Mortgage – HousingWire |
- Freedom Mortgage dominates the MSR market
- Supreme Court orders review of recession-era class action against Rocket
- Mortgage rates see sizable increase
- Guaranteed Rate closes Stearns wholesale channel
- FHFA’s loan-fee bump buoys PLS market
- Purchase loans drive mortgage applications higher
- Redfin acquires Bay Equity, pink slips 121 staff
- Fannie plans $15B in CRT deals in 2022
- Mortgage delinquency rate reaches prepandemic levels
| Freedom Mortgage dominates the MSR market Posted: 13 Jan 2022 12:56 PM PST  Another large mortgage-servicing rights bulk offering is on the market this week on the heels of a $10 billion MSR package that went out to bid earlier this month. The latest deal is being marketed by New York-based Mortgage Industry Advisory Corp., or MIAC. It is a $6.23 billion bulk-sale offering of agency MSRs, with bids due by Jan. 20. The seller is not identified. "MIAC, as exclusive representative for the seller, is pleased to offer for your review and consideration a $6.23 billion Fannie Mae, Freddie Mac, and Ginnie Mae mortgage servicing portfolio," bid documents for the new MSR offering state. "The portfolio is being offered by a mortgage company that originates loans with a California concentration." In early January, Denver-based Incenter Mortgage Advisors also launched 2022 by unveiling a $10 billion bulk-sales package of mortgage-servicing rights tied to Fannie Mae and Freddie Mac loans. The seller is not identified in the offering, which indicates the deadline for final bids was Jan. 12. Incenter Managing Director Tom Piercy would only say that the seller is a "nonbank." These latest offerings come on the heels of an active year in 2021 on the MSR front, which new data shows was dominated by one lender that can be named: Freedom Mortgage. The new MSR package being marketed by MAIC is composed of 17,609 loans, most of which are Fannie and Freddie mortgages, with Ginnie-backed loans composing less than 8% of the package by loan volume. The average loan size, according to the MSR-offering bid documents, is $353,763, and the average FICO credit score of the borrowers is 750. The servicing-fee cut is set at 0.258%, with the average interest rate on loans in the MSR package at 3.023%. Slightly more than 56% of the loans in the servicing package were originated in California, based on principle balance. The other leading states for loan originations for the MSR bundle are Washington, 12.27%; Illinois, 5.34%; and Oregon, 4.27%. Combined, the two MSR bulk offerings kicking off the start of the year, with loans valued in total at more than $16 billion, are a sign that the MSR market is on a roll right now. "We're approaching … a peak [in the market] again," said Piercy. "We've been on the phone … advising our customers that this is happening. "We're … seeing values trending up, and I'm pretty bullish on this for the foreseeable future." Rankings released recently by New York-based mortgage data-analytics firm Recursion offer some insight into the state of the MSR market and its major players as the new year begins to unfold. Leading the pack on multiple fronts is Freedom, which bills itself as the leading Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) lender in the country. That also explains, in part, Freedom's role as a leading servicer in the Ginnie Mae market as of year-end 2021. Ginnie’s unique programGinnie serves as the government-backed securitization pipeline for loans insured by government agencies that provide loan-level mortgage-insurance coverage through their lending programs. Unlike Fannie and Freddie, however, Ginnie does not purchase loans. Rather, under the Ginnie program, lenders originate qualifying mortgages that they can then securitize through the agency. Ginnie guarantees only the principal and interest payments to purchasers of its bonds, which are sold worldwide. The underlying loans carry guarantees, or a mortgage insurance certification, from the housing agencies approving the loans — which include single-family mortgages guaranteed by the FHA, VA and U.S. Department of Agriculture. The holders of Ginnie Mae MSRs, primarily nonbanks today, are the parties responsible for assuring timely payments are made to bondholders. And when loans go unpaid due to delinquency, those servicers still must cover the payments to the bondholders. "Ginnie Mae as an organization, their function is to a make sure that there’s a market for buying these Ginnie Mae bonds, and then they have to manage the servicers to ensure that the integrity of the bonds is maintained," Piercy explained. "The servicer retains the obligation to pass through the principal and interest to the bondholder." Under Ginnie's program, then, lenders can securitize through