Browse articles from all of our Newsletters related to FRB.

September 28, 2017 - Inside Mortgage Finance

Banking Regulators Propose MSR Break for Smaller Banks

Federal banking regulators this week formally proposed changes to capital rules that would give smaller institutions more leeway to hold mortgage-servicing rights. Current rules require banks to take capital deductions for any MSR holdings that exceed 10 percent of tier 1 capital. Some say this requirement has contributed to the banking industry’s retreat from the mortgage servicing business. The proposal would raise...

September 28, 2017 - Inside Mortgage Finance

Mortgage Servicing Market Hit 6-Year High in 2Q17, Thanks to Gains in Agency MBS, Portfolio Lending

The mortgage servicing market maintained its steady growth pattern during the second quarter of 2017, inching up 0.7 percent to $10.430 trillion, according to new Federal Reserve data. That was the biggest number for mortgage debt outstanding since the first quarter of 2011, when the market stood at $10.439 trillion. Most of the growth has been in Fannie Mae, Freddie Mac and Ginnie Mae servicing but portfolio holdings of whole loans are also on the upswing. There was...[Includes two data tables]

September 28, 2017 - Inside Mortgage Finance

Fannie, Fed Find Underwriting Standards Easing, MBA Sees Increase in Mortgage Credit Availability

Anecdotal and empirical evidence confirm that mortgage lenders are continuing to lighten up on their underwriting criteria. The loosening may not be as pronounced as it was in the run-up to the financial crisis, but there are concerns that it will intensify as the Federal Reserve raises interest rates. Fannie Mae’s latest mortgage lender sentiment survey found that more lenders said they have eased credit standards than tightened them, something the government-sponsored enterprise attributed to limited demand for residential finance and a negative outlook on profit margins. “The net share of lenders reporting easing of credit standards over the prior three months has continued...

September 22, 2017 - Inside MBS & ABS

MBS Trading Volume Remained Light In August; Maybe a Fed Exit Will Help

The average daily trading volume in agency MBS totaled a tepid $199.8 billion in August, the lowest reading since May, according to figures compiled by the Securities Industry and Financial Markets Association. Then again, volume wasn’t too far off trading activity in the prior two months, which came in at $200.5 billion and $200.9 billion. It appears that investors haven’t had...

September 22, 2017 - Inside MBS & ABS

Fed Announces MBS Reinvestments Will Begin to Slow in October, Next Rate Hike Seen in December

The great unwinding of the Federal Reserve’s massive intervention in the MBS market post-financial crisis is set to begin soon. This week, surprising no one, the U.S. central bank’s Federal Open Market Committee announced it will start to normalize its huge balance sheet next month along the parameters it first outlined in June. From October through December, the decline in the Fed’s securities holdings will be capped at $6 billion per month for Treasuries and $4 billion per month for agency MBS. Next year, the declines will gradually increase to $30 billion a month for Treasuries and $20 billion a month for MBS. Fed Chair Janet Yellen reiterated...

September 22, 2017 - Inside MBS & ABS

Single-Family MBS Market Plugging Along, Banks And Overseas Investors Were Top Buyers in 2Q17

The supply of outstanding residential MBS in the market continued to grow at a measured pace during the second quarter of 2017, thanks to the robust single-family MBS machines at Fannie Mae, Freddie Mac and Ginnie Mae. A total of $6.675 trillion of single-family MBS was outstanding as of the end of June, according to a new Inside MBS & ABS analysis. That was up 0.8 percent from the end of March, and it represented a record 64.0 percent of outstanding single-family mortgage debt. The Federal Reserve this week reported that home loan debt outstanding rose 0.7 percent to $10.430 trillion during the second quarter. All the MBS growth was...[Includes three data tables]

September 11, 2017 - Inside the CFPB

Other News in Brief/Industry News in Brief

State Regulators Start Work on a Next-Generation Technology Platform. The Conference of State Bank Supervisors has initiated what it characterizes as a major redesign of the Nationwide Multistate Licensing System (NMLS), which is the core technology platform state bank regulators utilize. According to the CSBS, the redesign will enable the regulators to transform the licensing and supervision of non-bank financial institutions, including financial technology companies, or so-called fintechs. “Technology and data are powerful tools that can create sweeping benefits throughout the financial regulatory system,” said Louisiana Office of Financial Institutions Commissioner John Ducrest. “And that vision drives our efforts with the next-generation NMLS. We are committed to nothing less than modernized state regulation for a modernized financial services industry.” The ...

September 8, 2017 - Inside MBS & ABS

Once Banks Got LCR Compliant, They Opted For More GSE MBS, Fed Researchers Find

Partly to comply with liquidity cover ratio requirements imposed in the wake of the financial crisis, U.S. banks ramped up their holdings of high-quality liquid assets. But once they got compliant, many of them shifted their asset allocations more to agency MBS and U.S. Treasuries, according to researchers at the Federal Reserve. This could have implications for the U.S. central bank’s massive balance sheet over the long haul, they added. As of Jan. 1, 2015, large banks in the U.S. have needed...

September 7, 2017 - Inside Mortgage Finance

Some Banks Expected to Benefit From Proposed Delay In Tougher Capital Rule for Mortgage Servicing Assets

A proposal by federal regulators to delay tougher capital requirements for mortgage servicing assets will have a “marginally positive impact” on banks subject to the proposal, according to banking regulators. Near the end of August, the Office of the Comptroller of the Currency, the Federal Reserve and the Federal Deposit Insurance Corp. issued a proposed rule that would extend the current treatment on mortgage servicing rights and related assets, delaying tougher standards established by Basel III. The proposal would apply to banks that aren’t subject to the “advanced approaches” capital rules – generally banks with less than $250 billion in total assets. “For small banking organizations that have significant amounts of MSAs ... the proposal could...


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