Ginnie Mae

The Fed may be the big factor in the massive fluctuations seen daily in the TBA markets, but traders and credit analysts now also fear a new problem in the heretofore peaceful world of Ginnie Mae, writes the chairman of Whalen Global Advisors.

While broader counterparty rules were recently reworked in consultation with the industry, questions persist regarding one subset from the government bond insurer.

"To talk about 95% of issuers by count being compliant without recognizing that a very large number of issuers hold few MSRs is disingenuous," one industry executive told the chairman of Whalen Global Advisors.

The servicer is evaluating alternatives in light of the new rule the government bond insurer will put in place next year.

Financial downturns hit lower-wealth communities first and cause them to suffer the longest.

Ginnie Mae has constructed a perfectly counter-cyclical capital regime that would crush the government loan market if left unaltered, the chair of Whalen Global Advisors writes.

Updated counterparty requirements recently coordinated with the Federal Housing Finance Agency affect a constituency that has kept growing, albeit at a slightly slower pace, according to new mortgage-backed securities research.

A significant divergence between the FHFA and the Ginnie Mae issuer rules could greatly disrupt the secondary market — and that is precisely the outcome that now faces the mortgage industry, writes the chairman of Whalen Global Advisors.

The way the Federal Housing Administration is funded and constrained by laws, rules and other operational limitations is analogous to the FHA living in the horse-and-buggy era in an age when we are starting to see driverless cars, writes the executive director of the Community Home Lenders Association.

One of the secondary market alternatives the Federal Home Loan Banks of Chicago and Indianapolis offer has a new servicing partnership with PHH, and interest in further cultivating their community lending potential is growing.

Although forbearance exits are not yet complete, two arms of the Department of Housing and Urban Development have decided to make some temporary pandemic relief programs permanent.

HUD official Alanna McCargo takes over the top job at the government corporation, which has had a series of acting leaders since 2017.

While overall volume was down in August, it remained historically strong, particularly in the securitized market for home equity withdrawal loans made to borrowers age 62 and up.

The biggest issues facing the mortgage industry involve public policy and all of them feature a political narrative that is ill-informed and largely at odds with market realities, Whalen writes.

Financial institutions will have until early October to weigh in about new risk-based capital requirements for nonbanks.

The guarantor of mortgage-backed securities has been without a Senate-confirmed president for four and a half years. The vacancy makes it difficult for other government agencies to coordinate housing objectives, according to stakeholders.

In assuming that credit unions have the same risk profile as nonbank lenders, the mortgage insurer is now threatening to exclude nearly a quarter of them from being qualified issuers of the securities it backs, writes the Senior Director Of Advocacy and Counsel at the Credit Union National Association.

The proposal should be withdrawn or reworked around the needs of small players they impose a disproportionate burden on, the Community Home Lenders Association said.

The guarantor has for the first time proposed a risk-based capital requirement for companies not subject to other federal regulation. The industry says the plan, which would impose a heavy charge for servicing portfolios, could drive lenders away from government-backed programs.

The Mortgage Bankers Association is advocating for more funding for the agency due to its elevated securitization activity, and counterparty risk linked to a lingering concentration of loans in forbearance.