FINRA 4210: Time to Prepare

Posted in Perspectives, Recent News.

The FINRA Rule 4210, which establishes margin requirements for Covered Agency Transactions, including TBAs, has been a concern of secondary hedgers since the SEC’s approval of it back in June of 2016. After several delays to the effective implementation date, it looks like this latest date of June 25, 2018 just might stick. How does… Read more »

MIAC Perspectives – Fall 2017

Posted in Perspectives, Recent News.

In this issue… CECL – Raising the Standards of Success Dean Hurley, Managing Director, Structured Products Group Jeffrey Zuckerman, Vice President, Capital Markets Group The CECL is bringing fair value into the ALLL. We describe how the standards are impacting the financial industry — and how MIAC is partnering with organizations to ensure a smooth implementation. Read… Read more »

Whole Loan Execution Update

Posted in Perspectives.

Market Size Residential mortgages generally fall into one of two categories:  Agency — eligible for programs offered by Fannie Mae, Freddie Mac, or Ginnie Mae (FHA/VA) — and non-Agency. As of Q1 2017, Agency loans are approximately 85% of new originations. According to the Federal Reserve Board, mortgage debt outstanding in that year totaled approximately… Read more »

CECL – Raising the Standards of Success

Posted in Current Expected Credit Loss: CECL News & Events, Perspectives.

Overview of the Rules CECL overhauls the current impairment models for loans, leases and debt securities, and also impacts commitments. It removes the “probable” threshold under the “incurred loss model” for recognizing credit losses. Firms will be required to report the current estimate of lifetime loan losses, incorporated into the Allowance for Loan and Lease… Read more »

Residential MSR Market Update – November 2017

Posted in MSR Market Updates, Perspectives.

As measured by Bankrate, month-over-month primary market 30-Yr conventional mortgage rates increased by three basis points to end the month of October at 3.83%. Quarter-over-quarter, 30-Yr conventional rates experienced a slight two basis point decline. While this amount of month-over-month mortgage rate movement may produce only a minimal upward shift in value, there was also… Read more »

Superior Integration to FNMA Cash Window in MarketShield® v5.0

Posted in Perspectives.

MIAC’s secondary markets trading desks have been enjoying the recent addition of a new, advanced integration to the FNMA Cash Window that is providing us with substantial time savings.  We are pleased to announce that this enhancement to our MarketShield® platform is now available for client use. Our latest release of MarketShield v5.0 not only… Read more »

Selling Seasoned Residential Whole Loans to the GSEs or Ginnie Mae

Posted in Perspectives.

Who are the GSEs and Ginnie Mae? Fannie Mae, the Federal National Mortgage Association (FNMA) and Freddie Mac, the Federal Home Loan Mortgage Corporation (FHLMC) are the established secondary market lenders responsible for the liquidity of the majority of conventional, non-Government, conforming residential whole loans that are originated today and for the past number of… Read more »

Mortgage Benchmark Prices and Yields in a Post-LIBOR World

Posted in Perspectives.

Executive Summary For purposes of lowering mortgagor borrowing costs, building a stronger banking system through more efficient hedging of mortgage risk and  encouraging additional capital to enter the mortgage sector, we believe there  is ample reason to include a mortgage current coupon yield index as one of  the alternative indices to LIBOR Now that protective… Read more »

Choosing a Hedge Vendor and Preparing for Hedging

Posted in Perspectives.

Macro Considerations At a high level, considerations for how to choose 1) a pipeline hedge vendor and 2) the type of engagement with a hedge advisor, are dependent on characteristics of the lending institution, including: Type of institution: i.e. independent mortgage banker, depository Evolutionary stage of the firm: BE to Mandatory conversion? Becoming an agency… Read more »

What is a Mortgage Servicing Right (MSR)?

Posted in MSR Market Updates, Perspectives.

    By definition a Mortgage Servicing Right, herein referred to as MSR(s), is a contractual agreement where the right, or rights, to service an existing mortgage are sold by the original lender to another party who, for a fee, performs the various functions required to service mortgages. As a servicer, firms are responsible for… Read more »