Is RMBS credit more insulated from originator woes this time around?

Investors have been watching the mortgage industry closely as it has downsized amid the sudden uptick in interest rates this year, which begs the question: To what extent will the bankruptcy-remote trusts used in private securitization protect loan performance from originator struggles? With the private-label residential mortgage-backed securities market's crash during the Great Recession looming large for many in that context, Kroll Bond Rating Agency recently looked into how the credit implications of the lull in origination volume compares, and concluded in a report released this week that investors are a lot better protected from credit risk now. The conclusion is generally in line with credit availability indexes that the Mortgage Bankers Association and Urban Institute's Housing Policy Finance Center separately publish.

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Bank exams plummet with 'remote' supervision as small banks struggled: GAO

The revelation that some small financial institutions are still relying heavily on paper files and couldn't send documents to their regulators' secure portals was revealed Thursday in a 49-page Government Accountability Office report. Some small banks were unable to perform routine tasks such as sharing credit files or loan documents with examiners and couldn't provide access to internal systems so examiners could conduct loan reviews and testing, the GAO said.? The report, a post-mortem examining "lessons learned" from remote bank supervision, found that regulators faced many challenges conducting audits due to the technology gap between large and small financial institutions.

UWM next to boost its conforming limit early

United Wholesale Mortgage quickly followed its Detroit-area rival Rocket Pro TPO in boosting its conforming loan limit in advance of any action by the Federal Housing Finance Agency. UWM is now buying loans eligible for sale to Fannie Mae or Freddie Mac up to $715,000; the single-family conforming limit for 2022 is $647,200. It will have to retain these mortgages on its balance sheet until the start of 2023, at which time it could sell them to the government-sponsored enterprises. National Mortgage News reached out to several other nonbank lenders to see if they were also raising their conforming limits early.

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Servicers say data breaches hit combined 4 million borrowers

An unauthorized person accessed files including the names and Social Security numbers of 116,803 borrowers with Community Loan Servicing, the company revealed in a notice filed last month with the Indiana Attorney General's office. The hack at the Bayview subsidiary occurred at the same time as massive breaches at sister companies Lakeview Loan Servicing and Pingora Loan Servicing. The Lakeview cyberattack ensnared 2,638,057 borrowers and the Pingora incident involved 1,268,348 consumers, according to public disclosures, bringing the total number of impacted customers at Bayview-owned servicers to 4,023,108. The hacks at the Bayview-owned servicers are the largest reported incidents in the mortgage industry in the past 12 months.?

Let lessons of the past shape a more equitable housing finance system, Ginnie Mae’s McCargo says

Ginnie Mae recently updated the minimum financial requirements for independent mortgage bank (IMB) issuers. In the wake of that announcement, we've heard a lot of arguments that conflate prudent risk management with restricting access to credit. I decided to address this misconception head on. Anyone who was working in this industry during the Great Recession of 2008 knows that there is no access to credit without a diversified source of mortgage lenders. Broad access to credit is sustained by prudent capital standards. Households and communities that rely on Ginnie Mae's insuring partners are among the most vulnerable borrowers in our country. Our experience has confirmed that a housing market downturn inflicts harm on these communities first, impacts them more deeply, and they're frequently the last to recover. Our recent update to our standards is informed both by this experience and our unique role in the housing finance system and prioritizes alignment with other key agencies that govern IMBs.

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