A Banner Year for Warehouse Finance; Non-agency MBS Heats Up - IMFnews

Share Register Advertise March 09, 2021 A Banner Year for Warehouse Commitments: $137 Billion pmuolo@imfpubs.com A record year for residential originators almost always translates into a record year for warehouse providers, the lifeblood behind the nonbank sector. In 2020, the numbers didn’t disappoint. According to a new tally from Inside Mortgage Finance, warehouse lenders ended 2020 with $137.0 billion of commitments on their books, a sequential improvement of 4.6% and a year-over-year gain of 35.6%. In short, as loan applications continued to swell as the fourth quarter drew to a close, nondepositories pounded on the door of their bankers, requesting expansions of their existing lines. The great irony: As federally insured banks continued to lose residential lending market share to the Quickens and the Freedom Mortgages of the world, their investment banking units benefitted by arming the competition. For full details and a ranking of the top financiers in the sector, see the new edition of Inside Mortgage Finance, now available online. Fannie Will Resecuritize RPLs with Principal Forbearance dhollier@imfpubs.com Saddled with delinquent product from the pandemic, Fannie Mae recently announced plans to issue mortgage-backed securities collateralized by pools of reperforming loans with principal forbearance. According to some industry observers, the new MBS, which Fannie says may total as much as $5 billion in 2021, could foreshadow the GSE’s treatment of troubled loans after the end of COVID-related forbearance. But Fannie was quick to point out that borrowers harmed by the pandemic receive temporary payment forbearance, which is different from principal forbearance. Temporary payment relief is appropriate for periods of short-term hardship where it’s reasonable to expect a resolution. Under this arrangement, borrowers make no payments for a specific period of time. After that, the expectation is that they can resume normal mortgage payments. For more details, see the new edition of Inside MBS & ABS, now available online. Prime Non-Agency MBS Issuance Heats Up bivey@imfpubs.com Three issuers of prime non-agency mortgage-backed securities introduced separate deals on Monday, with all of the collateral coming from recent originations. The largest of the batch is a $404.1 million MBS from Wells Fargo, which sourced the product from its retail network. Also, an affiliate of Quicken Loans is marketing a $373.0 million security. Here, roughly 91% of the loans were originated through the nonbank’s retail channel, with the rest coming from third-party loan brokers. Last but not least, Redwood Trust is set to issue a $348.5 million MBS, with loans sourced through several different originators led by PrimeLending with a 10.3% share. Redwood had the fastest turn time among the three issuers: Loans backing the transaction have seasoned for an average of 1.3 months. For a complete roundup of recent nonagency deals, see the new editions of Inside MBS & ABS and Inside Nonconforming Markets, available later in the week. JPMorgan Chase Settles Accusations of Race-Based Appraisal mvolkova@imfpubs.com JPMorgan Chase has reached a $50,000 settlement with a plaintiff who accused the mortgage lender of appraising her house for less because of her race, the Department of Housing and Urban Development announced Monday afternoon. The payment must be made within 15 days of the effective date of the settlement. Additionally, the "conciliation agreement," as HUD called it, requires the nation's fifth largest residential originator to “provide home lending advisors and client care specialists with mandatory training on the reconsideration of value process and fair lending issues related to appraisals,” HUD said. “The race of a homeowner and the racial composition of their neighborhood must not influence the valuation of a home,” said Jeanine Worden, acting assistant secretary for Fair Housing and Equal Opportunity at HUD. Worden added, “The Fair Housing Act prohibits the consideration of race as a factor in the appraisal of a home and in the provision of other real estate-related services. Discrimination in home buying, mortgage lending, and property appraisal deprive qualified individuals of an equal opportunity to pursue homeownership as a path to family stability and financial security.”   loanDepot Increases Repo Line. Reason: Ginnie EBOs pmuolo@imfpubs.com loanDepot, one of the largest  Ginnie Mae issuers in the nation, is upping its early buyout game. According to a new 8-K filing with the Securities and Exchange Commission, the nonbank has entered into a $2 billion master repurchase agreement with Credit Suisse First Boston to fund, at least partially, the acquisition of delinquent mortgages from MBS pools. The repo line was originally sized at $1.5 billion. Credit Suisse, facilitating the deal through a Cayman Islands branch, has established Alpine Securitization Ltd. as the buyer/counterparty. Over the past three quarters, several Ginnie issuer/servicers have turned a nice profit by purchasing delinquent FHA (and to a lesser degree VA) mortgages out of MBS pools, rehabilitating the notes and then repooling them. 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