The amount of Ginnie Mae
-held loans rolling from 60 days to 90 days delinquent slowed in the second quarter, after spiking last year. According to research from Credit Suisse
, this could signal slower involuntary prepayments going forward.
The Ginnie Mae share of agency fixed-rate issuance dropped to 33% in August, from 36% in July. Its total 30-year gross and net issuances in August were $28.8 billion and $22.7 billion respectively, both down from $31.4 billion and $15.2 billion in July.
Credit Suisse analysts believe Ginnie will continue to depress its share of agency fixed-rate issuance because of higher prepays and the Federal Housing Administration
annual premium hikes that begin in October.
Ginnie Mae prepayment speeds increased 10% in August but should begin to slow in November.
"Our November projections factor in the likely impact of an increase in the FHA upfront premium on prepay speeds based on a reduction in refi incentives," according to the report.
But some front-loading refinancing is occurring ahead of the premium increases, and "more dampening in prepay speeds than projected could occur starting in November."
Write to Jon Prior