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Inside Mortgage Finance

July 14, 2016

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Flow of Private MI Loans Into Fannie/Freddie Market Up Sharply in 2Q16, But FHA/VA Markets Also Surged

Fannie Mae and Freddie Mac securitized $58.61 billion of single-family home loans that carried private mortgage insurance during the second quarter of 2016, a solid 33.0 percent increase over the first three months of the year, according to a new ranking and analysis by Inside Mortgage Finance. The boost in private MI business was slightly stronger than the 26.2 percent increase in overall single-family mortgage-backed securities issuance for the two government-sponsored enterprises during the same period. Overall, the biggest increase in GSE business during the second quarter was...[Includes two data tables] Read More

Ginnie Mae Plans to Roll Out a Revised ‘Acknowledgement Agreement,’ New Language Could Bring More Liquidity

Ginnie Mae is working on an upgrade to its “acknowledgement agreement,” in an attempt to bring more liquidity to the market and improve the ability of servicers to get loans collateralized by mortgage servicing rights on the agency’s mortgage-backed securities. In an interview with Inside Mortgage Finance, Ginnie Senior Vice President of Issuer and Portfolio Management Michael Drayne said the new version could be ready by the end of August or perhaps a few weeks later. “We’re getting a lot of feedback from the industry,” said Drayne. Presently, 25 to 30 percent of the agency’s $1.7 trillion portfolio is secured... Read More

Most Bank MSR Holdings Are Small Enough to Avoid New Capital Requirements, Federal Regulators Find

Capital requirements that are set to take effect in 2018 for bank holdings of mortgage servicing rights won’t prompt changes to servicing activities or portfolios at most banks, according to a new analysis by federal regulators. The report by four federal banking regulators on the effect of capital rules on MSR assets was prompted by the omnibus spending bill that was signed into law in late 2015. The banking regulators examined a number of MSR trends and determined that the current regulatory course is sufficient. At the start of 2018, capital requirements for banks will get... Read More

Lawmakers, Industry Groups Inundate FHFA With Letters Voicing Housing Policy Concerns

A bipartisan group of senators is urging Federal Housing Finance Agency Director Mel Watt not to take any steps that could possibly lead to Fannie Mae and Freddie Mac being released from conservatorship. Their letter sent last week is one of several in the past two months that Watt has received from various groups reiterating their positions on housing finance reform. Senate Republicans Bob Corker (TN), Mike Crapo (ID) and Dean Heller (NV), along with Democrats Mark Warner (VA), Heidi Heitkamp (ND) and Jon Tester (MT), emphasized the need for comprehensive reform legislation over “any unilateral action” by the administration. “That is why Congress included a provision in the 2016 omnibus legislation which restricted the release of Treasury’s shares in the government-sponsored enterprises,” they wrote. “The passage of this provision reasserted the desire of Congress to have a say in determining the fate of Fannie and Freddie.” But the lawmakers acknowledged... Read More

Sharp Divisions as House Considers Bill that Would Repeal DFA Provisions, Provide QM Status to Portfolio Loans

The debate on what caused the financial crisis and how the federal government should respond continued this week in the House Financial Services Committee. At a hearing on the Financial CHOICE Act sponsored by Rep. Jeb Hensarling, R-TX, Republicans and banking-industry participants largely supported the bill while Democrats and a consumer advocate offered dire warnings. The Financial CHOICE Act would allow banking institutions to opt in to a regulatory system that puts an emphasis on capital. Under the bill, firms with an average leverage ratio of at least 10 percent would be functionally exempt from provisions in the Dodd-Frank Act, Basel III capital and liquidity standards and other regulations. “Freeing well-capitalized, well-managed financial firms from the chokehold of an overly intrusive, heavily politicized regulatory regime will help create... Read More

Parent of $1.5 Billion-a-Year Shop Gets Delisted From NYSE, But the Lender Says All is Well

The J.G. Wentworth Company is in the process of being delisted from the New York Stock Exchange, sparking rumors that its mortgage subsidiary – a $1.5 billion-a-year originator – might find itself on the auction block. For now, the parent company is putting a good face on the delisting and said its mortgage division, J.G. Wentworth Home Lending, had a strong first quarter. A spokeswoman for the parent did not address a possible sale of the lender in an email exchange with Inside Mortgage Finance. In the first quarter of 2016, J.G. Wentworth lost... Read More

HUD Secretary Fends Off Republican Attacks on Recent Changes to Distressed Note Sales Program

The Obama administration’s top housing official took a beating from Republicans on the House Financial Services Committee during a hearing this week over recent changes to the Department of Housing and Urban Development’s Distressed Asset Sales Program, also known as DASP. For more than two hours, HUD Secretary Julian Castro faced a relentless attack by Republicans angered by what they perceived as preferential treatment given to nonprofits and local government over private investors in the DASP bidding process. The federal program sells pools of severely delinquent FHA mortgages to investors to help distressed borrowers stay in their homes and, at the same time, minimize losses to the FHA Mutual Mortgage Insurance Fund. Most of the nonperforming loans in the DASP pools are... Read More

New FHFA Map Pinpoints Location of Borrowers Eligible for Loan Reduction, Lowers Estimate

Florida and New Jersey lead the way in having the most borrowers who are likely eligible to take advantage of the Federal Housing Finance Agency’s principal modification program, according to a new map the agency released this week. The FHFA introduced the one-time loan modification program in April focusing on a highly targeted group of underwater borrowers. It is limited to Fannie Mae and Freddie Mac loans that were seriously delinquent as of March 31, had remaining loan amounts of less than $250,000, and unpaid debt, including arrearages, exceeding 115 percent of the current market value of the home. The interactive map focuses... Read More

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