Despite quickening refinance activity, the FHA single-family market soared over the $1 trillion mark in loans pooled in Ginnie Mae mortgage-backed securities during the second quarter of 2016, according to a new Inside FHA/VA Lending analysis. A record $1.001 trillion of FHA single-family loans made up the lion’s share of collateral backing Ginnie MBS as of the end of June. That was a 1.3 percent increase from the previous quarter and a 5.5 percent gain from the midway point in 2015. Steady growth in FHA loans helped push Ginnie single-family MBS to $1.576 trillion outstanding, topping Freddie Mac for second place in the agency market. The VA loan guaranty program was still the fastest-growing corner of the government-insured market, with total VA loans in Ginnie pools up 3.8 percent from March and 16.7 percent higher than a year ago. The actual amount of FHA and VA loans outstanding is somewhat ... [ 4 charts ]

Ginnie Mae issuers produced a hefty $125.42 billion of new single-family mortgage-backed securities during the second quarter of 2016, according to a new Inside FHA/VA Lending analysis of MBS data. The government-insured market continued to run hotter than the Fannie Mae and Freddie Mac sector. Ginnie MBS issuance – including FHA’s home-equity conversion mortgage program – was up 31.1 percent from the first quarter, while single-family MBS issuance by the two government-sponsored enterprises rose 26.2 percent over the same period. Excluding HECM, Ginnie issuance was up 31.5 percent in the second quarter. While FHA forward mortgages continued to be the biggest source of collateral, the VA program actually produced a bigger gain, 42.4 percent, from the first to the second quarter. VA production saw a major boost in refinance activity, up 58.4 ... [Includes four charts ]

Ginnie Mae has good reason to be concerned about rapid demographic change in its relatively small issuer community. Nonbank institutions – many of them relatively newly formed and based on nontraditional business models – are taking over the market. Nonbank issuers accounted for a whopping 69.4 percent of Ginnie’s issuance of single-family mortgage-backed securities during the first quarter of 2016. A year ago, their share was 64.6 percent. Two years ago it was 46.7 percent. With those kinds of gains on the production line, it’s not hard to see why nonbanks are claiming a growing share of Ginnie servicing outstanding. At the end of March, nonbanks owned 46.7 percent of Ginnie single-family mortgage servicing rights, up a hefty 11.5 percentage points in one year. That rate of growth can’t be accomplished just by producing new MBS because the servicing market simply doesn’t grow that fast. (Although the Ginnie market has grown significantly faster than any other segment of ... [ 2 charts ]

Ginnie Mae securitization of rural home loans got off to a wobbly start in the first quarter of 2016 as securitization volume fell 13.8 percent from the prior quarter, according to an Inside FHA/VA Lending analysis of Ginnie data. Approximately $3.9 billion in loans with a USDA guarantee were securitized during the first three months, with the top five issuers accounting for $2.1 billion of mortgage-backed securities produced by the segment during the period. USDA securitization volume dropped 9.2 percent year over year. Top USDA issuer Chase Home Finance accounted for $1.2 billion of securitized rural housing loans, while PennyMac, in distant second place, finished the quarter with $378.5 million. Wells Fargo ($294.0 million), Pacific Union Financial ($122.8 million) and Amerihome Mortgage ($102.2 million), in sequential order, comprised the rest of the top five issuers. Pacific Union climbed over ...

FHA originations rose significantly in the first quarter of 2016 from the same period last year even as VA loan production decreased slightly, according to an analysis of Ginnie Mae data. Lenders delivered $54.4 billion of FHA-insured loans to Ginnie Mae for securitization during the first three months, up 36.2 percent from the previous year. In contrast, the volume of VA loans securitized over the same period, $35.0 billion, fell 1.5 percent compared to the same period a year ago. A strong purchase-mortgage market drove FHA activity from January to March. The reduction in FHA’s annual insurance premium in January 2015 continued to have an impact on FHA’s purchase-loan market share. In 2015, FHA purchase originations accounted for $151.0 billion of the estimated $881.0 billion in total purchase originations (conventional and government single-family forward originations), according to ... [ 2 charts ]

