In late December, Freddie Mac issued a $934.27 million security backed by seasoned mortgages. It was the first seasoned credit-risk transfer from the government-sponsored enterprise. While Freddie has issued fully guaranteed securitizations backed by seasoned mortgages, Freddie Mac Seasoned Credit Risk Transfer Trust, Series 2016-1 included tranches without a guarantee from the GSE, similar to a non-agency senior-sub MBS. The transaction included...
The incoming Trump administration has yet to pick a new president for Ginnie Mae, but foreign investors will be keeping a close eye on the selection for the simple reason they own a ton of the agency’s MBS. According to Sept. 30 figures provided to Inside MBS & ABS, foreign investment in Ginnie MBS is now at a record $552 billion, or roughly 35 percent of all outstanding securities. The agency could not provide...
The only word from the incoming Trump administration about the fate of Fannie Mae and Freddie Mac is that the prospective Treasury secretary wants to bring them out of conservatorship. The Obama administration, however, commits only to preserving an explicit government guarantee for a “defined class” of MBS. “The explicit government guarantee would be funded by financial institutions and would act as insurance against catastrophic losses,” said the Treasury in a late December blog posting by Jane Dokko, deputy assistant secretary for financial economics, and Sam Valverde, a counselor in the Office of Domestic Finance. However, the authors don’t elaborate on what would shape the defined class. Under the new guarantee, investors would be assured...
With structured finance performance having peaked for many sectors, analysts at Fitch Rating and S&P Global Ratings anticipate some modest asset-level deterioration in 2017 – most notably in both prime and subprime auto ABS. On the other hand, they expect relatively stable performance from credit card ABS. “Both prime and subprime auto ABS loss rates could be...
The denial rate on jumbo mortgages varies significantly among lenders, according to an Inside Nonconforming Markets analysis of data from the Home Mortgage Disclosure Act. Among the top 25 lenders, denial rates for jumbo applications in 2015 ranged from a low of 2.3 percent to a high of 76.8 percent. Overall, the top 25 lenders denied 18.1 percent of the $367.49 billion in total unpaid principal balance for jumbo-mortgage ... [Includes one data chart]
Industry stakeholders are anticipating an FHA insurance premium reduction soon from the Department of Housing and Urban Development. Sources say a 25-basis-point premium reduction is in the works and HUD Secretary Julian Castro may announce it during his farewell address. His last day in office is Jan. 20, President-elect Donald Trump’s inauguration day. A HUD representative declined to comment on the report citing department policy against “commenting on rumors.” A number of lobbyists and consultants said they have heard similar reports but cautioned it is not a done deal. Two industry executives expressed certainty about the veracity of the report. The idea of a premium cut has been raised with neurosurgeon Dr. Ben Carson, Trump’s nominee for HUD secretary, who will have his Senate confirmation hearing on Jan. 12. A mortgage insurance premium reduction at this time would ...
The FHA this year will focus mainly on the completion and implementation of the Defect Taxonomy to help lenders easily identify and categorize loan defects found in FHA-insured loans. At least that was the plan announced by the outgoing Obama administration. The agency urged lenders to be on the lookout for detailed information about Defect Taxonomy and other process improvements in the coming months. “As we begin to implement these changes and transition from current processes, some lenders may experience a temporary decrease in loans selected for review,” the FHA noted in Lender Insight, which updates lenders on the latest rulemakings and policy changes. Announced in June last year, Defect Taxonomy is part of the Blueprint for Access, which embodies three core concepts: identifying a defect, capturing the sources and causes of a defect, and assessing the ...
The initial material defect rate for FHA-insured loans targeted for a quarterly post-endorsement review increased to 53 percent in the third quarter from 50 percent in the previous quarter, according to test results. Published in the FHA’s quarterly Lender Insight, the results were from post-endorsement technical reviews conducted between July 1, 2016, and Sept. 30, 2016, on 5,973 FHA loans. The initial material defect rate appears to be trending upward since June 2016, when it had stayed flat at 47 percent over the previous eight quarters. The latest loan sample was comprised of 75 percent purchase loans, 10 percent streamline refinances, 7 percent rate-and-term refis, and 8 percent Home Equity Conversion Mortgage loans. Of the targeted loans, 23 percent met FHA requirements but an equal percentage were found to be “deficient,” while 12 percent were deemed “unacceptable” due to ...
The lack of experience in housing and mortgage financing matters could become a sticking point with Dr. Ben Carson, President-elect Donald Trump’s nominee for Housing and Urban Development secretary, during his Senate confirmation hearing on Jan. 12, according to stakeholders. “Democrats, in particular, will want to know his credentials and positions on various housing and enforcement issues,” said an industry observer. “There is doubt whether Carson can address such questions positively and specifically. ‘Living for a while in public housing’ is not a qualification to run HUD or oversee FHA for that matter.” However, Trump’s selection of Carson and other conservatives for cabinet positions signals his intent to govern from the right – a complete reversal from the eight years under President Obama. Notwithstanding his lack of housing expertise, Carson is on the path to promote and ...
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