the agency qualifying loans they purchase or originate, and then they can choose to retain or sell the servicing rights to the loans backing the Ginnie Mae securities issued. That's where Freedom Mortgage shines, based on information provided by Recursion. In terms of Ginnie Mae securitizations, including new issuance and net MSR purchases, Freedom is by far the largest Ginnie servicer. As of the final month of last year, the lender controlled 13.2% of Ginnie Mae's $1.95 trillion outstanding servicing book of business — with a $261 billion balance comprised of both new-issuance securitizations and net purchases, according to Recursion's data. The figures for the other Ginnie servicers among the top five — again, based on new issuance and net purchases — as of the same time frame are the following:
Diving down into the numbers a bit, the total volume of newly issued Ginnie Mae securities year to date through Dec. 1 last year stood at $780 billion, including $102 billion for the leading issuer, Freedom. The other leaders in that category:
Li Chang, founder and CEO of Recursion, points out that Wells Fargo "only delivered $19 billion in new issuance," to the Ginnie market year to date through Dec. 1, 2021 — far less than Quicken Loans. But "Wells has a huge legacy book" of Ginnie MSR business, she added, so it ranks above Quicken in Ginnie-servicing market share based on the lenders' outstanding loan balances. Freedom also was the top buyer of Ginnie MSRs from other servicers over the 11-month period, based on loan volume, at $71.2. billion in net purchases, followed by Lakeview Loan Servicing, $50.4 billion; Mr. Cooper (formerly Nationstar Mortgage), $21.7 billion; and Carrington Mortgage Services, $7.3 billion. Loan delinquency ratesThe loan-delinquency rate for Ginnie loans in Freedom's MSR portfolio as of Dec. 1 of last year was 9.7% — representing all loans 30 days or more past due. That's down from 14.3% in 2020, the initial year of the pandemic. Freedom declined to comment for the story. Freedom's late loans accounted for 22.1% of all outstanding loans on Ginnie's books that were 30 days or more late as of early December 2021, the Recursion data shows. In general, nonbanks reported higher delinquency rates for their Ginnie MSR portfolios than did banks. Trailing Freedom's double-digit figure on that measure are Lakeview Loan Servicing, with an 11.4% share of the Ginnie late-loan pool; PennyMac, 8.2%; Mr. Cooper/Nationstar Mortgage, 6.4%; NewRez, 4%; and Quicken Loans, 3.1%. "Banks typically have lower delinquency rate than nonbanks," Chang said, "as they have the access to capital to repurchase delinquent loans out of Ginnie Mae pools." Piercy explained that once a loan in a pool of Ginnie-securitized loans is 90 days past due, the servicer has the right to buy it out of the pool at par and modify it as needed because that lender now owns the loan. If the lender can then get the borrower to make six monthly payments in a row, it "can reissue that loan into a Ginnie Mae security" and earn a profit on the spread. "The conventional-loan world is much different than the Ginnie world because of the inherent risks tied to the credit around Ginnie Mae servicing, versus conventional servicing," Piercy said. "And why is that? "[With] first-time homebuyers, low down-payment programs, the demographics [of Ginnie loans] are such that you’ve got a greater propensity to fall into a default category." In the bigger picture, servicing rights for Fannie Mae and Freddie Mac loans also can be bought and sold, just as the MSRs for loans carrying Ginnie Mae's stamp are bought and sold. So, Recursion also provided a ranking of all agency MSR transfers — which includes sales and purchases of Freddie, Fannie and Ginnie MSRs. And, once again, the leading purchaser year to date through Dec. 1 of last year was Freedom Mortgage, with $143.4 billion in total agency MSR purchases, Recursion's data shows. That includes $40 billion in Fannie Mae servicing rights, $32 billion in Freddie MSRs and $71 billion in Ginnie MSRs. Freedom's all-agency MSR purchases over the period are double its closest rival: PHH Mortgage, at $68 billion. Trailing PHH in the category are JP Morgan, $62 billion; Lakeview Loan Servicing, $51 billion; and Matrix Financial, $46 billion. Piercy stresses that the MSR market is fluid in terms of sales and purchases, and for varied reasons. So, he cautions against drawing conclusions out of context from figures like delinquency rates, existing market share, or any lender's ranking relative to another. "You know, there’s a lot that can be involved, and different lenders are buying and selling MSRs for various reasons, even if they're a net buyer," he said. "They are buying or selling for portfolio management. Maybe they need to improve a [borrower-class] profile, or maybe they’re not having success in recapturing [refinancing] a certain profile. "So, they’ll strip that out and try to sell it [those MSRs] to someone who thinks they can do it better. I mean, that’s what the market really is all about." The post Freedom Mortgage dominates the MSR market appeared first on HousingWire. |