A California-based mortgage lender and six senior executives have agreed to pay $12.7 million to the Securities and Exchange Commission to resolve allegations they schemed to defraud investors in the sale of residential mortgage-backed securities with a Ginnie Mae guarantee. The SEC complaint alleged that, from March 2011 to March 2015, Ginnie Mae issuer First Mortgage Corp. and its top executives pulled current performing loans out of Ginnie Mae MBS. The issuer falsely claimed that the loans were delinquent so that it could recycle them as newly issued MBS and sell them at a profit. FMC allegedly issued Ginnie Mae MBS prospectuses with false and misleading information by using a Ginnie Mae rule that allowed issuers to repurchase seriously delinquent loans. In addition, the SEC complaint alleged that FMC deliberately delayed depositing checks from borrowers who had been behind on ...

The rapid deconsolidation in the Ginnie Mae issuer community and shift to nonbanks helped expand access for borrowers, but it’s also given the agency new issues to consider, officials said. Back in 2010-11, three Ginnie issuers dominated the program, noted Ginnie Mae President Ted Tozer during the Mortgage Bankers Association secondary-market conference in New York this week. But those three firms now account for just 14 percent of the agency’s business, and nonbanks held a combined 70 percent of the market, he said. Many new firms became issuers in part so they could get away from the credit overlays imposed by the national aggregators, Tozer said. The result is that the average score on a Ginnie loan is now 60 points lower than on loans securitized by Fannie Mae and Freddie Mac, he added. Michael Drayne, senior vice president in Ginnie’s office of issuer & portfolio management, said the ...

Retail loan originations account for most new VA lending, but the correspondent channel plays an outsized role in the FHA market, especially in purchase-mortgage lending, according to a new analysis of Ginnie Mae mortgage-backed securities data by Inside FHA/VA Lending. Over half (51.1 percent) of VA loans securitized through Ginnie MBS in the first quarter of 2016 were retail originations, but only 39.1 percent of FHA loans came through that channel. The biggest source of FHA loans was correspondent lenders, which accounted for 45.8 percent of loans securitized during the first three months of this year. That was actually slightly below the 49.2 percent correspondent share of FHA loans back in 2014 and 46.8 percent last year. Correspondents accounted for well over half (53.9 percent) of FHA purchase mortgages during the first quarter, while playing a more ... [ 3 charts ]

The Ginnie Mae servicing market continued to grow during the first three months of 2016, with most of the impetus coming from the VA home loan guaranty program. A new Inside FHA/VA Lending analysis of mortgage-backed securities data reveals that the amount of Ginnie servicing outstanding swelled to $1.544 trillion as of the end of March, a 1.65 percent gain from the previous quarter. Because issuer-servicers regularly repurchase seriously delinquent loans out of Ginnie MBS pools, the actual volume of government-insured loans outstanding was somewhat higher. The VA program saw the most growth, increasing by 3.25 percent in just three months, while FHA servicing in Ginnie MBS rose only 0.96 percent from December 2015. Servicing of rural housing loans guaranteed by the U.S. Department of Agriculture was up 1.34 percent, while the FHA insurance program for Native Americans ... {4 charts]

Ginnie Mae issued $93.41 billion of single-family mortgage-backed securities during the first three months of 2016, an 8.6 percent drop from the previous quarter, according to a new Inside FHA/VA Lending analysis of loan-level MBS data, excluding FHA reverse-mortgage activity. Early 2016 was the slowest market in a year for Ginnie MBS production, though it still was stronger than most of the agency’s pre-2015 business. And issuance in the first quarter of 2016 was 17.0 percent ahead of the volume produced during the same period last year. The soft spot in the first quarter was FHA lending, especially purchase-mortgage activity. Issuers delivered $54.44 billion of FHA loans into Ginnie MBS during the period, a 12.1 percent drop from the fourth quarter, including a 15.0 percent decline in FHA purchase mortgages. Securitization of VA loans fell by a ... [4 charts].