The economic value of the FHA’s Home Equity Conversion Mortgage legacy portfolio fell to negative $0.9 billion in fiscal 2014 due mainly to volatility in long-term house prices and interest rates, according to the latest independent actuarial report on the health of the Mutual Mortgage Insurance Fund. The latest result was a significant improvement from FY 2012, when the fund stood at negative $2.8 billion. In fiscal 2013, the HECM portfolio’s economic value of positive $6.5 billion appeared to be a whopping change from the previous year but that amount reflected a $4.6 billion cash infusion from the forward program and from the $1.7 billion mandatory appropriation, the report clarified. The report also showed a corresponding decline in the HECM capital ratio to negative 1.20 percent. Actuarial projections for fiscal 2015 place the HECM portfolio’s economic value at negative $1.1 billion. The fund’s capital resources for ...

FHA Mutual Mortgage Insurance Fund ended fiscal 2014 in the black but was still far short of its statutory reserve requirement, prompting critics in Congress to renew their cries for FHA reform. An independent actuarial report sent to Congress this week showed that the MMI Fund now stands at $4.8 billion after a gain of nearly $6 billion over the last year. For the first time since 2009, the fund’s capital ratio also crossed into positive territory at 0.41 percent, up 52 basis points from the negative 0.11 percent posted in fiscal 2013. Overall, the economic value of the fund has risen by $21 billion over the last two years because of the aggressive steps the agency took to stabilize and strengthen the fund, the report said. Policy changes led to improved underwriting for single-family mortgages, increased mortgage insurance premiums, stronger loss mitigation policies and higher recoveries, it added. In addition, with ...

“It’s been seven years since the financial crisis, and certainly a lot of things have changed,” said Rui Pereira, managing director at Fitch Ratings.

The Consumer Financial Protection Bureau proposed new servicing requirements this week. Among other changes, the federal regulator proposed requiring servicers to offer loss mitigation to borrowers that have received a loan mod but are in danger of re-default. The CFPB’s servicing rules currently require a servicer to evaluate a borrower for loss mitigation only once during the life of the loan. The proposed rule would also set requirements for ... [Includes three briefs]

The servicing transfer from Wells Fargo to Ocwen Financial that had been on hold for more than eight months was cancelled last week by the two firms. Scrutiny from the New York Department of Financial Services prompted Ocwen to place the transfer on hold in February. The transfer was first announced in January and would have involved servicing on non-agency mortgage-backed securities with an unpaid principal balance of $35.9 billion along with $3.3 billion in mortgages serviced for ...

There’s a growing fear that the CSBS might move to increase capital standards for nonbank originators as well.

The benchmark non-agency mortgage-backed security that the Treasury Department is organizing will vary significantly from recent non-agency MBS. Michael Stegman, counselor on housing finance policy to the Treasury, revealed new details about the planned transaction last week in New York City at the Private-Label RMBS Symposium hosted by the Structured Finance Industry Group and Information Management Network. Stegman said the benchmark non-agency MBS will ideally be ...

The Financial Industry Regulatory Authority revealed recently that a non-agency MBS trader at SG Americas Securities was fired by the firm and sanctioned by FINRA for pre-arranged trading. The self-regulatory organization said that on multiple occasions from 2001 through 2013, Yimin Ge entered into an agreement with counterparties at other institutions to engage in pre-arranged trading. FINRA said such deals violate the Securities Exchange Act as well as FINRA’s rules. The pre-arranged trades involved...

The Royal Bank of Scotland is shutting down its U.S. mortgage trading desk as it proceeds with a new plan to reposition its U.S. business. The announcement came after RBS reconsidered its initial plan disclosed five months ago to pare the mortgage trading unit by two-thirds over the next two years, cutting hundreds of jobs in the process. The plan also included an initial public offering of RBS’ Citizens Financial Group unit. The plan changed...

Home Partners of America, a single-family rental company affiliated with MBS veteran Lewis Ranieri, has been quietly gobbling up homes across the U.S., and may have its eye on tapping the securitization market. “They are very active,” said one associate close to Ranieri, who spoke under the condition his name not be used. Moreover, Home Partners – formerly known as Hyperion Homes LLC – recently received...