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Goldman Sachs plants its flag in the jumbo-loan gold rush

Goldman Sachs has sponsored 18 private-label transactions so far in 2021, though one bond-rating firm questioned the use of automated underwriting on some of the jumbo loans
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Investment bank Goldman Sachs, through its affiliate Goldman Sachs Mortgage Co., has sponsored 18 private-label transactions so far in 2021 backed by more than 20,000 loans valued collectively at $9.9 billion, an analysis of bond-rating reports shows.

Goldman Sachs’ string of residential mortgage-backed securities (RMBS) offerings this year were dominated by a dozen prime jumbo-loan deals backed by loan pools valued at $7.7 billion. Securitizations in the prime jumbo space have been on a tear so far in 2021.

MAXEX, which operates a major loan-aggregating platform that serves the RMBS market, indicates that through October, the loan-pool value of prime jumbo private-label offerings stood at nearly $44 billion –which dwarfs 2020’s total — and executives with MAXEX expect the figure to easily exceed $50 billion by year’s end.

Michael Franco, CEO of SitusAMC, which provides due-diligence services to RMBS issuers, said market dynamics have played a major role in the dominance of jumbo-loan securitizations in the private-label market this year.

“The [private-label] market started coming back this year [after dropping off in 2020 due to the pandemic], and deals started getting done,” Franco said. “Home prices are rising, so there’s additional collateralization, and that makes people feel comfortable with residential risk in the search for yields. 

“So, you start seeing more appetite for private-label securities [this year, propelled by] factors in the market overall — higher securitization volumes aided by robust originations. … Also, home-price appreciation means more loans are falling into the jumbo loan category.”

The balance of Goldman Sachs’ private-label deals through November in 2021 involved primarily RMBS transactions backed by agency-eligible investment properties. Those deals were fueled, in large part, by changes in January to the preferred stock purchase agreements governing Fannie Mae and Freddie Mac. The key change was a cap placed on the agencies’ acquisition of mortgages secured by second homes and investment properties. 

The amendments to the PSPA, however, were suspended in September of this year and are now under review by FHFA. In the coming months, the effect of the rollback of that cap is expected to be felt in the private-label market. 

“As we move forward in the coming months, we expect to see this volume fall off as originators sell the majority of agency-eligible NOO [mortgages on nonowner-occupied homes] to Fannie Mae and Freddie Mac,” states a recent report by MAXEX, which operates a loan aggregation platform that serves lenders, including private-label issuers of jumbo-loan securitizations.

The explosive demand for and growth in the jumbo-loan market existing outside the agency space also has focused the attention of some bond-rating firms on the use of automated underwriting platforms in originating those loans — which are later packaged into RMBS deals. The move toward greater automation in the private market is being driven, in part, by record loan originations coupled with a shortage of underwriters in the industry available for loan-origination and private-label due-diligence reviews.

Bond-rating firm Moody’s Investor Service highlights three of Goldman Sachs deals that involved the use of automated underwriting systems (AUS). Two of the prime jumbo RMBS deals singled out by Moody’s involved loan originator United Wholesale Mortgage (UWM) and the third was a deal in which Movement Mortgage was the loan originator. In all three cases, Moody’s indicated it was increasing expected loss assumptions due to the lack of track record of AUS-underwritten jumbo loans.  

“We made an adjustment to our losses for loans originated by UWM primarily due to the fact that underwriting prime jumbo loans mainly through DU [Fannie Mae’s AUS] is fairly new, and no performance history has been provided to Moody’s on these types of loans,” Moody’s states in an October presale report reviewing a Goldman Sachs’ RMBS offering. “More time is needed to assess UWM’s ability to consistently produce high-quality prime jumbo residential mortgage loans under this program.”

A November Moody’s presale report reviewing a Goldman Sachs securitization involving Movement Mortgage as the loan originator states the following: 

“We concluded that these loans were fully documented loans, and that the underwriting of the loans is acceptable. Therefore, we ran these loans as ‘full documentation’ loans in our MILAN model but increased our … expected loss assumptions due to the lack of performance, track record and substantial overlays of the AUS-underwritten loans.”

Goldman Sachs did not reply to a request for comment.

