Real estate investment trusts that focus on investing in residential MBS continued to see declines in their portfolios during the second quarter, but their earnings outlook may have improved somewhat this week, analysts say. Residential mortgage REITs held a combined $327.3 billion of single-family MBS as of the end of the second quarter, according to a new market analysis by Inside MBS & ABS. That was down 5.4 percent from the previous quarter, and it was the third straight quarterly decline since REIT MBS holdings reached a high of $374.2 billion in September 2012. REIT MBS holdings are...[Includes one data chart]
The Department of Housing and Urban Development has issued a final rule aligning its streamlined reporting requirements for small lenders with those of federal banking regulators. HUDs regulations currently require all supervised lenders and mortgagees, regardless of their asset size, to submit annual audited financial statements as a condition of FHA lender approval and recertification. Federal banking regulators, on the other hand, do not require their small supervised lenders to submit audited financial statements, but allow them to submit unaudited financial regulatory reports. Unaudited financial reports include a ...
Late last week, the Consumer Financial Protection Bureau finalized revisions to some of its 2013 mortgage rules slated to take effect in January mostly mortgage servicing and loan originator compensation regulations whether the industry is ready or not. The amendments and clarifications that the bureau proposed in June and now finalized via a final rules on Sept. 13 include a number of changes sought by various industry groups. There were no big surprises between June and September, but some overlooked details, one of which was the CFPB determining that seller-paid points can be excluded from the 3 percent points-and-fees test for qualified mortgages under its ability-to-repay rule. Sellers points...are excluded...
Mortgage lenders reported originating $2.01 trillion in home-purchase and refinance mortgages during 2012, a 43.7 percent increase from the prior year, according to a new Inside Mortgage Finance analysis of Home Mortgage Disclosure Act data released this week. Because HMDA data typically capture a relatively small share of home-equity originations and some small lenders dont report at all, the total originations number for last year was somewhat higher. Interestingly, the origination volume grew...[Includes one data chart]
A number of lenders in July stopped offering mortgages with characteristics outside of those allowed for qualified mortgages, according to the Mortgage Bankers Association. The MBA said credit availability declined in August after four months of loosening. The slight decline in the Mortgage Credit Availability Index in August reflected a reduction in the availability of certain loan features, particularly interest-only and terms exceeding 30 years, said Mike Fratantoni, the MBAs vice president of research and economics. As these loan features are outside of the QM definition, these changes may reflect the beginning of QM implementation, and the fact that Fannie Mae and Freddie Mac are limited to acquiring loans that meet the QM definition. The MCAI is...
Securities issuers won a major victory as the revised proposed rule on risk retention issued by federal regulators last week removed the requirement for a premium capture cash reserve account. The highly controversial PCCRA was replaced with a fair value calculation requirement for retention which regulators said will increase the value of retained risk compared with the original proposal. The ASF is extremely pleased to see the elimination of the premium capture cash reserve account provisions from the re-proposed rule, said Tom Deutsch, executive director of the American Securitization Forum. The provisions would have completely eliminated the economic incentives of securitizers to issue residential MBS and commercial MBS. The original proposal generally measured...
Revised risk-retention requirements proposed last week by federal regulators for certain non-mortgage ABS and commercial MBS are somewhat looser than the standards initially proposed in 2011. Perhaps most significantly, blended pools would be allowed for commercial mortgages, commercial real estate loans and auto loans, allowing issuers to mix qualifying loans and non-qualifying loans in the same security. Securitized loans that dont meet qualifying underwriting standards will be subject to the 5 percent risk retention as required by the Dodd-Frank Act. Blended pools would be eligible for reduced risk retention, as low as 2.5 percent. The agencies believe...
Six federal regulators, including the Federal Housing Finance Agency, re-proposed risk-retention requirements, as well as the definition for qualified residential mortgages this week, making significant changes that had been sought by lenders. The new proposal revises a proposed rule the agencies issued in 2011 to implement the risk-retention requirement of the Dodd-Frank Act. Among other things, the rule would recognize the full guaranty on payments of principal and interest provided by Fannie Mae and Freddie Mac for their residential mortgage-backed securities as meeting the risk-retention requirements while the two GSEs are in conservatorship or receivership and have capital support from the federal government.
The Federal Housing Finance Agency is ignoring a clear directive to rehabilitate Fannie Mae and the GSE conservators failure to restore the firm to financial health has come at the cost of the companys common shareholders, according to a new lawsuit filed against the government earlier this week. Fannie shareholders Bryndon Fisher and Bruce Reid filed suit against the United States government, as well as Fannie as a nominal defendant, in the U.S. Court of Federal Claims. This latest shareholder lawsuit does not challenge the legality of Fannies placement into conservatorship in September 2008.
Cancelled Furlough Days. The Department of Housing and Urban Development has reduced the number of furlough days from seven to five days due to progress made in achieving the $69.6 million spending cuts mandated by sequestration. In this regard, previously scheduled furlough days of Aug. 16 and Aug. 30 are cancelled. As the end of FY 2013 approaches, HUD is making significant progress towards reaching its sequestration target, without needing additional furlough days, said Deputy Press Secretary George Gonzalez of HUDs Office of Public Affairs. Government-wide automatic spending cuts became effective ...