In late December, issuers of new non-agency MBS will become subject to new risk-retention requirements. It’s not clear whether anyone will notice. The vast majority of loans securitized in jumbo MBS over the past few years meet the qualified-mortgage standard. And because federal regulators opted to synchronize the QM standard with the separate qualified residential-mortgage standard, jumbo MBS backed entirely by QMs will be exempt from the 5 percent risk-retention requirement. When the final rule came out, Redwood Trust backed...
Banks and nonbanks, in general, are doing a better job of servicing “challenged” mortgages and MBS these days, according to a new report from Fitch Ratings. However, concerns remain. Fitch noted that residential servicing costs “continue to rise in concert with increased compliance focus and enhanced regulatory scrutiny.” Moreover, “Higher regulatory capital requirements may become a factor too, especially for smaller servicers.” Over the past two years, Fannie Mae, Freddie Mac and Ginnie Mae have all ushered...
A 10 basis point surcharge on Fannie Mae and Freddie Mac guaranty fees that went into effect in 2012 could end up being extended for another five years as lawmakers on Capitol Hill look for money to back the federal government’s Highway Trust Fund. The 10 percent increase in the government-sponsored enterprises’ g-fees was designed to pay for an extension of a federal payroll tax cut. It is currently scheduled to run to 2021, generating $35.7 billion in revenue, according to the Congressional Budget Office. With transportation funding set to expire Oct. 29, the House this week approved...
The Federal Reserve’s zero interest rate policy lives to die another day, as the Fed’s Open Market Committee opted this week to hold the line on a rate increase, as it has since December 2008, leaving investors and other market participants to try to read the tea leaves as best they can. “To support continued progress toward maximum employment and price stability, the committee today reaffirmed its view that the current 0 to 0.25 percent target range for the federal funds rate remains appropriate,” the FOMC said in its much-anticipated statement, issued mid-week. In making its decision about whether to raise the target range at its next meeting, scheduled for mid-December, the Fed said...
It makes sense that Fannie Mae/Freddie Mac g-fees should be used to pay for highway repairs. After all, people drive on highways to reach their homes which were bought with mortgages likely guaranteed by the two.
JPMorgan Chase was set to issue its latest jumbo mortgage-backed security as Inside Nonconforming Markets went to press. The bank’s sixth jumbo MBS of the year was slated to be a $344.87 million deal, according to presale reports. Chase continued to stock its jumbo MBS with loans that have seasoned a while longer than other issuers. Loans in JPMorgan Mortgage Trust 2015-6 had seasoned for an average of nine months, according to DBRS. Nearly 20 percent of the mortgages appear to have application dates from before Jan. 10, 2014. All of the loans subject to standards for qualified mortgages were deemed...
Questions from Inside Nonconforming Markets prompted the Consumer Financial Protection Bureau to acknowledge last week that its director misspoke during a speech at the Mortgage Bankers Association’s annual convention. In arguing that the CFPB’s ability-to-repay rule hasn’t caused a significant reduction in mortgage originations, Richard Cordray said last week that “most” jumbo loans are non-qualified mortgages. While comprehensive data on the non-QM share of jumbo mortgages is not available, a number of data sources suggest that most jumbos are in fact QMs, not non-QMs. Three of the five largest jumbo lenders told...
Citadel Loan Servicing, Irvine, CA, one of the most active nonprime residential lenders in the market, is on track to fund a company-record $400 million worth of mortgages this year, more than double what it produced last year. In a brief interview with Inside Nonconforming Markets this week, company founder and CEO Dan Perl said his goal for next year is $1 billion – all in loans that do not meet the qualified-mortgage standard. If the privately held Citadel – Perl is the chief shareholder – can hit...
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