Servicers of loans in MBS and ABS responded to recent hurricanes by aiming to limit investors’ losses while also showing consideration to borrowers. Practices vary across asset types, particularly in the MBS market. A number of issuers and servicers at the ABS East conference produced by Information Management Network last week in Miami Beach said they suspend collection-related calls to delinquent borrowers in the days immediately following a hurricane. Servicers also stressed that it’s important to hear from borrowers to better understand whether loss mitigation might be necessary. Fannie Mae, Freddie Mac and federal government entities involved in the mortgage market issued...
Social Finance, a former fintech darling, has been through the ringer of late: cofounder, CEO and “brain” Michael Cagney resigned midmonth amid sexual harassment allegations and other top executives have departed as well, raising questions about the company’s direction – and future. SoFi, as it’s known, was a “disruptor” of sorts in the financial services arena, refinancing student loans made to millennials at cheaper rates and then securitizing the paper. Over the past 18 months, the privately held startup has been...
The biggest challenge for the vibrant single-family rental market may be the shortage of available homes to purchase, according to panelists speaking at an Urban Institute event highlighting institutional investment in SFRs this week. And one analyst pointed to mid-sized investors as being best positioned to profit from the market. Since the financial crisis, SFRs have emerged as a viable housing option and real estate investment firms are seizing the opportunity. Both mom-and-pop operators and institutional investors have been buying homes of all sizes and offering them as rental properties. Prior to the crisis, there were...
Fannie Mae and Freddie Mac are encouraging MBS market participants to begin planning how they will adapt to the new uniform MBS when it goes online in early 2019. The “Single Security Initiative Market Adoption Playbook” provides a detailed look at the many changes involved in the new security, which will take the place of the separate to-be-announced MBS that the two government-sponsored enterprises now issue. The project includes...
Originations of adjustable-rate mortgages increased by 40.5 percent from the first quarter of 2017 to the second, according to a new ranking and analysis by Inside Nonconforming Markets. An estimated $59.0 billion of ARMs were originated in the April-June cycle, with a number of major banks and nonbanks posting solid gains. Chase was...[Includes one data table]
Lenders in the non-agency market are loosening underwriting standards to some extent as refinance activity is expected to decline. Some 22 percent of the lenders surveyed by Fannie Mae said they loosened underwriting standards for non-agency mortgages during the third quarter. And 13 percent said they plan to loosen credit standards in the fourth quarter. Only 3 percent of the non-agency lenders surveyed by Fannie said...
A Ginnie Mae crackdown on abusive VA refinancing could be positive for housing finance reform, according to a Washington research organization. In a recent analysis, the Cowen Washington Research Group said Ginnie’s effort to rein in lenders that are engaging in churning might benefit those who are trying to revamp Fannie Mae and Freddie Mac. “We expect Ginnie Mae will succeed in curbing prepayment speed on VA mortgages,” wrote Jaret Seiberg, a financial services and housing policy analyst with the Cowen Group. “The crackdown is positive for government-sponsored enterprise reform as it should restore the spread between Ginnie and Fannie/Freddie MBS.” According to Seiberg, GSE reform advocates could potentially use the spread to pay for a housing finance bill that includes a government guarantee on the resulting MBS. Acting Ginnie Mae President Michael Bright has pledged to ...
The Congressional Budget Office has put forth a white paper with several options to minimize taxpayer risk in the FHA program. Although FHA delinquencies are at historical lows, the CBO would like less government exposure to FHA risk, fearing that the growing popularity of private sector programs will leave the government stuck with bad loans. CBO estimates that “the share of FHA-insured mortgages going to such borrowers is likely to keep shrinking as credit standards in the private market continue to ease. That change would leave FHA with a riskier pool of borrowers, creating risk-management challenges similar to the ones that contributed to the agency’s high levels of insurance claims and losses during the recession.” According to Inside Mortgage Finance’s database, FHA lending accounted for approximately $70.6 billion, or 15.4 percent, of all first-lien lending in the second quarter. CBO’s white ...
The Mortgage Bankers Association has asked the Department of Housing and Urban Development to tweak its current re-inspection policy, which may be interfering with certain home-sale transactions. In a recent letter, the MBA asked HUD to realign its re-inspection policy with those of the government-sponsored enterprises and the VA to prevent it from hindering sales that were in progress prior to hurricanes Harvey and Irma but had not closed when the storms hit. The MBA said the current policy requires that the inspection be completed after the Federal Emergency Management Agency’s “incident period.” HUD interprets this to mean the end date of the incident period. Because such periods can run anywhere from a few weeks to a couple of months and could be reopened or extended, many borrowers face needless delay from completing a home sale, even where there is no ...
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