With new issuance faltering in 2014, the net supply of residential MBS in the market declined by 0.3 percent during the second quarter of 2014, according to a new Inside MBS & ABS analysis. MBS outstanding totaled $6.348 trillion at the end of June, wiping out gains made in the second half of last year. It was the lowest MBS outstanding number since 2006. The agency MBS market grew...[Includes three data charts]

The Treasury Department is working on at least two initiatives aimed at boosting issuance of non-agency mortgage-backed securities, following more than four years of industry-driven reform efforts that haven’t attracted enough attention from investors. “The private-label securities market is virtually dormant,” Olga Gorodetsky, a senior policy advisor at the Treasury, said this week at the ABS East conference produced by Information Management Network in Miami Beach. The Treasury is considering working with ...

A number of steps have been taken to reform the non-agency mortgage-backed security market but more changes are necessary, according to Michael Stegman, counselor on housing finance policy to the Treasury Department. Last week at a conference hosted by the Bipartisan Policy Center, Stegman detailed regulatory changes necessary to increase activity in the non-agency MBS market along with other changes the industry can work toward. “The last remaining piece of the puzzle is putting in place ...

There’s plenty of consumer demand for loans that don’t meet the standards for qualified mortgages, according to industry participants. But more than a year after the Consumer Financial Protection Bureau established standards for non-QMs, lenders and investors are still trying to determine the liability posed by the mortgages. Jay Lown, president of Cherry Hill Mortgage Investment, a real estate investment trust managed by Stan Middleman, chairman and CEO of Freedom Mortgage, said Freedom is ...

Originations of higher-priced mortgages increased significantly in 2013 compared with the previous year, according to an Inside Nonconforming Markets analysis of Home Mortgage Disclosure Act data released this week. The market share for higher-priced mortgages also more than doubled in 2013 compared with the previous year, but the loans continue to account for a small portion of total originations. Some $35.18 billion in higher-priced mortgages were sold in 2013, up from ... [Includes one data chart]

Obama administration officials and federal regulators met recently with mortgage industry representatives to discuss lender overlays and other obstacles preventing borrowers with slightly tainted credit and first-time homebuyers from obtaining a mortgage. Neither administration officials nor industry participants, however, spoke on or off the record about the things that were discussed during the Sept. 17 meeting at the White House. It was also unclear whether both sides have agreed on any solutions to the issues that lenders say are preventing them from lending. Sources, however, said one major issue is lenders’ uncertainty about their legal responsibilities and liabilities, which already have cost the industry billions of dollars in massive legacy settlements. Lenders have complained that even the slightest loan paperwork error could force them out of the ...

Ginnie Mae securitized a relatively higher volume of loans for African-American borrowers than did Fannie Mae or Freddie Mac, according to a new Inside FHA Lending analysis of recently released Home Mortgage Disclosure Act data covering 2013 mortgage originations. Nearly a quarter, 24.7 percent, of mortgages made to black borrowers last year had FHA, VA or rural housing loans financed through Ginnie Mae, loan-level HMDA data show. Fannie Mae (19.2 percent) and Freddie Mac (9.9 percent) also accounted for large shares of mortgages for black borrowers. However, blacks accounted for just 4.2 percent of mortgages with the race of the primary borrower identified in HMDA reports. Fannie actually had a bigger share of the Hispanic market (24.7 percent), but Ginnie accounted for a substantial 17.3 percent of mortgages made to Hispanic borrowers last year. All three agencies saw ... [1 chart]

The supply of 1-4 family mortgage debt declined again in the second quarter of 2014 despite an uptick in whole loans held in bank, thrift and credit union portfolios, according to an Inside Mortgage Finance analysis. The Federal Reserve Board late last week reported $9.855 trillion in single-family mortgage debt outstanding at the end of June. That was down $4.9 billion from March – a scant 0.05 percent decline, but the second straight quarterly downturn. The increase in mortgage debt outstanding in the third quarter of 2013 increasingly looks like an aberration rather than a turning point. The most recent figure is...[Includes one data chart]

Attorneys for a group of disenfranchised Fannie Mae and Freddie Mac junior shareholders have joined another shareholder group’s motion in federal court asking the government to come clean with all of the documents and records regarding the Treasury’s “Third Amendment” and “net-worth sweep” of nearly all government-sponsored enterprises’ profits. In papers filed last week in U.S. District Court for the District of Columbia, Perry Capital lead attorney Ted Olson asked to join Fairholme Fund’s request for “supplementation” of the record. Both plaintiffs contend the government has failed to provide for court review of the “whole record” as required under the Administrative Procedures Act. “The government is...

The market outside the pristine parameters of the Consumer Financial Protection Bureau’s qualified mortgage offers less-competitive opportunity and potentially sizeable legal risk, according to panelists participating in a webinar sponsored this week by Inside Mortgage Finance. Brian Simon, chief operating officer for New Penn Financial, noted that the regulatory environment makes a move into non-QM lending much more complicated than in the past because the risks for the originator and the purchaser now are greater than they’ve ever been. However, Simon added: “A high degree of difficulty usually results in higher yield and opportunity.” The New Penn executive predicted...