Dec. 23: Vendor news; Secondary market deals; Freddie’s forecast mirrors other 2024 thoughts; Christmas poem from a reader

“How much does Santa pay to park his sleigh? He pays nothing; It’s on the house.” Does that count as housing/mortgage humor? While we’re on housing, if you’re thinking about 2024, Freddie Mac sent out its outlook. If you don’t want to take the time to click on the link: economic growth lower than 2023, unemployment higher (stop me if you’ve heard this before), mortgage rates are expected to be in the 6-7 percent range during the year, and Freddie thinks that home prices will rise more than 6 percent. For the tens of millions of Millennials who don’t own a home yet, for-sale inventory is expected to remain depressed, and Freddie sees a slight increase in dollar volume for purchase originations while refinancing is stagnant. Lastly, Freddie believes that the U.S. Federal Reserve will start cutting rates. All pretty safe bets.

Vendor tidbits


ACES Quality Management® (ACES), the leading provider of enterprise quality management and control software for the financial services industry, announced the release of its quarterly ACES Mortgage QC Industry Trends Report covering the second quarter (Q2) of 2023. The latest report analyzes post-closing quality control data derived from ACES Quality Management & Control® software. Notable findings from the Q2 2023 report include the following: The overall critical defect rate decreased by 3.37% to 1.72%, marking the third consecutive quarter of decline. Defects in the Credit and Liabilities categories increased for the second straight quarter. While Income/Employment and Assets continued to improve, these remain the top two defect categories for Q2 2023, followed by Loan Documentation at No. 3.

Findings for the Q2 2023 ACES Mortgage QC Industry Trends Report are based on post-closing quality control data derived from the ACES Quality Management and Control® benchmarking system and incorporate data from prior quarters and/or calendar years, where applicable. All reviews and defect data evaluated for the report were based on loan audits selected by lenders for full file reviews.

BaseCap Analytics, a provider of innovative technology that empowers organizations to ensure data integrity and maximize automation, announced a pilot with Cenlar FSB, the nation’s leading mortgage subservicer. BaseCap’s technology helps businesses overcome their data management and regulatory reporting by rapidly identifying data inconsistencies, paving the way for swift resolutions and improved accountability and accuracy. By leveraging BaseCap’s platform to ensure the accuracy of third-party data, Cenlar expects to fortify its compliance processes for all applicable regulations and increase operational efficiency.

Thinking of having borrowers pay for credit reports upfront? If you read this commentary regularly, you know you’re not alone. With another credit fee increase coming, overall loan level costs continuing to increase, and the growing need to capture servicing payments, having a streamlined process for providing payment requests to borrowers has never been greater. The Ignite Payment Engine allows lenders to request itemized fees and servicing payments from borrowers seamlessly from within Encompass. Borrowers receive a PII Secure link to pay their fees or mortgage payment within minutes and have the payment(s) confirmed back into Encompass. This fully integrated payment solution, which accepts credit card and ACH payments, updates the itemization or loan balance upon payment confirmation. The system has full refund capability and can integrate into your accounting solution to dramatically improve your payment reconciliation process. Contract Frank Fiore for a demo today to start better managing and reducing your costs to originate heading into 2024.

After a document library audit, Docutech is updating TX Home Equity 3185 Affidavit and Agreement to include a Home Equity Line of Credit (HELOC) version.

Deals in the secondary market help drive primary market rates


Unless a manufacturer has an outlet for what it produces, there is little reason to produce it. The same can be said for home loans of any size, shape, program, location, interest rate, etc. The $100 -150 billion a month has to go somewhere, right? Let’s see what’s going on out there.

Ginnie Mae’s mortgage-backed securities (MBS) portfolio outstanding grew to $2.492 trillion in October, including $33.8 billion of total MBS issuance, leading to $15 billion of net growth. October’s new MBS issuance supports the financing of nearly 110,000 households, including 53,000 first-time homebuyers. Approximately 75 percent of the October MBS issuance reflects new mortgages that support home purchases, because refinance activity remained low due to higher interest rates. The October issuance includes $32.5 billion of Ginnie Mae II MBS and more than $1.3 billion of Ginnie Mae I MBS, including approximately $1.2 billion in loans for multifamily housing. For the 2023 calendar year to date, Ginnie Mae supported the pooling and securitization of more than 520,000 first-time homebuyer loans. For more information on monthly MBS issuance, Unpaid Principal Balance (UPB), real estate investment conduit (REMIC) monthly issuance, and global market analysis, visit Ginnie Mae Disclosure.

