Ginnie Mae: Program Overview and Insights. Puerto Rico 2018 MBA Conference

Transcription

1 Ginnie Mae: Program Overview and Insights Puerto Rico 2018 MBA Conference

2 GINNIE MAE Charter 1. Provide stability in the secondary market for residential mortgages. 2. Respond appropriately to the private capital market. 3. Provide ongoing assistance to the secondary market for residential mortgages by increasing the liquidity of mortgage investments and improving the distribution of investment capital available for residential mortgage financing. 4. Promote access to mortgage credit by increasing the liquidity of mortgage investments and improving the distribution of investment capital available for residential mortgage financing. 5. Manage and liquidate federally owned mortgage portfolios in an orderly manner, with minimum loss to the Federal Government.

3 GINNIE MAE: Growth in MBS Outstanding 2018 Total Remaining Pool Balance Trillions $2.0 $1.8 $1.6 $1.4 $1.2 $1.0 $0.8 $0.6 $ Ginnie Mae reaches $1.5 trillion mark Ginnie Mae reaches $1 trillion mark Ginnie Mae reaches $1.95 trillion mark $0.2 $0.0 Source: Office of Capital Markets 2

4 GINNIE ISSUERS: SHIFTING COUNTERPARTY PROFILES Support and Oversight of the institutions that issue and service Ginnie Mae securities, with an emphasis on avoiding the need to exercise the government guarantee. Shifting Market Dynamics 1. Rising Interest Rates 2. Volume declines In-Depth Risk Review Underway 1. Internal: reviewing processes, procedures and operational gaps, including flow of monthly P&I funds 2. External: detailed review of all issuers and Ginnie Mae s requirements and stress testing underway FY 2012 Issuance 76% 24% Shift from Banks to Nonbanks Banks Non-banks FY 2017 Issuance 25% 75% 3

5 HURRICANE MARIA: Ginnie Mae Support and Preparedness Chapter 34 of the Ginnie Mae MBS Guide provides 3 disaster relief programs for Ginnie Mae-designated disasters 1. Early Loan Buyout authority 2. Delinquency/Default Ratio assistance 3. P&I Pass-through assistance Ginnie Mae exercised all 3 of these programs in support of PR Issuers after Hurricane Maria From a preparedness perspective, Ginnie Mae developed a new disaster dashboard that provides for enhanced data analysis for current and future disasters. 4

6 Overview on Hurricane Maria Impact in PR as of April

7 Delinquency and Liquidation Trends in PR since Hurricane Maria in PR (from September 2017 to April 2018) 6

8 Impact of Maria Compared to Other Hurricanes (from September 2017 to April 2018) 7

9 Single Family Ginnie Mae Issuers with Loans in Puerto Rico as of April 2018 # Issuer ID Name Loans Located in PR RPB in State BANCO POPULAR DE PUERTO RICO 58,367 $5,414,499, BANCO POPULAR DE PUERTO RICO - (ACQUIRED FROM DORAL) 26,753 $2,048,563, SCOTIABANK DE PUERTO RICO 16,005 $1,806,961, FIRSTBANK PUERTO RICO 14,620 $1,644,702, ORIENTAL BANK 3,514 $421,200, THE MONEY HOUSE, INC. 3,844 $413,896, EMI EQUITY MORTGAGE, INC. 3,063 $342,164, BANCO SANTANDER PUERTO RICO 2,272 $269,880,023 9 All Other 14 Issuers with Loans in PR 3,062 $391,513,610 Single Family Loans and RPB Located in PR 131,500 $12,753,383,035 7 of the top 8 issuers located in PR only service loans on the island (99%) For the remaining 14 issuers with MBS portfolio in PR, the % of issuer RPB is as low as 0.05% 8

10 Single Family Ginnie Mae to Puerto Rico Comparison Ginnie Mae Vs. Puerto Rico Active Issuers Pooled Mortgages 10,864, ,521 Portfolio RPB ($B) $1,784.8 $12.8 CYTD Issuance ($B) $124 $0.37 Average Loan Size $164,275 $96,972 Ginnie I Concentration 10% 72% Average Loan Age 3.7 Years 6.0 Years 9 1 International Data Corporate Study

11 Single Family Ginnie Mae to Puerto Rico MBS Comparison Ginnie Mae Puerto Rico Depository Percentage 44% 93% 80% 60% 5 8 % 6 2 % Loan Profile 40% 20% 0% 3 7 % 33% Purchase Refi HAMP Non-HAMP 3% 3% 2% 2% 80% 60% 70% 61% Agency Profile 40% 20% 0% FHA VA RD PIH 11% 33% 19% 6 % 0 % 0 % Puerto Rico Ginnie Mae 10

12 Single Family Ginnie Mae to Puerto Rico MBS Comparison Ginnie Mae Puerto Rico Average Mortgage Rate 3.99% 4.35% 40% 35% 36% 30% Mortgage Rate Distribution 25% 20% 15% 16% 19% 26% 21% 21% 10% 10% 9% 5% 6% 5 % 5 % 5 % 5 % 5 % 2%2% 2 % 2 % 1% 1% 0% <=3 < = 3. 5 < = 4 < = 4. 5 < = 5 < = 5. 5 < = 6 < = 6. 5 < = 7 > 7 Puerto Rico Ginnie Mae 11

13 Single Family Ginnie Mae to Puerto Rico Comparison Ginnie Mae Vs. Puerto Rico 20% 15% 10% DQ3+ Trend 5% 0% Delinquencies and Foreclosures 10% 8% 6% 4% 2% 0% 8.77% 5.91% 4.06% 3.05% 0.83% 1.20% 1.11% DQ1 Only DQ2 Only DQ3+ Foreclosure 0.42% Puerto Rico Ginnie Mae 12

14 Puerto Rico Loss Mitigation Engagement Loan Count Loss Mitigations YTD 13

15 Total DQ Rate Historical Disaster Total DQ Rates Compared 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Months From Landfall K a t r i n a H a r v e y I r m a M a r i a 14

16 Single Family Ginnie Mae Compared to Puerto Rico Total DQ Rates Total DQ Rate 35% 30% 25% 20% 15% 10% 5% 0% Puerto Rico Ginnie Mae Total * * SF Ginnie Mae Total excludes Puerto Rico 15

17 Foreclosure Rate Puerto Rico Foreclosure Rates Have Remained Artificially Low The HUD foreclosure moratorium for properties impacted by Hurricane Maria will expire in August % 1.6% 1.5% 1.4% 1.3% HUD announces 6 month foreclosure moratorium for properties impacted by Hurricane Maria 1.2% Hurricane Maria makes landfall 1.1% 1.0% HUD extends foreclosure moratorium by 2 months Puerto Rico 16