Joseph Mayhew, chief credit officer at Evolve Mortgage Services, which provides due-diligence services for private-label RMBS deals, said both Fannie Mae’s AUS platform (Desktop Underwriter) — which was used by UWM and Movement Mortgage — as well as Freddie Mac’s AUS (Loan Prospector) are “good tools” with extensive data sets, however.

“Would you rather use a dataset [like Desktop Underwriter) that has… tens of millions of transactions every year, with up-to-date information in every possible market segment, or would you rather use a smaller data set that might be only for prime jumbo loans, but it’s got one-thirtieth of the data available to it that DU has?” Mayhew asked. “Now, I do think you have to use your common sense. 

“If you go up to $1.6 million to $1.7 million [for a jumbo mortgage], I think they [the agencies] have a pretty good data set for that. Now, if you’re talking about a super-jumbos in the $2 million to $5 million range, I think you have to draw a line and say maybe it’s not the best evaluation tool for those borrowers.”

The average loan balance in the pools for the three private-label deals highlighted by Moody’s was between $990,000 and $1 million, according to the bond-rating reports.

Time will tell whether using automated underwriting platforms developed by Fannie and Freddie to originate prime jumbo loans proves to be a great solution for the market or a future stumbling block. Regardless, the continuing imbalance between housing supply and demand, promises to keep upward pressure on home prices going forward, which is seen as a tailwind for the jumbo-loan market, according to executives at MAXEX.

“There is almost a three- or four-year lack of supply of new homes that exists out there, versus the demand from homeowners, and unless a new supply of homes comes online soon, these supply/demand dynamics could further drive housing prices up,” said MAXEX CEO Tom Pearce.

Adds Greg Richardson, chief commercial officer at MAXEX: “As loan sizes go up, we have the ability to put more and more production into these [jumbo-loan] products.”

As a headwind for the prime jumbo market, however, Keith Lind, executive chairman and president of non-QM player Acra Lending, points out that mortgage refinancing in 2022 is projected to be down by as much as 62% —according to an estimate from the Mortgage Bankers Association that assumes rates could reach 4% next year.

“The margins [for prime jumbo loans] are extremely thin after hedging and deal fees and everything else,” Lind said. “This all depends on how fast they move rates, but with those refinancings, the majority of that is prime jumbo and agency [mortgages.] 

“So, I think as rates rise, that market probably shrinks pretty fast.”

The post Goldman Sachs plants its flag in the jumbo-loan gold rush appeared first on HousingWire.

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Mike Pompeo Doesn’t Rule Out Serving In 2nd Trump Administration

Mike Pompeo Doesn’t Rule Out Serving In 2nd Trump Administration

Authored by Jack Phillips via The Epoch Times (emphasis ours),

Former Secretary…

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Mike Pompeo Doesn't Rule Out Serving In 2nd Trump Administration

Authored by Jack Phillips via The Epoch Times (emphasis ours),

Former Secretary of State Mike Pompeo said in a new interview that he’s not ruling out accepting a White House position if former President Donald Trump is reelected in November.

“If I get a chance to serve and think that I can make a difference ... I’m almost certainly going to say yes to that opportunity to try and deliver on behalf of the American people,” he told Fox News, when asked during a interview if he would work for President Trump again.

I’m confident President Trump will be looking for people who will faithfully execute what it is he asked them to do,” Mr. Pompeo said during the interview, which aired on March 8. “I think as a president, you should always want that from everyone.”

Then-President Donald Trump (C), then- Secretary of State Mike Pompeo (L), and then-Vice President Mike Pence, take a question during the daily briefing on the novel coronavirus at the White House in Washington on April 8, 2020. (Mandel Ngan/AFP via Getty Images)

He said that as a former secretary of state, “I certainly wanted my team to do what I was asking them to do and was enormously frustrated when I found that I couldn’t get them to do that.”

Mr. Pompeo, a former U.S. representative from Kansas, served as Central Intelligence Agency (CIA) director in the Trump administration from 2017 to 2018 before he was secretary of state from 2018 to 2021. After he left office, there was speculation that he could mount a Republican presidential bid in 2024, but announced that he wouldn’t be running.

