Secondary markets

The nonconforming market is ready to absorb most of the government-sponsored enterprise loans covered by the QM patch, but not all of them, according Redwood Trust.

Prepayments tied to repeated VA loan refinancing activity have had an adverse effect on Ginnie’s mortgage securities that persists despite countermeasures. The government bond issuer is making new plans to address the impact.

With prospects for government-sponsored enterprise reform improving, players in the private residential mortgage-backed securities market are starting to think about how they could better compete against the GSEs while awaiting change.

Investors can now exchange certain existing Freddie Mac bonds for to-be-announced uniform mortgage-backed securities in preparation for the full launch of UMBS next month.

Freddie Mac exchanged existing bonds from its portfolio for mirror certificates for the first time, completing a key test that is central to the creation of a uniform mortgage-backed security.

The Federal Housing Finance Agency, by allowing Fannie Mae and Freddie Mac to split the CEO and president positions, let the companies dodge a congressionally mandated cap on executive salaries, the regulator's inspector general said.

The Securities Industry and Financial Markets Association approved changes to its good delivery guidelines that ease the path to the government-sponsored enterprises issuing uniform mortgage-backed securities starting on June 3.

Ginnie Mae could limit how much servicing income mortgage lenders can sell off through a transaction if they don't establish a minimum 25-basis-point spread at the portfolio level by next year.

Michael Bright is resigning as acting president of Ginnie Mae to run the Structured Finance Industry Group, a trade association that's been without a CEO since Richard Johns resigned in July amid a reported split with the group's board.

Acting Ginnie Mae President Michael Bright will leave his post on Jan. 16 and will no longer seek confirmation to be the permanent head of the mortgage secondary market agency.