MBS Investors

Browse articles from all of our Newsletters related to MBS Investors.

June 15, 2018 - Inside FHA/VA Lending

HECM Originations Rise in 1Q18, Draw Cut Slows HMBS Issuance

Reverse mortgage lenders started out strong in the first three month of 2018 with a 19.2 percent increase in Home Equity Conversion Mortgage production from the previous period. HECM endorsements totaled $5.4 billion in the first quarter, with purchase reverse loans accounting for the bulk of originations, 81.9 percent. First quarter production was up 18.5 percent from the same period last year. Meanwhile, HECM mortgage-backed securities issuance totaled $2.97 billion for the quarter, down from $3.25 billion in the prior quarter, Ginnie Mae data showed. The top five HECM originators in sequential order – American Advisors Group, Reverse Mortgage Funding, One Reverse Mortgage, Liberty Home Equity Solutions, and Synergy One Lending – accounted for $1.66 billion, or 30.8 percent, of total production during the first quarter. American Advisors maintained its top ranking with $841.4 million of HECM loans, which ... [Charts]

June 15, 2018 - Inside FHA/VA Lending

Ginnie Announces New Metric for Monitoring Issuer Performance

Ginnie Mae has added a new metric to make it easier for approved issuers to track the prepayment rates of single-family loans underlying they have delivered into mortgage-backed securities. The new prepayment metric would enhance Ginnie’s Issuer Operational Performance Profile (IOPP) tool, which was launched in 2015 to help issuers measure their performance against the agency’s standards. The new tool is the latest move by Ginnie to ensure the integrity and market predictability of Ginnie MBS. The prepayment tool will be available to lenders beginning June 25. The announcement follows an agency administrative action last week against three VA lenders that were penalized for cherry picking and refinancing unseasoned VA loans not to benefit borrowers but to charge them higher fees. The lenders – Freedom Mortgage, SunWest Mortgage Co. and NewDay USA – were among nine issuers that ...

June 15, 2018 - Inside Nonconforming Markets

News Briefs

TIAA and Angel Oak Companies look likely to price separate new MBS before the end of the second quarter, according to documents filed with the Securities and Exchange Commission. JPMorgan Chase is also preparing an MBS that could differ from its typical issuance. Merrill Lynch agreed to a settlement with the Securities and Exchange Commission this week regarding non-agency mortgage-backed security trading from 2009 through 2012 ... [Includes two briefs]

June 15, 2018 - Inside MBS & ABS

MBS Trading Increased Once Again but the Fed Hikes Rates. Refi Relief May Not Come Until 2020

The average daily trading volume in agency MBS climbed to $226.1 billion in May, the second consecutive monthly increase, according to figures compiled by the Securities Industry and Financial Markets Association.

June 15, 2018 - Inside MBS & ABS

Financiers Take Interest in Non-QM Sector as Cantor Fitzgerald, Waterfall and Others Make the Rounds

With loan production of non-qualified mortgages continuing to gather a head of steam, Wall Street financiers, conduits and warehouse lenders increasingly are taking a keen interest in the sector.

June 15, 2018 - Inside MBS & ABS

MBS Outstanding on Steady Growth Track As Mutual Funds Step Up in Early 2018

Ginnie Mae continued to lead the growth in agency single-family MBS outstanding during the first quarter of 2018, according to a new Inside MBS & ABS analysis. [Includes three data charts.]

June 8, 2018 - Inside MBS & ABS

Mortgage REIT Share Prices Give Ground, but the Sector Will Benefit From Decreased Fed Competition

Some of the nation’s largest MBS-investing real estate investment trusts are seeing their share values wither a bit as the summer approaches, but for the most part their fortunes look fairly intact.