President Trump hasn’t publicly commented about Mr. Pompeo’s remarks.

In 2023, amid speculation that he would make a run for the White House, Mr. Pompeo took a swipe at his former boss, telling Fox News at the time that “the Trump administration spent $6 trillion more than it took in, adding to the deficit.”

“That’s never the right direction for the country,” he said.

In a public appearance last year, Mr. Pompeo also appeared to take a shot at the 45th president by criticizing “celebrity leaders” when urging GOP voters to choose ahead of the 2024 election.

2024 Race

Mr. Pompeo’s interview comes as the former president was named the “presumptive nominee” by the Republican National Committee (RNC) last week after his last major Republican challenger, former South Carolina Gov. Nikki Haley, dropped out of the 2024 race after failing to secure enough delegates. President Trump won 14 out of 15 states on Super Tuesday, with only Vermont—which notably has an open primary—going for Ms. Haley, who served as President Trump’s U.S. ambassador to the United Nations.

On March 8, the RNC held a meeting in Houston during which committee members voted in favor of President Trump’s nomination.

“Congratulations to President Donald J. Trump on his huge primary victory!” the organization said in a statement last week. “I’d also like to congratulate Nikki Haley for running a hard-fought campaign and becoming the first woman to win a Republican presidential contest.”

Earlier this year, the former president criticized the idea of being named the presumptive nominee after reports suggested that the RNC would do so before the Super Tuesday contests and while Ms. Haley was still in the race.

Also on March 8, the RNC voted to name Trump-endorsed officials to head the organization. Michael Whatley, a North Carolina Republican, was elected the party’s new national chairman in a vote in Houston, and Lara Trump, the former president’s daughter-in-law, was voted in as co-chair.

“The RNC is going to be the vanguard of a movement that will work tirelessly every single day to elect our nominee, Donald J. Trump, as the 47th President of the United States,” Mr. Whatley told RNC members in a speech after being elected, replacing former chair Ronna McDaniel. Ms. Trump is expected to focus largely on fundraising and media appearances.

President Trump hasn’t signaled whom he would appoint to various federal agencies if he’s reelected in November. He also hasn’t said who his pick for a running mate would be, but has offered several suggestions in recent interviews.

In various interviews, the former president has mentioned Sen. Tim Scott (R-S.C.), Texas Gov. Greg Abbott, Rep. Elise Stefanik (R-N.Y.), Vivek Ramaswamy, Florida Gov. Ron DeSantis, and South Dakota Gov. Kristi Noem, among others.

Tyler Durden Wed, 03/13/2024 - 17:00

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International

Riley Gaines Explains How Women’s Sports Are Rigged To Promote The Trans Agenda

Riley Gaines Explains How Women’s Sports Are Rigged To Promote The Trans Agenda

Is there a light forming when it comes to the long, dark and…

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Riley Gaines Explains How Women's Sports Are Rigged To Promote The Trans Agenda

Is there a light forming when it comes to the long, dark and bewildering tunnel of social justice cultism?  Global events have been so frenetic that many people might not remember, but only a couple years ago Big Tech companies and numerous governments were openly aligned in favor of mass censorship.  Not just to prevent the public from investigating the facts surrounding the pandemic farce, but to silence anyone questioning the validity of woke concepts like trans ideology. 

From 2020-2022 was the closest the west has come in a long time to a complete erasure of freedom of speech.  Even today there are still countries and Europe and places like Canada or Australia that are charging forward with draconian speech laws.  The phrase "radical speech" is starting to circulate within pro-censorship circles in reference to any platform where people are allowed to talk critically.  What is radical speech?  Basically, it's any discussion that runs contrary to the beliefs of the political left.

Open hatred of moderate or conservative ideals is perfectly acceptable, but don't ever shine a negative light on woke activism, or you might be a terrorist.

Riley Gaines has experienced this double standard first hand.  She was even assaulted and taken hostage at an event in 2023 at San Francisco State University when leftists protester tried to trap her in a room and demanded she "pay them to let her go."  Campus police allegedly witnessed the incident but charges were never filed and surveillance footage from the college was never released.  