| Supreme Court orders review of recession-era class action against Rocket Posted: 13 Jan 2022 08:20 AM PST The Supreme Court weighed in on a class action lawsuit against Quicken Loans, now Rocket Mortgage, regarding its appraisal practices during the financial crisis, delivering a procedural win for the mortgage lender. On Monday, the Supreme Court remanded the class action to the United States Court of Appeals for the Fourth Circuit to reexamine its March decision in favor of borrowers. Rocket had requested the revision of the case last fall. The dispute involves a potential payment of $9.7 million stemming from allegedly tainted appraisals for 2,769 mortgage loans Quicken Loans originated from 2004 to 2009. Its affiliate appraisal company, Title Source, now Amrock, provided the appraisals, court records show. The lawsuit, filed in 2011 in the Circuit Court of Ohio County, West Virginia, claimed that the nonbank lender wrongly influenced home appraisal values during the financial crisis. Rocket, in a statement to HousingWire, said it is not surprised by the U.S. Supreme Court's ruling. "The facts of this case are clear, and demonstrate that our practices were compliant and that the refinance loans we provided benefited our West Virginia clients,” a Rocket spokesperson said. The leading plaintiffs are two couples, Phillip and Sara Alig and Daniel and Roxanne Shea, who refinanced their mortgages in 2007 and 2008, respectively. The borrowers paid for the appraisals – $260 from the Aligs and $430 from the Sheas – and received their refinance loans. But they claim that Quicken Loans influenced appraisers to raise their home values and originate higher loans. Messages left with plaintiffs’ attorneys were not returned. According to the lawsuit, the Aligs, for example, estimated their home was worth $129,000, and provided the information to Quicken Loans. Quicken Loans passed the value along to the appraisal company, which changed the home’s valuation from $122,500 to $125,500, the couple claimed. The Aligs obtained a $113,000 loan, putting them underwater. Expert witnesses estimated the actual 2007 value of their home to be as much as $26,000 less than the appraised value. Rocket claimed that plaintiffs were not injured because they benefited from obtaining the loans. In a statement to HousingWire, the company defended its past practices, pointing out that a dissenting judge in the Fourth Circuit had said that providing relevant information to appraisers “was an industry-wide practice.” According to the Fourth Circuit decision in March, plaintiffs are entitled to summary judgment on their claims for conspiracy and unconscionable inducement, but not for the claim regarding breach of contract. "Plaintiffs paid an average of $350 for independent appraisals that, as we conclude below, they never received. Instead, they received appraisals that were tainted when Defendants exposed the appraisers to the borrowers' estimates of value and pressured them to reach those values," the Fourth Circuit judges wrote. However, in its decision, the Supreme Court wrote that the dispute needs to be analyzed by the Fourth Circuit in light of TransUnion LLC v. Ramirez. In the case, concluded in June 2021, the Court stated that the law requires a concrete injury to grant a person the option to sue to vindicate a right. According to the case, "injury in law is not an injury in fact." The Fourth Circuit considered borrowers to have experienced financial harm when they paid for a home appraisal service influenced by Rocket. The company, however, said in the lawsuit the borrowers were uninjured, received the loans, and the Court needs to consider the level of harm suffered by each class member individually. Federal reforms following the 2008 financial crisis sought to put a firewall between lenders and appraisers. As a result of the changes, appraisal management companies came into wider use. Federal regulators, including the Federal Housing Finance Agency and the Department of Housing and Urban Development, are now focused on rooting out bias in appraisals, after a string of news stories and academic research suggesting bias may play a role in home valuations. A federal task force led by HUD is expected to make policy recommendations on appraisals in the early part of this year. Update: Title Source, now Amrock, is a subsidiary of Rocket Companies, not Rocket Mortgage. The post Supreme Court orders review of recession-era class action against Rocket appeared first on HousingWire. |
