Fed MBS Purchases Exceed Agency Production in First Half

Despite a significant slowdown in June, Federal Reserve purchases of agency MBS eclipsed the $1 trillion mark in the first six months of 2009. Significantly, that amounted to 108 percent of actual agency MBS issuance by Ginnie Mae, Fannie Mae and Freddie Mac during the first half. If there ever was any question about how committed the U.S. Government is to driving down mortgage rates, the whopping $1.001 trillion in agency MBS purchases answers with a resounding “very committed.” Not only did the Fed buy the equivalent of all the $928 billion in agency MBS produced in the first half, but the agency also bought an additional $73 billion worth.

Ginnie Mae Ends 2008 with 33% Market Share, Up from 5% in 2007

Benefiting from huge surge in FHA lending last year, Ginnie Mae’s share of the mortgage security market shot up to 22 percent for the full year 2008, according the Inside Mortgage Finance MBS Database. Ginnie’s share was up from only 5 percent in 2007. And in a sign of what is to come in 2009, Ginnie Mae ended last year with a 33 percent MBS market share in the fourth quarter.

More than $269 billion in Ginnie Mae securities were issued in 2008, a record-breaking level. Countrywide was the top Ginnie Mae issuer in 2008, followed by Wells Fargo, Chase Manhattan Mortgage, CitiMortgage and Taylor Bean and Whitaker.

Top Three Issuers Dominate Ginnie Mae Market in 3Q08

Countrywide/Bank of America, Wells Fargo and JPMorgan Chase dominated the ranks of Ginnie Mae issuers in the third quarter as FHA continued to post record breaking volume. According to the Inside Mortgage Finance MBS Database, these three mega-lenders produced some $48.4 billion in new Ginnie Mae mortgage securities over the past three months – or 60 percent of the total volume.

Rounding out the top five Ginnie Mae issuers in 3Q08 were CitiMortgage and GMAC Mortgage. During the first nine months of this year, Ginnie Mae volume was up a whopping 190 percent on a year-over-year basis.

Fannie’s and Freddie’s Business Took Nose-Dive in July

Despite a mortgage market environment that has pushed more and more borrowers their way, Fannie Mae and Freddie Mac saw a sharp drop in their purchase volume last month. According to numbers compiled by Inside Mortgage Finance, Fannie’s mortgage securitization activity tumbled 34 percent between June and July, while Freddie’s plummeted 49 percent. The big decline in government-sponsored enterprise mortgage activity appears attributable to a combination of tighter underwriting standards and a continuing slowdown in home purchases.

Importantly, the slowdown in GSE mortgage activity does not appear to be spilling over into the FHA or VA mortgage markets. The securitization of FHA and VA loans into Ginnie Mae mortgage securities slipped only 6 percent between June and July. As a result, Ginnie’s share of the total mortgage securities market jumped to 30 percent in July – the highest level seen in a generation.

Ginnie Mae MBS Activity Soars in First Half of 2008

Fueled by a huge surge in FHA lending, issuance of Ginnie Mae mortgage-backed securities jumped a whopping 188 percent on a year-over-year basis in the first six months of 2008. Countrywide continued to edge out Wells Fargo for the title of top Ginnie Mae issuer in the first half – but not by much. Countrywide issued $22.3 billion in Ginnie Mae securities while Wells produced $21.2 billion, a new Inside Mortgage Finance ranking reveals. Third place JPMorgan Chase posted the largest increase of the top five issuers with a huge 355 percent increase in Ginnie Mae MBS issuance.

Conforming Jumbo Activity Surges in FHA Program

Although lending in so-called conforming jumbo mortgages - those between $418,000 and $729,750 - has gotten off to a slow start since Congress authorized Fannie Mae, Freddie Mac and FHA to start doing business in the higher balance loans, things may be changing.

Data compiled by Inside Mortgage Finance reveal that a sizeable $1.24 billion in newly minted FHA conforming jumbo loans are slated for Ginnie Mae securities during the month of July. This is way up from the $592 million in conforming jumbo loans that have shown up from Fannie, Freddie or Ginnie Mae since April. You can get an inside look at the emerging market for conforming jumbo mortgage loans at an upcoming audio conference offered by Inside Mortgage Finance. Click here for more info.