It's probably the last thing a champion female swimmer ever expects, but her head-on collision with the trans movement and the institutional conspiracy to push it on the public forced her to become a counter-culture voice of reason rather than just an athlete.

For years the independent media argued that no matter how much we expose the insanity of men posing as women to compete and dominate women's sports, nothing will really change until the real female athletes speak up and fight back.  Riley Gaines and those like her represent that necessary rebellion and a desperately needed return to common sense and reason.

In a recent interview on the Joe Rogan Podcast, Gaines related some interesting information on the inner workings of the NCAA and the subversive schemes surrounding trans athletes.  Not only were women participants essentially strong-armed by colleges and officials into quietly going along with the program, there was also a concerted propaganda effort.  Competition ceremonies were rigged as vehicles for promoting trans athletes over everyone else. 

The bottom line?  The competitions didn't matter.  The real women and their achievements didn't matter.  The only thing that mattered to officials were the photo ops; dudes pretending to be chicks posing with awards for the gushing corporate media.  The agenda took precedence.

Lia Thomas, formerly known as William Thomas, was more than an activist invading female sports, he was also apparently a science project fostered and protected by the athletic establishment.  It's important to understand that the political left does not care about female athletes.  They do not care about women's sports.  They don't care about the integrity of the environments they co-opt.  Their only goal is to identify viable platforms with social impact and take control of them.  Women's sports are seen as a vehicle for public indoctrination, nothing more.

The reasons why they covet women's sports are varied, but a primary motive is the desire to assert the fallacy that men and women are "the same" psychologically as well as physically.  They want the deconstruction of biological sex and identity as nothing more than "social constructs" subject to personal preference.  If they can destroy what it means to be a man or a woman, they can destroy the very foundations of relationships, families and even procreation.  

For now it seems as though the trans agenda is hitting a wall with much of the public aware of it and less afraid to criticize it.  Social media companies might be able to silence some people, but they can't silence everyone.  However, there is still a significant threat as the movement continues to target children through the public education system and women's sports are not out of the woods yet.   

The ultimate solution is for women athletes around the world to organize and widely refuse to participate in any competitions in which biological men are allowed.  The only way to save women's sports is for women to be willing to end them, at least until institutions that put doctrine ahead of logic are made irrelevant.          

Tyler Durden Wed, 03/13/2024 - 17:20

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Part 1: Current State of the Housing Market; Overview for mid-March 2024

Today, in the Calculated Risk Real Estate Newsletter: Part 1: Current State of the Housing Market; Overview for mid-March 2024
A brief excerpt: This 2-part overview for mid-March provides a snapshot of the current housing market.

I always like to star…

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Today, in the Calculated Risk Real Estate Newsletter: Part 1: Current State of the Housing Market; Overview for mid-March 2024

A brief excerpt:
This 2-part overview for mid-March provides a snapshot of the current housing market.

I always like to start with inventory, since inventory usually tells the tale!
...
Here is a graph of new listing from Realtor.com’s February 2024 Monthly Housing Market Trends Report showing new listings were up 11.3% year-over-year in February. This is still well below pre-pandemic levels. From Realtor.com:

However, providing a boost to overall inventory, sellers turned out in higher numbers this February as newly listed homes were 11.3% above last year’s levels. This marked the fourth month of increasing listing activity after a 17-month streak of decline.
Note the seasonality for new listings. December and January are seasonally the weakest months of the year for new listings, followed by February and November. New listings will be up year-over-year in 2024, but we will have to wait for the March and April data to see how close new listings are to normal levels.

There are always people that need to sell due to the so-called 3 D’s: Death, Divorce, and Disease. Also, in certain times, some homeowners will need to sell due to unemployment or excessive debt (neither is much of an issue right now).

And there are homeowners who want to sell for a number of reasons: upsizing (more babies), downsizing, moving for a new job, or moving to a nicer home or location (move-up buyers). It is some of the “want to sell” group that has been locked in with the golden handcuffs over the last couple of years, since it is financially difficult to move when your current mortgage rate is around 3%, and your new mortgage rate will be in the 6 1/2% to 7% range.

But time is a factor for this “want to sell” group, and eventually some of them will take the plunge. That is probably why we are seeing more new listings now.
There is much more in the article.

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