This week, Ginnie Mae issued an all-participants memo dictating new standards for firms seeking to become issuers, including the stipulation that applicants submit to a corporate credit evaluation. Ginnie said the financial exercise will be “similar to those employed by credit rating agencies.” The evaluation will determine whether an applicant is qualified to be an issuer or whether additional criteria should be imposed even if the basic standards are met. Applicants that rely on a subservicer arrangement will be scrutinized even more. The bulletin also notes that, effective immediately, the agency is implementing new notification requirements for MBS issuers engaged in “certain subservicer advance or servicing income agreements, which do not require prior Ginnie Mae approval, but can impact an issuer’s ongoing liquidity position and financial obligations.” While Ginnie currently permits subservicers to advance ...
Increasingly worried about the financial condition of its largest nonbank issuers amid declining market conditions, Ginnie Mae in late October shot off a liquidity letter to 14 companies, asking them to develop contingency plans. The identity of the firms was not revealed to Inside FHA/VA Lending, but it’s no secret which companies rank among the top echelon of issuer/servicers. The five largest nonbank Ginnie MBS servicers as of Sept. 30 are PennyMac Financial Services, Lakeview Loan Servicing, Freedom Mortgage, Quicken Loans and Mr. Cooper. According to the letter, a copy of which was obtained by this publication, Ginnie wants the companies to develop strategies to right-size their operations. One of the agency’s goals is to lay the groundwork for financial stress tests that all issuer/servicers eventually must meet. Ginnie expects to sit down with the executive management teams of the ...
The Structured Finance Industry Group has welcomed a recent court ruling that allows ABS investors to intervene in a case brought by the Consumer Financial Protection Bureau that aimed to hold securitization trusts liable for violations committed by servicers.
An involuntary bankruptcy of a $630.2 million collateralized debt obligation was dismissed late last week, prompting praise from the Structured Finance Industry Group. Investors in senior tranches of the CDO had sought the bankruptcy, which SFIG warned would have yielded negative consequences for the securitization industry.
Wells Fargo Bank last week agreed to a $43 million settlement with a group of institutional investors to resolve two class-action lawsuits related to certain legacy residential MBS that resulted in huge investor losses.
A new poll being conducted by Inside Mortgage Finance/IMFnews shows that 47 percent of lenders are contemplating originating non-QM mortgages in 2019...
VA mortgage originations fell significantly in the third quarter of 2018 due to a decline in purchase loans and a sharp drop in refinancing from the previous quarter. Rising interest rates and regulatory restrictions were mostly to blame, said lenders. VA production during the third quarter was $40.2 billion, down 21.0 percent from the quarter ago. Volume in the first nine months of 2018 dropped a mere 0.7 percent from the same time period last year. Purchase loans, which comprised 75.3 percent of VA’s guaranty business, were down 12.6 percent. On the other hand, year-over-year production increased 14.0 percent. VA refinance was down 39.0 percent from the second quarter and 18.1 percent on a year-to-date basis. The decline was fueled primarily by an 80.8 percent drop in VA streamline refis or Interest Rate Reduction Refinance Loans from the second quarter. IRRRL endorsements in the third quarter ... [Charts]
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