The Federal Housing Finance Agency ordered the two GSEs to sell at least 5 percent of their “less-liquid” mortgage assets, meaning whole loans and non-agency securities. CMBS are arguably the most liquid of these.
The retail share of new residential originations declined slightly, to 60 percent, in the fourth quarter after climbing steadily during the first nine months of the year.
For Ginnie Mae mortgage-backed securities issued in January 2013, the average reported credit score was 701 and the average DTI ratio was 38.0. By December, the average FHA credit score was down to 680, while the average DTI ratio was up to 40.3.
Mortgage-banking income reported by banks and thrifts rose 12.7 percent from the third to the fourth quarter of last year, according to a new analysis of call-report data by Inside Mortgage Trends. The fourth-quarter surge brought annual earnings from mortgage banking to $25.857 billion in 2013.
Overall, the group reported a 5.8 percent increase in total mortgage banking income – which for some firms includes activity not captured in either production or servicing – during the fourth quarter.
Bank and thrift MBS holdings fell by 4.6 percent during 2013, and by the end of the year, they were down 7.8 percent from the all-time high of $1.634 trillion reached at the end of March 2012.
Industry participants expect that volume will continue to grow as investor demand for commercial MBS remains strong despite some loosening of underwriting standards.