Fannie Mae and Freddie Mac are designing a securitization framework that will work for today’s fully-guaranteed residential MBS as well as securities with a partial government guaranty or none at all, according to an update released this week by the Federal Housing Finance Agency. Among the initiatives set for the government-sponsored enterprises by the FHFA is the development of a contractual and disclosure framework (CDF) designed to give MBS investors more clarity and confidence about what they’re buying. Along with the common securitization platform, the CDF project is a major component of the MBS architecture of the future that the GSEs are building. A lot of the CDF work involves...

The fallout from last week’s trigger of the “nuclear option” by Senate Democrats, which is expected to lead to the confirmation of President Obama’s choice to be the new director of the Federal Housing Finance Agency, has analysts worried about the possibility of expanded Home Affordable Refinance Program eligibility. The Senate voted to confirm most executive and judicial nominees by a simple majority vote, and it dramatically improves the prospects of Rep. Mel Watt, D-NC, to replace FHFA Acting Director Edward DeMarco. A career civil servant who has been the chief regulator of the government-sponsored enterprises for the past four years, DeMarco has resisted proposals to expand HARP and broaden the GSE loan-modification options to include principal write-downs. Expanding HARP has been...[Includes one data chart]

Mortgages originated by brokers and correspondents, once a concern for MBS investors, have actually performed better in recent years than retail-originated loans, according to Moody’s Investors Service. The rating service said risks from third-party originations will remain low if lenders continue to put an emphasis on retail-originated mortgages. Default rates on securitized mortgages have decreased significantly in recent years regardless of origination channel. However, Moody’s noted that beginning in 2010, production from third-party originators started performing better than retail mortgages. From 2003 through 2009, third-party originations defaulted...

Although the Federal Housing Finance Agency has said it wants more “parity” in the MBS guaranty fees paid by large and small lenders, observers say the playing field remains uneven. One trade group official, who spoke on the condition his name not be used, said as far as he can see there are still “meaningful differences” in what smaller lenders pay in g-fees compared to their larger competitors. He added...

For the first time in five years, private mortgage insurers surpassed all government-insurance programs in the third quarter of 2013 as the largest provider of primary MI coverage in the mortgage market, according to the latest analysis from Inside FHA Lending affiliate Inside Mortgage Finance. The private MI industry showed that it has rebounded from the post-financial crisis by reporting $59.03 billion in new insurance written during the third quarter, down 3.2 percent from the previous quarter but clearly better than the FHA and VA production numbers for the same period. Data showed the two government agencies posting ...

Fannie Mae and Freddie Mac are designing a securitization framework that will work for today’s fully-guaranteed residential MBS as well as securities with a partial government guaranty or none at all, according to an update released this week by the Federal Housing Finance Agency. Among the initiatives set for the government-sponsored enterprises by the FHFA is the development of a contractual and disclosure framework designed to give MBS investors more clarity and confidence about what they’re…

During the first nine months of 2013, there were 512 different companies that sold mortgages to the government-sponsored enterprises that had been originated by loan correspondents of mortgage brokers. Some 324 of these lenders were involved in the broker-wholesale channel.

Elsewhere, in the report FHFA claims significant progress has been made on the development and initial testing of the GSEs’ common securitization platform.

Meanwhile, a new report from Compass Point Research is predicting that the FHFA will establish a final risk-to-capital threshold for MIs of 18:1.

“Watt will not lower the ceiling for 2014,” said one mortgage insurance executive. “Maybe, he will change them at some point but, not next year.”