| Mortgage rates see sizable increase Posted: 13 Jan 2022 06:51 AM PST The average 30-year fixed rate mortgage increased to 3.45% during the week ending Jan. 13, up from 3.22% the week prior, according to the latest Freddie Mac PMMS Mortgage Survey. A year ago, the 30-year fixed rate mortgage averaged 2.79%. This is the third week of mortgage rate increases, after the 30-year fixed rate fell to 3.05% on Dec. 23 amid fears of the Omicron variant. The report is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20% down and have excellent credit. Rates rose across all mortgage loan types, according to Sam Khater, Freddie Mac's chief economist. Driving the increase is the expectation of a faster than expected tightening of monetary policy in response to a continued inflation caused by disruptions in labor and supply chains. "The rise in mortgage rates so far this year has not yet affected purchase demand, but given the fast pace of home price growth, it will likely dampen demand in the near future," Khater said. The Mortgage Bankers Association (MBA) showed on Tuesday that mortgage applications climbed 1.4% for the week ending Jan. 7. The growth was buoyed by a 2% increase in the trade group's seasonally adjusted purchase index. On the refinance front, the index dipped by 0.1% from the previous week, coming in 50% lower than the same week one year ago. Economists expect rates to increase in 2022 but will still be close to record-low levels. The MBA forecasts that 30-year mortgage rates will reach 4% by the end of 2022. The post Mortgage rates see sizable increase appeared first on HousingWire. |
| Guaranteed Rate closes Stearns wholesale channel Posted: 12 Jan 2022 01:14 PM PST Chicago-based Guaranteed Rate will discontinue its third-party wholesale channel, Stearns Wholesale Lending, just one year after it acquired the multichannel lender. "Guaranteed Rate will continue to thrive and win market share by having a laser focus on leveraging our industry-leading purchase platform augmented by the best loan officers in the business," Guaranteed Rate CEO Victor Ciardelli wrote in an email to brokers that HousingWire reviewed. To ensure success, the company "sometimes makes hard decisions," but Guaranteed Rate's leadership is committed to making what is already the best value for its customers, Ciardelli wrote. The email explained that the last day to register a loan is January 12, while the last day for closing a transaction is February 28. Guaranteed Rate acquired Stearns Holdings in January 2021 for an undisclosed sum from the financial giant Blackstone Group, which also acquired a stake in Guaranteed Rate as part of the transaction. The year prior, Stearns originated $20 billion in loans. HousingWire reported in 2021 that Stearns' retail operations would be folded into Guaranteed Rate. Wholesale, JV and partnership businesses remained as stand-alone segments led by Stearns' CEO David Schneider. Stearns had a sizable partnership business, led by Steve Stein, a more limited retail operation, and a wholesale channel that was the largest in the industry as recently as 2013, but had lost market share to UWM. Founded in 2000 and known for its robust retail operations, Guaranteed Rate has been growing in stature in recent years. In acquiring Stearns, the company sought to boost retail loan originations, scale its JV platform, and develop new multichannel capabilities. HousingWire reported the acquisition would provide significant revenue for Guaranteed Rate to pursue a potential IPO. Guaranteed Rate originated $90 billion from January to September 2021, an 81.8% increase compared to 2020, according to Inside Mortgage Finance. The volume puts the company as number eight among the top mortgage lenders in the country. The company's star loan officers have set origination records, explaining in part Ciardelli’s promise to invest and focus on the purchase platform its LOs use. Massachusetts-based Shant Banosian, for example, said he had funded a whopping $2 billion in total origination volume from November 2020 to November 2021. The figure is believed to be a record for a retail loan originator. His colleague Ben Cohen, a loan officer from Illinois, eclipsed the $1 billion threshold in September 2021. The post Guaranteed Rate closes Stearns wholesale channel appeared first on HousingWire. |
