Despite the Federal Housing Finance Agency’s misgivings about Property Assessed Clean Energy programs, ABS issuers are finding investors for deals backed by these loans. Since March 2014, three rated residential ABS transactions and one private unrated commercial deal backed by PACE assessments have been issued for a combined total of $503.65 million. All three residential ABS deals were rated “AA,” with average assessments totaling $59,628. The PACE program was launched in 2008 by the city of Berkeley, CA, as a pilot to promote energy efficiency in residential, commercial, agricultural and industrial properties...
The stock market hasn’t been treating real estate investment trusts that buy MBS very well of late, but there could be better news on the horizon: prepayment rates on the securities they own are coming down. As Barclays noted in a recent report: “Prepays fell for most cohorts, led by recent vintage 3.5s and 4s.” The investment banking firm added: “Next month, we expect speeds to remain mostly stable as seasonal factors and a 12 basis point rally in driving rates (3.83 percent vs 3.95 percent) helps offset another one-day drop in day count (20 days vs 21 days).” Several mREITs tracked...
Fannie Mae and Freddie Mac continued to follow orders and prune their retained investment portfolios – and potential future income – during the first quarter of 2015. But the government-sponsored enterprises ended the period holding more of their own MBS than when it started. The combined Fannie/Freddie mortgage investment portfolio fell 0.5 percent during the first quarter of 2015. Under their conservatorship agreement, each GSE is required to reduce its mortgage portfolio to $250 billion by the end of 2018. They each have a little over $150 billion more to go and, as of the end of March, 15 quarters to do it. The Federal Housing Finance Agency has directed...[Includes one data chart]
Big banks in recent years likely focused their refinance efforts on loans in agency MBS that had been purchased by the Federal Reserve, according to a working paper by economists at the Fed. John Kandrac and Bernd Schlusche noted that agency MBS held by the Fed exhibit faster prepayment rates than MBS held by the rest of the market. While some analysts have pinned the prepayments on refi activities by nonbanks, the Fed economists said they found that Bank of America, Citigroup, JPMorgan Chase and Wells Fargo played a large role in the high prepayment rates for agency MBS purchased by the Fed. The economists noted...
Mortgage servicing rights are playing an important role in how mortgage lenders finance their businesses, experts say, and a more balanced MSR market is expected this year despite persistent regulatory concerns and worries about high servicing costs. It was clear from a panel discussion at the Urban Institute this week that MSRs have grown in importance as a form of collateral and that it continues to divide lender/servicers and consumer advocates. Overall, six panelists agreed that certain reforms are needed if the market expects to thrive in the current environment. Stephen Fleming, senior vice president with Phoenix Capital, expects...
Compliance attorneys are urging mortgage lenders to reevaluate their lending policies and practices to ensure they are not biased against any protected groups even as the Consumer Financial Protection Bureau warned about increased focus on fair lending and redlining in 2015. In their analysis of the CFPB’s recent report on fair lending, attorneys with the Washington, DC, law firm K&L Gates warned that the bureau will increase its scrutiny of mortgage lending amid growing concern about redlining, or refusal to lend to certain groups of borrowers or neighborhoods. Attorneys Melanie Brody and Anjali Garg said...
Exams of nonbank servicers in 2014 were “significantly extended” due to consistent delays in receiving information, according to a recent report by the Multi-State Mortgage Committee. The committee handles supervision of nonbank servicers and lenders that operate in more than one state. Some servicers were even found to have tampered with their loan collection logs prior to providing them to examiners. Many of the problems were related to growth at nonbank servicers, according to Rick St. Onge, chairman of the MMC and examination chief of the division of consumer services at Washington State’s Department of Financial Institutions. “Over the year, large bulk loan transfers took place...
Mortgage industry participants are encouraged by a bipartisan bill introduced in the House last week that would provide a temporary license for loan originators transitioning from a bank to a nonbank or between states. H.R. 2121, from Rep. Steve Stivers, R-OH, would change the Secure and Fair Enforcement for Mortgage Licensing Act to allow for a temporary transitional license and give loan originators 120 days to pass testing standards for nonbank LOs when transitioning from a bank or between states. “The SAFE Act inhibits...
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