Secondary markets

Two Wall Street firms and a single-family rental investor have purchased portions of the government-sponsored enterprise's latest nonperforming loan package.

The higher dollar amounts could be a way for companies to drive volume at a time when rates are increasing.

The $146 million deal could indicate that volume in the asset class has gotten large enough to support programmatic activity in the pricey housing market.

“I myself believe that the ‘substantial further progress’ standard has more than been met with regard to our price-stability mandate and has all but been met with regard to our employment mandate,” Fed Vice Chair Richard Clarida said Tuesday.

Kind Lending founder Gary Stearns told the National Association of Mortgage Brokers that the wholesale channel always feels the pain first in a slowdown and that changes were coming to the industry after a remarkable run, writes the chairman of Whalen Global Advisors.

Common Securitization Solutions has disbanded a group of independent board members originally brought on in early 2020 to look into using the government-sponsored enterprises’ platform to serve a broader market.

The purchase of home, mortgage and title assets for roughly $471 million in cash allows the buyer to expand into Houston, Dallas and San Antonio and increase its presence in Austin.

Both third-party lenders will purchase conforming loans with balances of $625,000 — 14% higher than the current limit — in anticipation of regulators' action.

While PLS loans still represent a sliver of the overall mortgage market and are nowhere near the $1 trillion level seen before the Great Recession, issuance jumped markedly this year.

More than 19% of the related loans are early buyouts from securitized pools, and the deal is one example of growing bulk sales activity in the market.

The Federal Housing Finance Agency agreed to rework and improve procedures for regulatory communication about issues like servicing lapses in response to a recent inspector general audit.

Sara Avery previously worked for Common Securitization Solutions, which manages the issuance of the two government-sponsored enterprises’ bonds, including their uniform mortgage-backed security.

But the amount of forborne loans packaged into Ginnie Mae securities was up by 3 basis points on a consecutive-week basis, suggesting a concentration of distress there, amid broader declines.

Despite the increase, adjustments to single-family loan terms aimed at making payments more affordable remain historically low at the government-sponsored enterprises. But they could grow in line with forbearance expirations soon.

The move marks one of the first actions the two government-sponsored enterprises and the Federal Housing Finance Agency have taken to make a pandemic-related loss mitigation option open-ended.

The difference between purchase contract prices and valuations was consistently wider than in white neighborhoods, according to a recent analysis of 12 million appraisals from the Uniform Collateral Data Portal.

The company will return to selling pieces of its credit exposure to private investors during the last three months of the year, but is still evaluating its strategy for 2022.

Changes proposed this week stand to reverse the effect of the Trump-era rule, which disincentivized Fannie Mae and Freddie Mac from making such deals, according to critics.

The Department of Housing and Urban Development increased the share of reverse mortgage assets it will give community organizations a first crack at, in line with goals of the Biden administration.

Required use of the Federal Housing Administration’s Catalyst platform may accelerate data collection on valuations from a government agency that’s insuring nearly one-fifth of all purchase loans.