Shared-equity mortgage arrangements from for-profit investors offer help for borrowers that otherwise might not qualify for a mortgage while also introducing risks, according to analysts at the Urban Institute’s Housing Finance Policy Center. In a shared-equity transaction, a third party helps a mortgage borrower purchase a home in exchange for some of the home-price appreciation. The HFPC noted that shared-equity transactions reduce the amount of money required from ...
The Department of Justice this week finalized previously announced settlements with Deutsche Bank and Credit Suisse regarding non-agency mortgage-backed security activities in the run-up to the financial crisis. The DOJ said the $7.20 billion settlement with Deutsche Bank was the single largest residential MBS resolution for the conduct of a single entity. The settlement with Credit Suisse was for $5.28 billion. Both of the settlements included civil penalties and ... [Includes two briefs]
The Trump administration has officially set aside the 25 basis point cut in FHA annual premiums in a new mortgagee letter issued by the Department of Housing and Urban Development hours after Donald Trump was sworn in as the 45th president of the United States. Mortgagee Letter 2017-07 said that the annual-premium reduction HUD announced on Jan. 9 “has been suspended indefinitely.” Stakeholders will be notified in the event of a policy change, the letter added. The letter confirms reports earlier in the week that the FHA pricing adjustment was about to be spiked. Ben Carson, who had his confirmation hearing before the Senate Banking Committee last week, told lawmakers that he planned to work with the FHA director and financial experts to review the cut. However, the HUD secretary-designate gave no indication as to whether he favored a premium reduction that would benefit thousands of ...
DB was faulted for failing to disclose second liens on mortgages in MBS and for concealing refreshed credit scores that were worse that the credit scores disclosed to investors.
In 2016, a mere $42.93 billion of non-agency MBS were issued, down 32.5 percent from the previous year, according to a new Inside MBS & ABS ranking and analysis. It was the second-lowest annual output since 2012. The picture would look a bit brighter if Fannie Mae and Freddie Mac credit-risk transfer deals were included, as well as single-family rental securitizations, which both compete for the investors that might be interested in non-agency MBS. But the government-sponsored enterprise CRT deals are debt issues and they couldn’t be any more “agency,” while the SFR securitizations look a lot more like commercial MBS than residential MBS. The prime jumbo market hit...[Includes three data tables]
In 2016, Caliber issued three non-agency MBS deals that included prime-quality and jumbo loans, often made to borrowers described in ratings’ reports as consumers with “unblemished” credit.
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