A proposal released last week by the Treasury Department could make issuing and investing in non-agency mortgage-backed securities more attractive for banks. The Treasury called for revisions to various regulations that apply to non-agency MBS in a broad report suggesting regulatory reforms for capital markets. “In its review of the securitization market, the Treasury found that regulatory bank capital requirements treat investment in non-agency securitized ...

Originations of jumbo mortgages increased by 16.3 percent in 2016 but the sector’s share of total originations declined somewhat from the previous year, according to a ranking and analysis by Inside Mortgage Finance of newly released Home Mortgage Disclosure Act data. Some $340.88 billion of jumbos were originated in 2016, with banks dominating the ranks of the top lenders. Jumbos accounted for 17.5 percent of total originations last year, down from ... [Includes one data chart]

For originations of jumbo mortgages, it’s California and then everywhere else. The state accounted for 36.7 percent of jumbo lending in 2016, according to an analysis of Home Mortgage Disclosure Act data by Inside Mortgage Finance. Some $124.95 billion in jumbos were originated in the Golden State last year, up 18.2 percent from 2015. New York ranked second with $22.72 billion, accounting for 6.7 percent of total jumbo originations during the year. Jumbos ... [Includes one data chart]

A number of Republicans raised concerns last week about the exemption from qualified mortgage standards currently provided to mortgages eligible for sale to the government-sponsored enterprises. Loans must meet a number of standards to receive QM protections, including having a debt-to-income ratio below 43 percent. However, under the ability-to-repay rule from the Consumer Financial Protection Bureau that took effect in 2014, mortgages eligible for sale to Fannie Mae and Freddie Mac can receive QM status even if they have DTI ratios above 43 percent. The exemption is known as the “GSE patch.”

Ocwen Financial revealed last week that it won’t face enforcement actions from the Securities and Exchange Commission regarding two outstanding investigations. And the nonbank has reached settlements with a number of the state regulators that took actions against the company earlier this year. The SEC was conducting investigations involving Ocwen regarding the use of collection agents and fees and expenses related to liquidated loans and real estate-owned ...

After the standards for qualified mortgages took effect in 2014, few state-regulated banks stopped offering non-QMs, according to a survey by the Conference of State Bank Supervisors. “Non-QM mortgage lending activity appears relatively stable despite the regulatory tumult,” the state regulators said. According to a CSBS survey of more than 600 banks, the share of respondents that don’t offer non-QMs changed from 23.8 percent in 2014 to 26.5 percent ... [Includes one brief]

Ginnie Mae issuers rode a wave of purchase-mortgage lending to deliver $120.46 billion of forward mortgages during the third quarter of 2017, the highest three-month volume for the year, according to a new analysis and ranking by Inside FHA/VA Lending. Third-quarter volume was up 9.6 percent from the April-June cycle. The data excluded FHA reverse mortgages and loan amounts are truncated in Ginnie’s mortgage-backed securities disclosures. Without those limitations, total Ginnie MBS issuance rose 9.5 percent to $123.37 billion in the third quarter. Purchase mortgages were the engine behind the growth. Ginnie issuers securitized $85.35 billion of purchase loans in the third quarter, falling just short of the record $85.41 billion set in the third quarter of last year. Although most Ginnie purchase loans (58.7 percent) were FHA loans, the biggest increase was in such loans guaranteed by the ... [Charts]

Department of Housing and Urban Development Secretary Ben Carson indicated he is open to the idea of moving the Home Equity Conversion Mortgage program out of the FHA Mutual Mortgage Insurance Fund to stem future losses. Testifying before the House Financial Services Committee this week, Carson said the changes the department has made recently, as well as those currently under consideration, will eliminate most of the program’s problems although residual issues may still linger. Carson acknowledged that the HECM program’s default rate has been a drain on the MMI Fund even though it is much smaller than the FHA’s forward loan portfolio. The recently revised HECM rules issued on Sept. 19 have “stopped the bleeding” in terms of new reverse mortgages, he added. However, separating the HECM portfolio from the FHA insurance fund and making it a stand-alone program is ...

Ginnie Mae and the VA this week officially announced a joint-agency task force to deal with the loan-churning problem that is triggering faster prepayments in Ginnie mortgage-backed securities pools. Specifically, the task force will scrutinize aggressive and misleading refinancing offers and address loan churning and repeated refinancings. It will also examine critical issues, data and lender behaviors related to refinancing loans, as well as determine the kind of policy and program changes agencies should make to ensure VA refi loans do not pose an undue risk or burden to vets and taxpayers. Both the VA and Ginnie Mae programs work best when market participants use them to provide a benefit to VA borrowers and, ultimately, lower vet’s costs, officials said. The task force has begun examining data and information to ensure refi loans provide net tangible benefits to veteran-borrowers. In addition, the ...

An estimated 9.8 percent of Ginnie Mae’s business may be potentially at risk due to hurricanes Harvey, Irma and Maria, according to data released recently by the agency. The data represent the number of Ginnie loans and their unpaid principal balance amounts in presidentially declared disaster areas in Texas, Florida, Georgia, Puerto Rico and the U.S. Virgin Islands. A total of 1.07 million mortgage loans with an unpaid principal balance of $184.5 billion have been affected. Ginnie Mae’s current mortgage-backed securities portfolio totals $1.9 trillion. The data only refer to the geographic locations of all affected properties underlying loans in Ginnie MBS pools and do not indicate the percentage of those that may have sustained damage during a storm. Hurricane Irma had the highest share of affected loans, 6 percent, while Harvey and Maria accounted for 3 percent and 1 percent, respectively. Irma caused the ...