Fannie Mae remains on track to securitize $30 billion in multifamily loans this year, compared with nearly $34 billion in 2012, which would meet the FHFA scorecard target.
Non-agency MBS investors are still unhappy with how negotiations for the $25 billion national servicing settlement were handled and are concerned that the federal government will pull a similar move in settlement negotiations with JPMorgan Chase. John Gidman, president of the Association of Institutional Investors, said non-agency MBS investors werent involved in negotiations for the national servicing settlement and havent been involved in ongoing discussions regarding Chase. He said using funds from non-agency MBS to remedy allegations of inappropriate, unlawful or illegal behavior on behalf of an issuer or servicer makes it harder for investors to price risk. This consequently makes...
Fannie Mae plans to issue a $675 million risk-sharing securitization in a transaction that likely will hit the market by mid-October, according to potential investors who were briefed on the government-sponsored enterprises plans. Market participants said Fannie has contemplated issuing two such transactions by year-end, but the company isnt talking about specifics, at least not yet. Still, the GSE is laying...
While the Consumer Financial Protection Bureau has encouraged originations of non-qualified mortgages, industry analysts predict that such originations will begin slowly. Even before the QM and risk-retention requirements are implemented for non-qualified residential mortgages, few lenders have been willing to offer subprime mortgages. Originations of subprime mortgages will likely be non-QMs due to the higher interestrates required for subprime borrowers. According to a survey completed by Zillow, borrowers with credit scores under 620 who requested a quote for a 30-year fixed-rate mortgage were...
Potential investors have expressed strong interest in the pending risk-sharing deal from Fannie Mae and looking for tweaks in the structure recently used by Freddie Mac. Martin Hughes, CEO and director of Redwood Trust, noted that the real estate investment trust invested in Freddies Structured Agency Credit Risk transaction. He suggested two changes as the government-sponsored enterprises work to share risk with the non-agency market. Freddies STACR deal was structured...
Higher-priced mortgages accounted for a scant 1.0 percent of loan sales in 2012, according to an Inside Nonconforming Markets analysis of data from the Home Mortgage Disclosure Act. Originations of higher-priced mortgages increased slightly compared with 2011 but the growth didnt keep up with the increase in overall originations. Higher-priced first liens have an annual percentage rate at least 1.5 percentage points above the average prime offer rate. Federal regulators use the metric as a proxy for subprime mortgages. Some $15.80 billion in higher-priced mortgages were sold...[Includes one data chart]
A year and a half after the $25 billion national servicing settlement took effect, attorneys general and the settlements monitor turned up the heat this week on the five banks participating in the settlement. Wells Fargo faces a new lawsuit, Bank of America settled similar claims, and all five servicers face additional testing standards and procedures, with BofA and Wells agreeing to even more stringent process improvements. New York Attorney General Eric Schneiderman, D, announced a lawsuit against Wells. He said consumer advocates have documented hundreds of violations to the settlement by Wells, including delays, lost paperwork and wrongful denials. BofA avoided...
Citadel Loan Servicing, which specializes in non-agency loans, has increased its maximum loan-to-value ratio to 80 percent from 75 percent. The change, which came about a week ago, is for fully documented loans.The privately held nonbank made the switch in response to borrower demand. The phones are ringing like a son-of-a-gun, said Citadel CEO Dan Perl. The Irvine, CA-based firm originates...
Esoteric accounting rules, statutory loss reserves requirements and declining loan production have compelled the FHA to take a mandatory draw of approximately $1.7 billion from the Treasury even though it has plenty of cash to cover potential losses. While the agency had significant liquid assets for its forward loan portfolio, it would be required to boost reserves for its Home Equity Conversion Mortgage program to cover all expected future losses for the next 30 years, FHA Commissioner Carol Galante explained in a letter to Senate Banking Committee leaders. The announced draw became ...