FHA lenders funded $12.3 billion in new Home Equity Conversion Mortgage loans during the first nine months of 2015, up a hefty 22.2 percent from the same period in the prior year, according to Inside FHA/VA Lending’s analysis of agency data. Likewise, HECM endorsements increased 17.3 percent to $4.5 billion in the third quarter from $3.9 billion in the prior quarter. This was the highest HECM endorsements have been since the second quarter of 2013, when they totaled $4.1 billion. Purchase loans accounted for 85.8 percent of all HECM originations over the nine-month period. The majority of borrowers favored adjustable-rate HECMs over fixed-rate HECMs, which accounted for only 14.8 percent of HECM transactions. In addition, the initial principal amount at loan originations totaled $7.3 billion, up from $4.6 billion midway through 2015. The volume increase is attributable to program changes implemented ... [1 chart]

A total of $13.6 billion of rural home loans backed by the U.S. Department of Agriculture were securitized during the first nine months of 2015, according to an Inside FHA/VA Lending analysis of agency data.An estimated $5.1 billion of USDA home loans were delivered into Ginnie Mae pools in the third quarter, up 22.8 percent from the prior quarter. In contrast, the nine-month securitization volume fell 4.4 percent from the same period of the prior year. Nine of the top 10 USDA loan securitizers reported quarter-over-quarter increases. Top-ranked Chase Home Finance maintained its lead over other USDA loan securitizers with $4.2 billion in loans securitized during the nine-month period, down 4.8 percent from the previous year and up 32.8 percent on a quarterly basis. Chase’s nine-month USDA volume translated into a 31.0 percent market share. Second-place Wells Fargo funneled $1.7 billion in USDA loans into ... [ chart ]

The seven-year-old era of zero interest rates finally came to an end this week when the Federal Reserve began what may be the first in a series of small rate hikes, opting for a modest 25 basis point rise in the federal funds rate. However, the U.S. central bank also implied it expects four more quarter-point interest rate increases next year. The median projection among Fed Open Market Committee participants for the federal funds rate rises gradually to nearly 1.50 percent in late 2016 and 2.50 percent in late 2017, Fed chair Janet Yellen said in discussing the central bank’s latest moves. Further, as the factors restraining economic growth continue to fade over time, in their view, the projected median rate rises...

An estimated $117.1 billion in VA-guaranteed home loans went into Ginnie Mae mortgage-backed security pools during the first nine months of 2015, according to an Inside FHA/VA Lending analysis of agency data. The totals for securitized VA purchase and refinance loans in Ginnie pools were almost even - $57.8 billion and $57.6 billion, respectively. Modified VA loans were also included in the total. The volume of VA-backed Ginnie securitization during the first nine months of 2015 far exceeded the $109.5 billion reported for all of 2014. Lenders attributed the production spike to a growing population of active-duty military personnel and veterans returning from foreign deployment and to better outreach efforts. VA originations accounted for 12.1 percent of loans underlying Fannie Mae, Freddie Mac and Ginnie Mae MBS and 25.2 percent of insured loans in those pools. The securitized VA loans showed an ... [ 1 chart ]

Approximately $191.8 billion in FHA-insured mortgage loans were securitized during the first nine months of 2015, surpassing the $158.1 billion of FHA loans that were placed in Ginnie Mae pools last year, agency loan-level data show. Securitized FHA purchase loans accounted for $111.7 billion of Ginnie Mae mortgage-backed securities issued over the same period. FHA refinance securitization totaled $66.8 billion. Modified FHA loans were also included in Ginnie MBS totals. The FHA loans in Ginnie MBS had an average loan-to-value ratio of 92.9 percent and an average FICO score of 677.5 percent, reflecting the single-family program’s traditional borrower base. The loans had an average debt-to-income ratio of 39.8 percent. FHA loans accounted for 19.8 percent of loans that underlie Fannie Mae, Freddie Mac and Ginnie Mae MBS. On the other hand, the same loans accounted for 41.2 percent of insured loans in ... [ 1 chart ]

Fannie Mae and Freddie Mac sold $12.58 billion of credit risk through their popular back-end risk-transfer deals during 2015, according to a new Inside MBS & ABS tally of new issuance in the Connecticut Avenue Securities and Structured Agency Credit Risk platforms. While that was up 16.8 percent from the total for 2014, observers continue to call for more diversification in the government-sponsored enterprises’ risk-transfer activities, and greater transparency. The Federal Housing Finance Agency “should require...[Includes one data table]

First-time homebuyers are reportedly sitting on the sidelines and have dropped to their lowest levels in three decades, according to the National Association of Realtors. In its latest annual survey of buyers and sellers, NAR noted that the share of first-time buyers declined to 32 percent, from 33 percent a year ago and the lowest since first-time buyers spiraled down to 30 percent in 1987. But not so fast, says Edward Pinto, former chief credit officer of Fannie Mae and co-director and chief risk officer of the International Center on Housing Risk at the American Enterprise Institute, who disputes NAR’s data and describes the first-time buyer market as “booming.” “The buyers are...

Borrowers are increasingly changing the terms for loans backing recently issued commercial MBS shortly after the deal closes, said Fitch Ratings. The rating service said it has received about 15 requests this year for rating confirmations pertaining to loans from 2014 or 2015 vintage deals. While the majority of requests have been loan assumptions by new borrowing entities or ownership structures, a handful have contemplated more fundamental changes to other loan terms. But Fitch said the problem arises when some of the proposed changes would have required that the loan be modeled differently or more conservatively, had it known about the changes prior to issuance. The rating agency is especially concerned about borrowers trying to add more debt. “Additional debt, ...

Menendez Introduces HAWK Amendment in T-HUD Appropriations Bill. The National Association of Realtors recently sent a thank-you note to Sen. Robert Menendez, D-NJ, for introducing an amendment to H.R. 2577, the Transportation, Housing and Urban Development, and Related Agencies Appropriations Act of 2016, to restore HUD’s authority to offer the Homeowners Armed with Knowledge (HAWK) program. Lawmakers who were concerned about the financial condition of the FHA Mutual Mortgage Insurance Fund denied funding for the HAWK program last year in a continuing spending bill, effectively stalling the program for a year. The HAWK program is a key component of the FHA’s Blueprint for Access, which was designed to open up the credit box for underserved borrowers. Specifically, program participants will benefit from reductions in FHA premiums once they complete ...

The Federal Home Loan Bank System is seeking to boost its share of government-backed lending and the Ginnie Mae market with a new servicing-release option for FHA, VA and rural housing mortgages that are sold into the Mortgage Partnership Finance program. The new feature adds to an existing servicing-retained execution in the MPF Government Mortgage-Backed Securities program. The current servicing-retained component requires participating lenders to service loans they originate and sell into the MPF conduit. The servicing-release option from Nationstar Mortgage, a top-10 mortgage servicer based in Dallas, will provide lenders with greater pricing flexibility so they can become more competitive in the communities they serve, said Matt Feldman, president of the Chicago FHLB. Only FHLBank members that are participants in MPF can use the government MBS program. In order to ...