MBS & ABS Performance

Browse articles from all of our Newsletters related to MBS & ABS Performance.

April 20, 2018 - Inside FHA/VA Lending

Ginnie Mae Mulls ‘A-Tier’ Issuer Rating to Raise Nonbank Liquidity

Ginnie Mae is considering a tiered rating system to ensure that all participants in its mortgage securities program have sufficient liquidity and capital to meet their counterparty obligations. The agency is still fleshing out the idea of an “A-tier” issuer, which would likely develop into a policy in the near future, said Michael Bright, executive vice president and chief operating officer, during a recent interview with Inside FHA/VA Lending. “An A-tier issuer would be [a company that] has gone above and beyond in helping put together for us a risk management and liquidity plan that does not rely on liquidity providers, and whose defect and cure rates are low,” he explained. Such issuer/servicers also would be well capitalized. Ginnie is developing the metrics for such a system, as well as incentives for the A-tier issuers, Bright said He added that top-rated firms would be eligible for “concierge services” from the ...

April 20, 2018 - Inside Nonconforming Markets

Mixed Views on Flagstar’s Due Diligence Sampling

Full third-party due diligence reviews were completed on only 20.0 percent of the loans being pooled by Flagstar Bank into a new non-agency mortgage-backed security. Rating services delivered mixed assessments of the due diligence sampling rate, which could set a standard for the market. The $704.1 million Flagstar Mortgage Trust 2018-2 is scheduled to close at the end of the month. DBRS, Fitch Ratings, Kroll Bond Rating Agency and Moody’s Investors Service all ...

April 20, 2018 - Inside MBS & ABS

Rating Agencies Weigh Emerging Issuer Strategies on Mortgage Servicing Advances

New non-agency MBS encompass a variety of different servicer strategies on how they advance payments for delinquent loans, with mixed impact on investors, according to rating services.

April 12, 2018 - Inside Mortgage Finance

GSE Investor Pershing Square May be Doubling Down Despite Getting Redemption Requests

Pershing Square Holdings, one of the largest speculators in Fannie Mae and Freddie Mac common stock, is doubling down on its investment in the two government-sponsored enterprises by taking a different tack: Instead of increasing its positions in the common, it’s been buying up the junior preferred as well.

April 6, 2018 - Inside FHA/VA Lending

Private Credit Enhancers Lining Up For Ginnie’s Risk-Sharing Pilot

Ginnie Mae’s credit-risk sharing concept is generating a lot of excitement among private credit enhancers, according to the company’s acting president. A planned risk-sharing pilot with FHA scheduled for later this year has the industry on its toes, said Michael Bright, executive vice president and chief operating officer of Ginnie Mae, during an interview this week with Inside FHA/VA Lending. “There is a line out the door of private companies willing to provide and take on credit risk and work with us on transactions where private capital would assume some of the risk,” he said. Ginnie is currently looking at ways to facilitate risk sharing between FHA and a private third party that would assume a first-loss position on a Ginnie security backed by FHA loans. Bright brought up the idea during remarks at the Structured Finance Industry Group conference in Las Vegas in February. He has been fielding calls since from ...

April 6, 2018 - Inside FHA/VA Lending

GNMA Chief Confident Agency Will Win Back Investors’ Faith, Trust

Ginnie Mae’s anti-churning efforts have narrowed the spread between Ginnie and Fannie Mae mortgage-backed securities, prompting executives to say things are almost back to normal. In an interview with Inside FHA/VA Lending this week, Michael Bright, executive vice president and chief operating officer at Ginnie Mae, said the market and investors have responded positively to the agency’s efforts to resolve the churning and prepayment problems. “The Ginnie spread has fallen almost half a point and our securities have become more liquid,” he said. “We want to make sure we’re giving investors CPRs (constant prepayment rates) that they can model.” Bright said he cares less about the overall level of prepayment speeds. What he truly cares about is ensuring that when an investor purchases a Ginnie security, the prepay speed is correlated to changes in the interest rates and not the ...

April 6, 2018 - Inside FHA/VA Lending

Issuers Punished for Churning, Barred from Multi-Issuer Pools

Ginnie Mae this week meted penalties to two of the nine issuers that received warnings from the agency for excessive refinancings of VA mortgages. Bloomberg reported that Ginnie barred NewDay Financial’s and Nations Lending’s from the more lucrative multi-issuer mortgage-backed securities pools, forcing them to issue custom pools. The restrictions became effective immediately. The agency’s action could reduce mortgage interest rates by 50 basis points for FHA and VA loans, which would benefit first-time homebuyers, said Jaret Seiberg, an analyst with Cowen Washington Research Group. On the other hand, the issuers Ginnie limited to issuing custom pools will end up making loans with higher rates, the analyst noted. Ginnie’s action is part of a joint effort with the Department of Veterans Affairs to crack down on loan churning and faster prepayments of VA loans pooled in Ginnie securities. Loan churning ...