Point, the leading home equity investment platform making homeownership more valuable and accessible, and Redwood Trust, Inc., a leader in expanding access to housing for homebuyers and renters, announced they have completed the first rated securitization of Point’s Home Equity Investment (“HEI”) assets, issuing approximately $139 million of rated asset-backed securities. The Transaction represents the second HEI-backed securitization that Point and Redwood have completed together, having issued the first-ever securitization backed entirely by HEIs in 2021. The Transaction closed on October 31, 2023. The issuer, Point Securitization Trust 2023-1, issued approximately $117 million of senior class A-1 securities and approximately $22 million of class A-2 securities, rated A (sf) and BBB (low) (sf), respectively, by DBRS Morningstar. Co-sponsoring the Transaction with a subsidiary of Redwood, Point was the originator of all of the HEIs in the securitization and will continue to service such assets.

Freddie Mac announced that it sold via auction 88 non-performing residential first lien loans (NPLs) from its mortgage-related investments portfolio to GITSIT Solutions, LLC and VRMTG ACQ, LLC, a woman-owned business. Freddie Mac’s seasoned loan offerings focus on reducing less-liquid assets in the company’s mortgage-related investments portfolio in an economically sensible way. The sale is part of Freddie Mac’s Extended Timeline Pool Offering (EXPO®) and the transaction is expected to settle in December 2023. Given the delinquency status of the loans, the borrowers have likely been evaluated previously for loss mitigation, including modification or other alternatives to foreclosure, or are in foreclosure. Mortgages that were previously modified and subsequently became delinquent comprise approximately 33 percent of the pool balance. Also, purchasers are required to honor the terms of existing loss mitigation agreements and solicit distressed borrowers for additional assistance except in limited cases and ensure all pending loss mitigation actions are completed. Since 2011, Freddie Mac has sold $9.7 billion of NPLs and securitized approximately $77.4 billion of RPLs consisting of $30.4 billion via fully guaranteed MBS, $34.9 billion via the Seasoned Credit Risk Transfer (SCRT) program, and $12.1 billion via the Seasoned Loan Structured Transaction (SLST) program. Requirements guiding the servicing of these transactions are focused on improving borrower outcomes and stabilizing communities. Additional information about the company’s seasoned loan offerings can be found at:

Fannie Mae announced the winning bidder for its twenty-second Community Impact Pool (CIP) of non-performing loans. The transaction is expected to close on January 22, 2024, and includes approximately 61 loans totaling $18.4 million in unpaid principal balance (UPB). The CIP awarded in this most recent transaction includes 61 loans with an aggregate UPB of $18,404,738, average loan size of $301,717, and weighted average note rate of 5.75 percent. The loans are geographically focused in the New York area. The winning bidder was 510 Residential Loan Acquisition V LLC (400 Capital). The cover bid, which was the second highest bid, for the CIP was 82.12 percent of UPB (30.89 percent of BPO). Interested bidders can register for ongoing announcements, training, and other information here.

Fannie Mae announced that it has executed its ninth and final Credit Insurance Risk Transfer (CIRT) transaction of 2023. CIRT 2023-9 transferred $270.7 million of mortgage credit risk to private insurers and reinsurers. Year to date, Fannie Mae has acquired approximately $3.66 billion of insurance coverage on $121 billion of single-family loans from nine CIRT deals issued in 2023. The covered loan pool for CIRT 2023-9 consists of approximately 34,000 single-family mortgage loans with an outstanding unpaid principal balance of approximately $11.5 billion. The covered pool includes collateral with loan-to-value (LTV) ratios of 80.01 percent to 97.00 percent acquired between October 2022 and December 2022. The loans included in this transaction are fixed-rate, generally 30-year term, fully amortizing mortgages and were underwritten using rigorous credit standards and enhanced risk controls. With CIRT 2023-9, which became effective September 1, 2023, Fannie Mae will retain risk for the first 165 basis points of loss on the $11.5 billion covered loan pool. If the $190 million retention layer is exhausted, 21 reinsurers will cover the next 235 basis points of loss on the pool, up to a maximum coverage of $270.7 million. Since inception to date, Fannie Mae has acquired approximately $25.9 billion of insurance coverage on $870.2 billion of single-family loans through the CIRT program, measured at the time of issuance for both post-acquisition (bulk) and front-end transactions. As of September 30, 2023, approximately $1.27 trillion in outstanding unpaid principal balance of loans in our single-family conventional guaranty book of business were included in a reference pool for a credit risk transfer transaction. Fannie Mae provides ongoing, robust disclosure data, as well as access to news, resources, and analytics through its credit risk transfer webpages.

