After more than a year under President Trump, the MBS and ABS markets have seen minimal loosening of standards from federal regulators. Issuers are optimistic that reforms are coming as federal agencies have been more receptive to feedback, while investors are fighting for risk-retention requirements to be maintained.
New York Attorney General Eric Schneiderman this week announced a $500 million settlement with Royal Bank of Scotland to resolve allegations of misconduct in the sale and issuance of non-agency MBS leading up to the 2008 financial crisis.
Donald Lampe, a partner in Morrison & Foerster, said: “the basic design of the no-action letter process was not very effective from day one,” because of excessive burdens it imposed on applicants.
Before going into government service, Bright co-authored a housing-finance reform paper with former Federal Housing Finance Agency Acting Director Ed DeMarco…
Issuance of non-agency mortgage-backed securities backed by non-qualified mortgages could triple this year, according to Jeremy Schneider, a senior director at S&P Global Ratings. According to Inside Nonconforming Markets, $4.08 billion of expanded credit non-agency MBS was issued in 2017, with non-QMs accounting for a large share of the issuance. Schneider and other industry participants discussed non-QMs at the SFIG Vegas conference produced by Information ...
The Senate started consideration this week of a regulatory reform bill that includes a provision to expand the definition of qualified mortgages. The bill has some bipartisan support and could pass the Senate, with companion legislation potentially approved by the House later this year, according to industry analysts. The Senate next week is scheduled to resume consideration of S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act, which would loosen ...
Ginnie Mae is considering a risk-sharing pilot that would have private capital absorb some of the potential losses on FHA loans securitized through the agency. In remarks at the Structured Finance Industry Group conference in Las Vegas recently, Michael Bright, executive vice president and chief operating officer with Ginnie, said no decision has been made on any credit-enhancement structure, as consultations with stakeholders are still ongoing. “We are actively looking at structures we can put in place where we bring in private capital to provide a [partial] guarantee,” explained Bright, Ginnie’s acting president. “The FHA is going be involved in a lot of them.” A risk-share partnership between FHA and private credit enhancers not only would protect the Mutual Mortgage Insurance Fund but reduce taxpayer risk as well, observers said. The risk-sharing concept would have private mortgage insurers assuming ...
The volume of FHA and VA loans securitized in Ginnie Mae pools in 2017 declined from the previous year, according to an analysis of agency data. FHA loans delivered into Ginnie mortgage-backed securities last year totaled $250.5 billion, down 8.7 percent from 2016. Purchase loans comprised 69.6 percent of Ginnie MBS issuances backed by FHA loans over the 12- month period, while refinances accounted for 24.8 percent. FHA borrowers had an average FICO score of 675.3, suggesting a more traditional borrower base of first-time homebuyers and borrowers with credit issues. The FHA loans that were securitized had an average loan-to-value ratio of 92.8 percent and a debt-to-income ratio of 41.3 percent. California led all states in FHA mortgage securitization, with $39.0 billion for all of last year. FHA originations, however, dropped 16.6 percent year-over-year. The other top states in terms of ... [ charts ]
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