June 1, 2018 - Inside FHA/VA Lending

California, Florida, Texas Lead in Deliveries to Securitization Pools

California continued to lead all states in FHA and VA mortgage securitization in the first three months of 2018. The Golden State accounted for 15.3 percent of the $50.6 billion of FHA loans delivered into Ginnie Mae mortgage-backed securities in the first quarter. FHA loans comprised 18.2 percent of loans securitized by Fannie Mae, Freddie Mac and Ginnie Mae, and 34.6 percent of agency-securitized loans with primary mortgage insurance. About 66.6 percent of FHA loans securitized during the period were for purchase mortgages while refinance loans accounted for 27.5 percent. The average loan-to-value ratio of FHA loans in Ginnie pools was 93.0 percent. The average credit score of 668.2 reflected FHA’s traditional base of lower-income and first-time homebuyers, with an average debt-to-income ratio of 42.4 percent. The other states among the top five in terms of FHA deliveries into Ginnie pools were ... [Chart]

June 1, 2018 - Inside FHA/VA Lending

Regulatory Relief Law Unexpectedly Disrupts Ginnie Mae MBS Market

Ginnie Mae this week warned that VA refinance loans, particularly Interest Rate Reduction Refinance Loans, may not be included in any new pool or loan package if they do not comply with the newly enacted law protecting VA borrowers from predatory lending. The agency announced new pooling guidance pursuant to the loan-seasoning provision in the Economic Growth, Regulatory Relief, and Consumer Protection Act, which President Trump signed into law last week (See details of the new law below ). The changes affect issuances of Ginnie mortgage-backed securities on or after June 1, 2018, but do not affect MBS issued before that date, according to the guidance. However, lenders seeking a guarantee after June 1 may have to recalibrate their loan-origination platforms to exclude refis that do not meet the new law’s seasoning requirements, said the Structured Finance Industry Group. The ...

May 18, 2018 - Inside FHA/VA Lending

Bright Nominated to Head GNMA, Montgomery Nomination on Hold

President Trump this week announced Michael Bright as his choice to lead Ginnie Mae, an agency under the Department of Housing and Urban Development, even as Senate Democrats continued to delay vote on his nominee for FHA commissioner. Bright is currently Ginnie Mae’s executive vice president and chief operating officer, though he has been serving as acting president since Theodore Tozer stepped down on Jan. 20, 2017. Tozer served as Ginnie president under the Obama administration for nearly seven years. Bright joined Ginnie on July 11, 2017. Previously, he served as director for financial markets at the Milken Institute and as senior vice president of BlackRock/PennyMac. During his time with Milken, Bright co-authored a paper with Ed DeMarco, former acting director of the Federal Housing Finance Agency and currently president of the Financial Services Roundtable, which proposed to ...

May 18, 2018 - Inside Nonconforming Markets

Redwood Flourishing with Expanded-Credit Loans

Redwood Trust boosted its net income in the first quarter of 2018 and continued to increase its originations of expanded-credit mortgages. The real estate investment trust is seeing strong demand for the loans in the secondary market and Redwood is set to issue its largest expanded-credit mortgage-backed security to date. Redwood had $46.9 million in net income in the quarter, up 51.4 percent from the fourth quarter of 2017 and up 26.7 percent from a year ago. The company sold ...

May 18, 2018 - Inside MBS & ABS

MBS Trading Volume Improves Slightly as Bond Prices Fall. Is a Recession on the Way?

The average daily trading volume in agency MBS inched up to $220.7 billion in April, a stable but weak reading compared to the earliest months of the year, according to figures compiled by the Securities Industry and Financial Markets Association.

May 18, 2018 - Inside MBS & ABS

Strong Demand from Investors for Prime Non-Agency MBS Boosts Issuance Volume

The volume of prime non-agency MBS issuance is on the rise as investor demand for the product increases. Pricing in the non-agency MBS market for jumbos is rivaling execution levels for holding the loans in portfolio, and some issuers are seeing better returns by placing loans in non-agency MBS instead of delivering them to the government-sponsored enterprises.

May 18, 2018 - Inside MBS & ABS

Large Institutions Led the Way as Banking Industry Pulled Back from Residential MBS Market in 1Q18

After an extended period of steady growth in its investment in the residential MBS market, the banking industry changed course in early 2018 and reduced its participation in the market, according to a new Inside MBS & ABS ranking and analysis. [Includes two data charts.]

May 11, 2018 - Inside MBS & ABS

GSEs Continue Trimming Retained Mortgage Portfolio in 2018 But Still Hold Substantial Volume of Whole Loans

Fannie Mae and Freddie Mac continued to whittle away at their retained mortgage portfolios during the first quarter, though the pair still had $469.3 billion of MBS and whole loans on their books at the end of March. [Includes one data chart.]