| FHFA’s loan-fee bump buoys PLS market Posted: 12 Jan 2022 12:09 PM PST  The Federal Housing Finance Agency's announcement last week that it will hike upfront fees for high-balance and second-home loans effective April 1 will provide a boost for the private-label securities market, according to executives at one of the leading sponsors of private-label securities. In fact, FHFA's new fee structure for government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac is expected to largely offset the effects of other recent policy changes that were projected to be a drag on the secondary market in 2022, according to Dashiell Robinson, president of Mill Valley, California-based Redwood Trust. "We do view the announcement to be a constructive one for the non-agency market," Robinson said. "The new pricing framework … should shift supply toward private market participants, like Redwood. "In today's current market, we see private-label securitization execution for these [high-balance and second-home loan] products as more favorable than selling to the GSEs, which should only become more apparent." Redwood, through its Sequoia Mortgage Trust (SEMT) conduit, brought to the market a total of nine securitization deals in 2021 backed by 4,705 loans valued at nearly $4.2 billion, bond-rating agency records show. The first securitization deal of 2022 issued through Redwood's Sequoia conduit (SEMT 2022-1) involved a loan pool of 751 mortgages valued at $687.2 million, a Kroll Bond Rating Agency report shows. "Redwood, through our Sequoia program [as of year-end 2021] has securitized nearly $30 billion of high-balance loans, across 76 deals since 2008," Robinson said. "We also distribute close to 50% of our production via whole loan sale to various insurance companies, asset managers and financial institutions — additional important sources of liquidity to the private sector." Chris Abate, Redwood's CEO, added: "The FHFA's announcement provides welcome additional alignment between private capital and the GSEs in furthering our collective goals for housing access and affordability. Redwood remains a highly complementary partner to the GSEs, and we view these changes to be constructive for non-agency origination volumes overall." That alignment, however, is subject to policy changes that bend and flex the relationship between agency and non-agency markets over time. The latest policy change for Fannie Mae and Freddie Mac will bump up loan-level origination fees for high-balance mortgages by between 0.25% and 0.75%, based on a tied loan-to-value schedule. For second-home mortgages, the tiered fees will increase between 1.125% and 3.875%. Two other recent policy changes announced last year, though, were deemed negative for the private-label market because they were seen as pushing more mortgages and securitizations toward the GSE bucket. In November 2021, FHFA, which oversees the GSEs, announced it was bumping up conforming loan limits for 2022, with 95% of U.S counties being subject to a new baseline GSE loan-limit of $647,200, while some 100 high-cost counties will have conforming loan limits approaching $1 million. As the GSE loan-limit box expands, it takes loans away from the private market, loans that can be pooled for private-label securitizations. Likewise, a surge in private-label transactions and deal volume in 2021 was propelled initially, in part, by FHFA policy changes in January 2021 to the preferred stock purchase agreements (PSPAs) governing the GSEs. The key change was a cap placed on the GSEs' acquisition of mortgages secured by second homes and investment properties. The private-label market boost from those changes was undone, however, by their suspension last September and are now under review by FHFA. FHFA Acting Director Sandra Thompson, nominated by President Joe Biden to become the permanent director of the agency, appears to be listening to the private market's concerns about GSE mission creep, at least when it comes to the question of affordable housing. "Compared to previous years, the 2022 conforming loan limits represent a significant increase due to the historic house-price appreciation over the last year," she said at the time the new loan limits were announced. "FHFA is actively evaluating the relationship between house-price growth and conforming loan limits, particularly as they relate to creating affordable and sustainable homeownership opportunities across all communities." The recent decision by FHFA to beef up its upfront loan-pricing fees for high-cost and second-home loans starting in April appears to be delivering on that promise, given it expands resources available to the GSEs for addressing affordable-housing concerns while also widening the playing field for the non-agency market. "For the industry, we expect the announcement to drive non-agency origination volumes higher, generally offsetting the projected decline from the higher conforming loan limits," Robinson said. "We also believe that the new loan-level price adjustment for second homes is a logical