from 2010 through the end of 2012, most without ratings. Issuance of NPL securities started...
Lenders of Fannie Mae and Freddie Mac mortgages say that recently rolled out GSE guidelines intended to boost refinance activity won’t do any harm but also won’t likely have more than a modest impact. The GSEs’ recently issued guidance will soon allow lenders to offer a “refinancing incentive” to underwater borrowers so they may obtain a lower payment or move to a more stable product or a shorter term. …
Private mortgage insurers in 2012 posted their best year since the financial market collapse back in 2008 and suddenly – after being largely left as roadkill in the government’s bailout program – are attracting new capital. Private MIs reported $174.81 billion in total new insurance written in 2012, more than doubling the amount of business they did the year before, according to a new Inside Mortgage Finance ranking and analysis. With the FHA and VA programs growing at a more deliberate pace, it boosted the private MI share of the primary mortgage insurance market to 32.0 percent, up from 22.7 percent in 2011. A significant part of the private MI rebound came...[Includes three data charts]
A new final rule from the Department of Housing and Urban Development may make it harder for lenders to defend against allegations of racially discriminatory policies and even more difficult to structure an effective compliance program under the Fair Housing Act, according to legal experts. Issued last week, the rule provides that HUD or a private plaintiff can establish a so-called disparate-impact liability under the FHAct, even if there is no intent to discriminate. The agency said the rule establishes no new law – since HUD and appellate courts have upheld the disparate impact theory in fair housing cases for decades – and aims to standardize the minor variations for determining liability under the statute. The rule establishes...
FHA single-family production rose 22.3 percent in 2012, but another increase in the mortgage insurance premiums will likely accelerate the program’s three-year decline in market share.
The Department of Housing and Urban Development released its long-awaited “disparate impact” final rule last week, formalizing for the first time the long-held interpretation of the Fair Housing Act by HUD, which has repeatedly asserted that housing policies and practices can be determined to be discriminatory not simply through their intent, but also by their effect. “As we’ve learned over the years, housing discrimination comes in many forms. Discrimination doesn’t have to be intentional in order to have a damaging...
Federal regulators suggest that a number of changes are under consideration for risk-retention requirements initially proposed in 2011. Two changes under consideration include a revision of the qualified residential mortgage definition and a possible alternative to the controversial proposed premium capture cash reserve account. Katherine Hsu, chief of the office of structured finance in the division of corporation finance at the Securities and Exchange Commission, said federal regulators are considering changing the proposed definition for QRMs due to the recent ability-to-repay rule from the Consumer Financial Protection Bureau that set requirements for “qualified mortgages.” The QRM standards cannot be any more broad than the QM standards. Speaking at the American Securitization Forum’s ASF 2013 conference last week in Las Vegas, Hsu also stressed...
New issuance of agency single-family MBS jumped 25 percent from December to January, according to a new Inside MBS & ABS ranking and analysis. The most likely explanation for the sudden jump in agency MBS issuance may be that new, more seller-friendly repurchase policies at Fannie Mae and Freddie Mac went into effect for loans sold after Jan. 1, 2013. The revamped policies generally provide that the government-sponsored enterprises will not seek repurchase or indemnification for loans that perform for the first three years after origination. In the case of Home Affordable Refinance Program loans, repurchases will be waived...[Includes one data chart]
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