A top Mortgage News Agency announced this morning that there are now two different companies working on Residential Mortgage Backed Securities from “private” labels. ?????
Most (read 99.99999%) of the mortgages originated today are back by the Government in some form or fashion. Fannie Mae, Freddie Mac, Ginnie Mae – QE3, the Government is buying mortgages.
The Government is also setting the “terms” of those mortgages – meaning if you are self employed you must meet “these” guidelines, if you have a credit score of “this” then you can get a FHA loan, with “that” you don’t get to buy a house yet. They are also setting restrictions on how many units in a Condo can be Investment Property or rented to College kids (for instance) in order to get a traditional mortgage.
These guidelines are TIGHT… and the intent all along was for there to be “private equity” firms that would come in and set up programs that were a little riskier. Additionally, the Government is NOW using these agencies to add fees, which will make rates go up on Nov 1. Maybe the money will offset the deficit??
Are warning bells going off in your head? Afraid this is how we got in trouble in the first place? You could be right – but for the most part, having some non-agency issued outlets for mortgages would be a good thing in our opinion. Here’s the News:
Specialty finance company Shellpoint Partners, filed a shelf registration with the Securities & Exchange Commission to allow for the issuance of non-agency residential mortgage backed securities.
The company, also known as Shelly Mac, will originate private mortgages for securitization via its subsidiary New Penn Financial.
The Chairman of Shellpoint’s Board of Directors is Lewis S. Ranieri, a securitization pioneer and Chairman of Ranieri Partners, which has interests in a variety of real estate-related platforms and is a part-owner of Shellpoint.
“One of Shellpoint’s strategies is to increase the financing options for prime quality borrowers who do not fit within agency underwriting guidelines,” the company said in a statement.
Such filings are expected to grow more commonplace as the need for private financing in housing grows. Currently there is only one real player in the game, Redwood Trust, which is looking to price its fifth RMBS this year. The Redwood loans, it should be noted, are originated by mortgage lenders. In the case of Shellpoint, the mortgages would be originated in-house by New Penn.
Demand for private-label RMBS is also growing due to the low supply of fresh paper and the huge buying presence of the Federal government in the Fannie Mae, Freddie Mac and Ginnie Mae space.
“At present, Shellpoint expects to securitize only prime-quality non-agency loans originated by New Penn Financial, rather than sourcing loans to securitize through bulk loan purchases from third-party originators,” the company said.
“Shellpoint and New Penn Financial are excited to announce this important step in the non-agency securitization process,” said Bruce Williams, Co-CEO of Shellpoint commented, “housing is a vital part of the national economy and it needs private capital to return to a state of health.”
Have questions about buying a house in NC? Call Steve and Eleanor Thorne 919 649 5058 we would love to help you!