surrogate for the prior cap as it provides additional subsidy in a more predictable pricing fashion for origination. "Overall, 2022 supply outlook industry-wide for non-agency RMBS [residential mortgage-backed securities] is positive." But what the government gives, it also can take away again in the future. "Ultimately, if the new policy remains that way for an extended period, you will see the private-sector step in and possibly create greater liquidity," said Tom Piercy, managing director of Denver-based Incenter Mortgage Advisors. "But does it go the way of the second-home and investor-loan caps … six or nine months from now?” But it's not likely that a policy reversal on the GSE loan fees will be in the cards anytime soon, according to some industry observers, assuming Thompson's confirmation hearing goes well for her this week and she is named the permanent director of FHFA. Those observers point out that the federal policy for the government controlled GSEs is guided by the administration in power. The January 2021 changes to the PSPAs that capped the GSEs' purchase of investor-property and second-home mortgages, for example, was a policy initiated under the Trump administration. The caps were suspended in September 2021 under the Biden administration. It is in that context that the upfront loan fees are now being boosted. "While there have been many policy changes as of late for originators to digest, there are currently significant growth drivers for the industry," Redwood's Robinson said. "[Those include] the move to the new qualified mortgage ("QM") definition, anticipated growth in non-QM [mortgages] as originators look for more products to combat higher rates, and slight easing of the overcorrection in lending standards that occurred due to COVID, particularly as the economic recovery remains solid. "We have witnessed a number of recent and on-going examples of the strength and importance of the non-agency market, especially in addressing the evolving needs of the housing market," Robinson added, "and we would expect that positive momentum for the industry across non-agency products to continue." The post FHFA's loan-fee bump buoys PLS market appeared first on HousingWire. |
| Purchase loans drive mortgage applications higher Posted: 12 Jan 2022 04:00 AM PST Mortgage applications climbed 1.4% for the week ending Jan. 7, 2022, according to a survey published by the Mortgage Bankers Association this week. The growth was buoyed by a 2% increase in the trade group’s seasonally adjusted purchase index, the MBA said. Per the report, the unadjusted purchase index increased 51% compared to the previous week but was 17% lower than the same week one year ago. On the refinance front, the trade group’s refi index dipped by 0.1% from the previous week, coming in 50% lower than the same week one year ago. Joel Kan, associate vice president of economic and industry forecasting at the MBA, said in a statement that the increase in mortgage rates is curtailing refinance activity. "Mortgage rates increased significantly across all loan types last week as the Federal Reserve's signaling of tighter policy ahead pushed U.S. Treasury yields higher," Kan said. "Rates at these levels are quickly closing the door on refinance opportunities for many borrowers." As evidence, the report found that the refi share of mortgage activity fell to 64.1 % of total applications from 65.4% the previous week. The trade group noted that refi applications are at their lowest level in over a month, while conventional refi applications were at their lowest level since January 2020. Adjustable-rate mortgage (ARM) share of activity dipped to 3.1 % of total loan applications. Meanwhile, the share of total applications that made up FHA and VA loans grew to 9.9% and 11.4%, respectively. The USDA share of total applications remained unchanged from 0.4% the week prior, the MBA said. The trade group remarked that it "expects solid growth in purchase activity this year, as demographic drivers and the strong economy support housing demand. However, the strength in growth will be dependent on housing inventory growing more rapidly to meet demand," said Kan. Here is a more detailed breakdown of this week's mortgage applications data: The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $647,200) increased to 3.42% from 3.31%. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.50% from 3.40%. The average contract interest rate for 15-year fixed-rate mortgages increased to 2.73% from 2.60%. The average contract interest rate for 5/1 ARMs increased to 3.03% from 2.45 percent%. The post Purchase loans drive mortgage applications higher appeared first on HousingWire. |