May 11, 2018 - Inside MBS & ABS

REITs Pulled Back Slightly from MBS Market in Early 2018 As GSEs Move to Boost Their CRT Participation

Most real estate investment trusts that specialize in the agency MBS market allowed their portfolios to decline slightly in the first quarter of 2018, according to a new Inside MBS & ABS analysis. [Includes one data chart.]

May 4, 2018 - Inside FHA/VA Lending

Ginnie Reinstates Nations Lending Following Talks on Loan Churning

An approved issuer suspended last month due to alleged VA loan churning activities is back in Ginnie Mae’s multi-issuer mortgage-backed securities program. Nations Lending, ranked 97th in Inside FHA/VA Lending’s top 100 VA lenders, was reinstated after reaching a confidential agreement with Ginnie Mae, according to a source familiar with the case. The Ohio-based lender has been “fully reinstated and [again] able to use all of Ginnie Mae’s programs that are available for lenders in good faith,” said the source, who asked not to be identified. The source declined to provide details of the agreement, maintaining Nations has been very transparent and was “ahead of the curve” in terms of dealing with the churning problem. “Nations began addressing the issue even before Ginnie took action,” he said. Ginnie neither confirmed nor commented on the report. “The evidence will show what is happening in the ...

May 4, 2018 - Inside FHA/VA Lending

Risk Factors Creep Higher in FHA And VA Loans in Early 2018

With overall production levels falling, there was a modest increase in several risk vectors of FHA and VA loans pooled in Ginnie Mae mortgage-backed securities during the first quarter of 2018.A new Inside FHA/VA Lending analysis shows the average credit score for FHA loans in Ginnie MBS issued during the first quarter was 671.1, the lowest level since Ginnie began reporting loan-level data on its securities. That was down from 673.2 in the fourth quarter and 679.2 a year ago. Part of the slide in FHA credit scores likely reflects the increased share of purchase mortgages, which typically have lower scores than refinance loans. The same thing happened in the VA market, where average credit scores fell 1.1 points to 707.8 in the first quarter. A year ago, the average VA score was 710.2. Debt-to-income ratios also drifted higher, suggesting more risk of default. Among FHA loans, the average DTI rose to ... [Charts]

May 4, 2018 - Inside Nonconforming Markets

Redwood Buys Stake in SFR Lender

Redwood Trust entered the single-family rental market this week by purchasing a stake in 5 Arches, a lender and asset manager. The move is part of a diversification strategy for Redwood, with officials at the real estate investment trust expecting growth among renters. Redwood acquired a 20.0 percent interest in 5 Arches with a one-year option to purchase the remaining 80 percent of the company. Redwood paid $10.0 million in cash for the minority stake and can buy the rest of the ...

May 4, 2018 - Inside Nonconforming Markets

Cash-Out Refi Share of Prime MBS Increasing

The share of cash-out mortgages in prime non-agency MBS has increased in recent years, prompting concerns from Moody’s Investors Service. The rating service noted that the cash-out refi share increased from around 1.0 percent in early 2012 to around 8.0 percent in the second half of 2017. The cash-out refi share has been even higher in some recent issuance. Such loans accounted for 14.9 percent of the $736.5 million deal JPMorgan Chase issued this week ...

May 4, 2018 - Inside Nonconforming Markets

MBS Investors Gaining Comfort with Non-QMs

Spreads on mortgage-backed securities with non-qualified mortgages have tightened in recent years, according to S&P Global Ratings. “Since non-QM deals first appeared in 2014, their AAA spreads have tightened, suggesting that the market may be growing more comfortable with this asset class,” the rating service said. The spread measures the price of MBS tranches compared with a benchmark international swap rate. Tighter spreads indicate greater demand from investors ...

May 4, 2018 - Inside MBS & ABS

Two Mortgage REIT M&A Deals in Two Weeks Could Signal Further Consolidation in the Industry

It appears the mortgage real estate investment trust sector – a somewhat stable universe the past few years – might be ready for a major rollup, courtesy of margin compression and tighter margins.


On average, how much of a commission does your shop pay loan officers per loan they originate ?

25 to 50 basis points.


51 to 100 basis points.


101 to 150 basis points.


North of 151 basis points. (We expect a lot.)


We pay salary, not commission.