Fannie Mae priced its third Multifamily Connecticut Avenue Securities (MCAS) transaction, MCAS Series 2023-01, a $595 million note offering. MCAS, Fannie Mae’s issuance program designed to share credit risk on its multifamily conventional guaranty book of business, complements the successful risk sharing in its Delegated Underwriting and Servicing (DUS) and Multifamily Credit Insurance Risk Transfer (MCIRT) programs. The reference pool for MCAS Series 2023-01 consists of 432 multifamily mortgage loans with an outstanding unpaid principal balance of approximately $24 billion. The reference pool includes multifamily loans underwritten according to Fannie Mae’s standards and acquired by Fannie Mae from January 1, 2021, through December 31, 2022. The loans included in this transaction are fixed-rate multifamily mortgages with terms less than or equal to 12 years and with unpaid principal balances greater than $30 million, in addition to other select eligibility requirements. Fannie Mae will retain at least five percent of the underlying credit risk, corresponding to a vertical slice of each of the reference tranches, and will retain the full B-2H first-loss tranche. For 35 years, Fannie Mae has successfully shared credit risk with lender partners through the DUS program, which requires DUS lenders to retain a portion of credit risk on multifamily loans they deliver. In addition to our MCAS program, Fannie Mae continues to transfer mortgage credit risk through its MCIRT reinsurance program.

Fannie Mae priced Connecticut Avenue Securities (CAS) Series 2023-R08, an approximately $609 million note offering that represents Fannie Mae’s eighth CAS REMIC transaction of the year. CAS is Fannie Mae’s benchmark issuance program designed to share credit risk on its single-family conventional guaranty book of business. “Our final deal of 2023 was met with very strong demand, including new investor interest,” said Kathleen Pagliaro, Fannie Mae Vice President, Credit Risk Transfer. “We are pleased to close out another successful year, marking a decade since the launch of the CAS program.” The reference pool for CAS Series 2023-R08 consists of approximately 60,000 single-family mortgage loans with an outstanding unpaid principal balance of approximately $18.9 billion. The reference pool includes collateral with loan-to-value ratios of 60.01 percent to 80.00 percent, which were acquired between October 2022 and December 2022. The loans included in this transaction are fixed-rate, generally 30-year term, fully amortizing mortgages and were underwritten using rigorous credit standards and enhanced risk controls. With the completion of this transaction, Fannie Mae will have brought 61 CAS deals to market, issued over $64.5 billion in notes, and transferred a portion of the credit risk to private investors on over $2.1 trillion in single-family mortgage loans, measured at the time of the transaction. To promote transparency and to help credit investors evaluate securities and the CAS program, Fannie Mae provides ongoing, robust disclosure data, as well as access to news, resources, and analytics through its credit risk transfer webpages.

A Chrisman Christmas Poem, co-authored by Arizona’s Miguel Metz and Sancho, his Chat-GPT bot.

In a cozy home, by the fire’s warm hues,

Lived Rob Chrisman, writing mortgage industry news.

With papers stacked high and a pen in his hand,

He wrote about loans across the land.

Outside, snowflakes danced in the wintry air,

Inside, Myrtle purred without a care.

By Rob’s side, she napped on piles of reports,

Dreaming of mice in festive holiday forts.

“Another year’s end,” Rob mused with a shake of his head,

“Filled with mergers and closures, JPow and the Fed.

But the joy of this season makes it all bright,

Bringing hope and warmth, like a beacon of light.”

Myrtle stretched and yawned, eyes gleaming with cheer,

Whiskers twitching, sensing Christmas was near.

In the world of mortgages, things can be hectic,

But holiday spirit made it all quite majestic.

Under the tree, gifts were neatly arrayed,

For colleagues and friends, in festive parade.

With a nod to Myrtle, Rob made a wish,

For a new year of success, prosperity, and bliss.

So, here’s to the journey, through rates high and low,

With Myrtle, the cat, stealing the show.

In this season of giving, love, cheer, and fun,

Merry Christmas to Rob, from Fan #80,001.

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Rob Chrisman