| Redfin acquires Bay Equity, pink slips 121 staff Posted: 11 Jan 2022 03:31 PM PST Redfin announced Tuesday layoffs of 121 employees as it shakes up its mortgage department, including purchasing a lending company. The real estate company entered into an agreement to acquire mortgage lender Bay Equity Home Loans for $135 million, two-thirds in cash and one-third in stocks, Redfin said in a press release and public filing. Also, Redfin hopes it will let the company reduce investments in lending software by using the Bay Equity system. But Redfin is first eliminating 121 mortgage roles, less than 2% of the total staff, mainly in sales support, capital markets, and operations. Redfin said the affected employees have been notified of the layoffs, and that they have the opportunity to find another role at the company, especially in real estate support, title, and iBuying organizations. Rocket Pro TPO redesigns pricing calculator for brokers Rocket Pro TPO aims to help its broker partners grow their businesses. The new Pricing Calculator provides brokers with fast, reliable and accessible information that can help differentiate them from competitors. In the midst of this serious housing shortage, brokers need tools to help them provide top-notch service to homebuyers. Presented by: Rocket Pro TPO“Reorganizing our mortgage operations unfortunately means some colleagues and friends will be leaving Redfin," Wiener said in a statement. "Many of these people are the pioneers who helped build Redfin Mortgage from scratch and we owe them a debt of gratitude.” The move comes amid a bloodletting across mortgage with Wyndham Capital, Better.com and Interfirst Mortgage among the companies to announce significant layoffs as the music has stopped for high-volume refinancing. Founded in 2007, Corte Madera-based Bay Equity originated a volume at $8.5 billion in 2021, nearly ten times the size of Redfin’s existing portfolio. “For years, Redfin has talked about becoming a one-stop shop for brokerage, mortgage, iBuying and title services. Just having one company offer all services is more efficient, letting us keep customers' lending fees low," Redfin's CEO Glenn Kelman said in a statement. The post Redfin acquires Bay Equity, pink slips 121 staff appeared first on HousingWire. |
| Fannie plans $15B in CRT deals in 2022 Posted: 11 Jan 2022 12:17 PM PST  Fannie Mae opened 2022 with its 45th credit-risk transfer (CRT) deal through its Connecticut Avenue Securities (CAS) real estate mortgage investment conduit, or REMIC, bringing the collective value of notes issued through the conduit to nearly $52 billion since the first offering in 2013. The 45 CAS deals involved credit-risk transfer (CRT) notes issued to private investors against reference loan pools of single-family mortgages valued collectively as of the time of the transactions at just under $1.7 trillion. The initial deal of 2022 is the start of what is expected to be a busy year For Fannie Mae on the CRT front. “In 2022, we look forward to bringing [to market] approximately $15 billion in our on-the-run CAS REMIC transactions, subject to market conditions and other factors," said Devang Doshi, senior vice president of single-family capital markets at Fannie Mae. Through a CRT transaction, private investors participate with government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac in sharing a portion of the mortgage credit risk in the reference loan pools retained by the GSEs. Investors receive principal and interest payments on the CRT notes they purchase, but if credit losses exceed a predefined threshold per the security issued, then investors are responsible for absorbing the losses exceeding that mark. "When they do a credit-risk transfer transaction, it’s taking risk from that huge bucket [the reference loan pool] and selling off most of the credit-risk pieces," said Roelof Slump, managing director of U.S. RMBS at Fitch Ratings. The initial CRT deal of 2022, CAS 2022-R01, involves a $1.5 billion note issued against a reference loan pool of 180,002 residential mortgages with an outstanding principle balance of $53.7 billion. In the final CRT deal of 2021, CAS 2021-R03, Fannie Mae issued a $909 million note against a reference pool of 117,000 single-family mortgages valued at about $35 billion. The prior two deals in 2021 involved CRT notes with a combined value of nearly $2.2 billion. CAS Series 2021-R02, was issued in November and involved transferring loan-portfolio risk to private investors via a $984 million note offering backed by a reference pool of some 125,000 single-family mortgage loans valued at $35 billion. In October, the agency made a $1.2 billion CRT note offering, CAS Series 2021-R01, backed by a reference pool of 246,836 single-family mortgage valued at $72 billion. Prior to restarting CRT offerings last