• HOME
  • solutions
    • RECURSION ANALYZERS
    • Agency XRay
    • Mortgage Company Data
    • Recursion DataCloud
    • Customized Solutions
  • BLOG
  • CLIENT LOGIN
    • Agency XRAY
    • Recursion Analyzers
  • ABOUT US
    • OVERVIEW
    • OUR TEAM
    • Recursion In News
    • STRATEGIC PARTNER
  • CONTACT
RECURSION CO
  • HOME
  • solutions
    • RECURSION ANALYZERS
    • Agency XRay
    • Mortgage Company Data
    • Recursion DataCloud
    • Customized Solutions
  • BLOG
  • CLIENT LOGIN
    • Agency XRAY
    • Recursion Analyzers
  • ABOUT US
    • OVERVIEW
    • OUR TEAM
    • Recursion In News
    • STRATEGIC PARTNER
  • CONTACT
BLOG

Refi Roller Coaster

12/10/2020

 
For some time, we have been talking about the key driver of mortgage performance is policy rather than fundamentals. This theme is certainly evident with the release of agency prepayment data for November[1]. The chart below chart displays the gap between the 1M prepayment speeds between Ginnie Mae and GSE securities:
Picture
Run Underlying Query
What stands out the most in this chart is the sudden burst of volatility in this figure which began at the start of 2020. A key factor behind the pickup in conforming speeds relative to Government programs at the beginning of the year was the growing popularity of property inspection wavers:
Picture
Run Underlying Query
Use of these waivers accelerated starting in March as the onset of the Covid-19 pandemic dissuaded the use of on-site property inspections.

There are, however, distinct policy actions that have had an impact of prepayments:
  1. June 2020: Change in the Ginnie Mae pool rule regarding resecuritization of loans bought out of Ginnie Mae securities. (Short-term positive for Ginnie Speeds vs GSE speeds)[2]
  2. September 2020 Fannie Mae and Freddie Mac announce imposition of 0.5% fee on deliveries of refinance loans to the GSEs commencing December 1. (Short term positive for GSE speeds relative to GNM speeds).[3]

Interestingly, the speed gap in November at 3 bps is very much in the center of the range in evidence for much of 2018 and 2019, so the roller coaster has returned to its home base. Looking out to 2021, there is ample scope for another ride given the potential for volatility around such issues as GSE reform and the disposition of loans once forbearance expires.

[1] https://www.recursionco.com/blog/policy-primacy
[2] https://www.ginniemae.gov/issuers/program_guidelines/Pages/mbsguideapmslibdisppage.aspx?ParamID=109
[3] https://www.housingwire.com/articles/fhfa-delays-refinance-fee-start-date-to-dec-1/

    Archives

    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    May 2019
    March 2019
    February 2019

    Tags

    All
    Banking
    CMBS
    Cohort Analyzer
    COVID 19
    CRT Analyzer
    EBO
    Fed Policy
    FHA
    Forbearance
    Ginnie Mae
    GSE
    HECM Analyzer
    HMDA Analyzer
    Mortgage Market
    Pool Level Analyzer
    Prepayment
    Recursion Achievement
    Recursion In News
    Reverse Mortgage
    Risk
    Team Building
    UMBS
    Underwriting

RECURSION

SOLUTIONS ​
Recursion Analyzers
​Agency XRay
​
Mortgage Company Data
Recursion DataCloud
Customized Solutions


ABOUT US  ​
Overview
​Our team
​Strategic Partner
CLIENT LOGIN   ​
Recursion Analyzers
​
Agency XRay

CONTACT

224 West 30th St., Suite 303, New York, NY 10001
Contact Us

Picture
Copyright © 2020 Recursion, Co. All rights reserved.​
  • HOME
  • solutions
    • RECURSION ANALYZERS
    • Agency XRay
    • Mortgage Company Data
    • Recursion DataCloud
    • Customized Solutions
  • BLOG
  • CLIENT LOGIN
    • Agency XRAY
    • Recursion Analyzers
  • ABOUT US
    • OVERVIEW
    • OUR TEAM
    • Recursion In News
    • STRATEGIC PARTNER
  • CONTACT