April 6, 2018 - Inside FHA/VA Lending

Ginnie MBS Production Tumbled To Three-Year Low in Early 2018

Issuance of new single-family Ginnie Mae mortgage-backed securities fell sharply in the first quarter of 2018, according to a new Inside FHA/VA Lending ranking and analysis. The agency issued $92.58 billion in MBS backed by forward mortgages during the first three months of 2018. That was down 14.8 percent from the previous three-month period and represented the lowest quarterly total since early 2015. The 1Q figure is based on truncated loan amounts reported in Ginnie’s loan-level MBS disclosures. Reports with unrounded single-family loan amounts show a total of $95.75 billion in first-quarter MBS issuance, including FHA reverse mortgages. The loan-level data reveal that production fell 6.9 percent from February to March, when just $28.21 billion of Ginnie single-family securities were issued. That was the lowest monthly volume since February 2015. Both the FHA and VA programs saw significant ... [Charts]

April 6, 2018 - Inside MBS & ABS

Morningstar Withdraws Unsolicited Ratings on CMBS, Citing Lack of Interest from Investors

Morningstar Credit Ratings announced the withdrawal last week of unsolicited ratings the firm had placed on some non-agency commercial MBS. While regulators have encouraged the publication of unsolicited ratings, investor demand has been tepid.

April 6, 2018 - Inside MBS & ABS

MBS Trading Volume on the Rise Early in 2018, But Ginnie Prepay Concerns Linger

As rates continued to rise early this year, the average daily trading volume in agency MBS topped $239.2 billion in February, the best showing in at least 14 months, according to figures compiled by the Securities Industry and Financial Markets Association.

March 23, 2018 - Inside FHA/VA Lending

USDA Securitization Fell in 2017, Freedom Maintains Market Lead

Securitization of USDA loans by Ginnie Mae fell in the fourth quarter of 2017. Approximately $19.9 billion of USDA loans were delivered into Ginnie MBS pools in 2017, notwithstanding a 9.2 percent drop from the previous quarter, agency data show. On the other hand, year-over-year securitization of rural housing loans with a government guarantee rose 5.8 percent from 2016. Top-ranked Freedom Mortgage saw its USDA loan deliveries to Ginnie drop 16.2 percent during the fourth quarter, while its USDA securitization volume rose a whopping 78.9 percent from the previous year. Overall, Freedom accounted for $3.6 billion of USDA loans pooled in Ginnie MBS last year. Second-place PennyMac closed the year with $3.1 billion of securitized USDA loans, while Wells Fargo reported a 13.1 percent drop in the final quarter to end 2017 with $1.4 billion of rural housing loans in Ginnie MBS. Chase Home Finance sprang out ... [ Chart ]

March 23, 2018 - Inside FHA/VA Lending

Ginnie-MPF Partnership Bears Fruit as Issuance Exceeds $1 B

Ginnie Mae has passed the $1 billion mark for mortgage-backed securities issued through the Federal Home Loan Banks’ Mortgage Partnership Finance program. The MPF government MBS product was available initially to eligible participating members of the Federal Home Loan Bank of Chicago. The Chicago FHLB launched the MPF program in 1997 to give approved participating members access to the secondary mortgage market. Specifically, the program provided an outlet other than Fannie Mae and Freddie Mac for member institutions to sell fixed-rate mortgage loans (conventional, government, or jumbo). Most of the institutions participating in the MPF are small banks, thrifts and credit unions with assets of less than $400 million. The MPF government MBS product arose from a 2015 partnership between Ginnie Mae and the Chicago FHLB to issue Ginnie MBS backed by ...

March 23, 2018 - Inside MBS & ABS

Rating Services Say Senate Bill Would Reduce Uncertainty Around PACE ABS

The regulatory relief bill recently passed by the Senate would reduce uncertainty for future ABS tied to Property Assessed Clean Energy financing programs, rating services said.

March 23, 2018 - Inside MBS & ABS

Fitch Proposes Incorporating Servicer Quality in Non-Agency MBS Loss Modeling and Increasing Credit for Certain RPLs

Fitch Ratings recently proposed changes to its loss model criteria for non-agency MBS involving servicer quality and the performance of re-performing loans.

March 23, 2018 - Inside MBS & ABS

DBRS Tops in Non-Agency MBS Ratings; S&P Surged Further Ahead in ABS Market

DBRS took over as the top rating service in the non-agency MBS market last year, as more deals carried multiple ratings in 2017, according to a new Inside MBS & ABS ranking.

March 15, 2018 - Inside Mortgage Finance

Finding an Alternative to Existing Fannie/Freddie Credit Score Policies Is Not Getting any Simpler

As the Federal Housing Finance Agency continues to evaluate alternative credit scoring mechanisms, some experts argue that the agency isn’t doing enough to promote an updated scoring system while others say the current system works just fine.


What’s your opinion on how Mick Mulvaney has managed the CFPB since he took over three months ago?

He’s done a good job of paring back the agency’s excesses and we’d like to see more.


I hope he totally dismantles the agency and sends those functions back to the agencies hence they came.


Not bad, but he needs to take his time making additional changes.


We’re totally aghast. He’s gone way too far in protecting the rights of companies not consumers!