year, Fannie Mae had backed away from the CRT market for a time — with its prior transaction closing in March 2020. Fannie and Freddie's efforts on the CRT front were bolstered recently by pending changes to their capital-reserve rules that are being advanced by the Federal Housing Finance Agency (FHFA), which oversees the GSEs. Pre-sale reports prepared by Kroll Bond Rating Agency on Fannie's latest two deals include a note caution for at least one facet of the agency's CRT transactions. The reports point out that appraisal waivers were issued for about 44% of the reference pools in each transaction. "Loans with appraisal waivers have comprised an increasing percentage of agency loans, including those in CRT reference pools," the KBRA notes in the presale reports for both the CAS 2021-R03 and CAS 2022-R01 deals. "It should be noted that while the acceptability of a property value or sales price based on the use of proprietary models and market data is assessed, it does so without Fannie Mae having performed a property review or having obtained a valuation of the property. "As a result, KBRA applied a broad valuation haircut to such loans." The KBRA reports also indicate that the reference-pool loans in both CRT deals have broad geographic diversity, compared with typical non-agency deals, which helps to insulate the mortgage pools from regional economic shocks. In addition, the borrowers involved in each deal have solid credit scores — in the range of 760 on average — and an average debit-to-income ratio of 33.7%, which the KBRA reports state is "consistent with prime-quality underwriting." On another front, the other government-sponsored enterprise giant Freddie Mac, recently announced that its single-family credit risk transfer (CRT) program is projecting note volume of at least $25 billion in 2022. Its CRT program was founded with Freddie Mac's issuance of the first Structured Agency Credit Risk (STACR) notes in July 2013. In November 2013, its Agency Credit Insurance Structure(ACIS) program was introduced. Freddie Mac issued more than $18 billion in CRT notes across 10 STACR and 11 ACIS deals in 2021, according to the agency. Some 50% of the Freddie's single-family mortgage portfolio, or more than $2.5 trillion in mortgages, is covered by credit enhancements, according to an agency press release. "Freddie Mac … plans to optimize our CRT offerings in 2022," said Mike Reynolds, vice president of single-family CRT at Freddie Mac. "We expect a record year for STACR and ACIS issuance." The post Fannie plans $15B in CRT deals in 2022 appeared first on HousingWire. |
| Mortgage delinquency rate reaches prepandemic levels Posted: 11 Jan 2022 05:00 AM PST Mortgage delinquency rates hit pre-pandemic levels in October due to labor market improvements and home equity increases, according to the most recent CoreLogic Loan Performance Report. The expectation is that rates will continue to decline during 2022. In October, 3.8% of mortgages were delinquent by at least 30 days, including foreclosure, close to the 3.7% rate registered in the same period of 2019. In October of 2020, the delinquency rate was at 6.1%. “Improving economic security and the benefits of disciplined underwriting practices over the past decade are helping reduce or avoid mortgage delinquencies,” said Frank Martell, president and CEO of CoreLogic, in a statement. The report found that 82% of the jobs lost in March and April 2020 were recovered by October, accounting for 18.2 million Americans back at work, according to the Bureau of Labor Statistics. According to Martell, the expectation is that delinquency will trend down as the economy continues to rebound from the pandemic, employment grows, and high levels of fiscal and monetary stimulus continue. In October, the transition rate – mortgages transitioning from current to 30 days past due – dropped one basis point in one year to 0.7%. The serious mortgage delinquency rate (90 days or more past due, including loans in forbearance) dipped 19 basis points year over year to 2.2% in October. Frank Nothaft, CoreLogic’s chief economist, mentioned that loan modifications have helped reduce loans in serious delinquency. However, some borrowers are still facing severe financial challenges. “Nonetheless, there were about one-half million more loans in serious delinquency in October than at the start of the pandemic in March 2020.” The report, published on Tuesday, accounts for only first liens against a property, and rates are measured only against homes with an outstanding mortgage. CoreLogic has approximately 75% coverage of U.S. foreclosure data. The post Mortgage delinquency rate reaches prepandemic levels appeared first on HousingWire. |
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