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Volume 15 - Number 6

March 13, 2015

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GSE Market Share Hits Post-Conservatorship Low in 4Q14

For the first time since the GSEs were put in government conservatorship over six years ago, the flow of new mortgages sold to Fannie Mae and Freddie Mac accounted for less than half of primary-market production. [Includes one chart.]

Officials Say GSE Risk-Sharing Needs to Keep Evolving

Although the Federal Housing Finance Agency has tripled the targets for GSE risk transfers in 2015, Treasury officials say the program needs to evolve further and offered a number of new strategies to consider.

‘Bifurcation’ Agreements with GSEs At Heart of Ocwen’s MSR Sales

Ocwen Financial’s goal to eventually unload $140.5 billion of mortgage servicing rights tied to Fannie Mae/Freddie Mac loans is being aided by bifurcation agreements approved by the GSEs and their regulator, according to advisors familiar with the deals.

Details on Fannie’s Future Move to New Headquarters

After four decades in its storied Wisconsin Avenue building, Fannie Mae plans to return to its much earlier roots by making downtown Washington, DC, its new corporate headquarters. The company selected the current site of The Washington Post, on 1150 15th Street, NW, as its future home in January, debunking speculations of a move to other parts of the city.

Flood of Seasoned Loans Boosts Freddie MBS Issuance in February

Freddie Mac saw an unusual jump in mortgage-backed securities issuance in February thanks to a huge delivery of seasoned loans from Bank of America. Freddie single-family MBS production rose 30.8 percent from January’s level to $29.91 billion, according to a new Inside The GSEs analysis of loan-level data. It was the highest monthly issuance level for Freddie since August 2013. [Includes one chart.]

Nomura Bucks the Norm, Goes to Trial on RMBS Suits With FHFA

While most of the 18 financial institutions sued by the Federal Housing Finance Agency in 2011 have settled allegations of securities law violations, underwriting flaws and fraud related to non-agency mortgage-based securities, one bank, Nomura Holding America Inc., plans to take the case all the way to trial.

Treasury and FHFA Differ on CSP Development Strategy

The development of the common securitization platform is in the works, but Treasury officials have a slightly different view of its implementation than does the Federal Housing Finance Agency. The FHFA said although progress on building the CSP is continuing, the agency is most focused on moving toward a single security. FHFA Director Mel Watt noted that both of the initiatives are “highly interrelated,” but he made it clear that a single security for the GSEs is a priority for Fannie Mae and Freddie Mac in 2015.

CHLA Urges Delay in Raising Servicer Net Worth Standard

The Community Home Lenders Association last week said that more investigation is needed before the Federal Housing Finance Agency finalizes its proposed increase in capital and liquidity requirements for Fannie Mae and Freddie Mac servicers.

GOP Lawmaker Sides With GSE Investors on Profit Sweep

Pennsylvania’s Senator Pat Toomey said the Third Amendment to the terms of the GSE conservatorship is not fair to Fannie and Freddie investors. By claiming all future GSE profits, the Republican lawmaker said, the Treasury effectively eliminated all remaining shareholder value.

Lender Group Presses FHFA To Lower GSE Guaranty Fees

High GSE guarantee fees should be lowered because market risks have lessened significantly since the housing market crisis, according to the Community Mortgage Lenders of America. A 25 basis points adverse market fee was imposed when excessive levels of housing inventory and declining values were commonplace in many U.S. housing markets, said CMLA Chair Paulina McGrath.

FHFA Issues Guidelines to Spur Sales of GSE Distressed Loans

Fannie Mae and Freddie Mac held $54 billion mortgages more than a year past due as of the end of the third quarter of 2014 and the Federal Housing and Finance Agency is counting on selling more nonperforming loans to the private sector.

OIG Cites Flawed Process in Fannie’s CAE Selection

In a March 11 report, the Office of Inspector General scrutinized Fannie Mae’s appointment of its chief audit executive. The report highlights “risks” associated with the October 2013 candidate selection. The CAE is responsible for directing Fannie’s internal audit department, a critical element of Fannie’s risk management controls, according to the report.

Poll

With the recent dip in interest rates, how do you feel about loan volumes this year?

We see loan production ending 2015 flat compared to 2014.

36%

We’re optimistic that our originations will rise by 10 to 20 percent year over year.

44%

We’re really optimistic: We expect production to increase by 20 percent or better from last year.

12%

We’re not so bullish. Originations for us may actually fall.

8%

Housing Pulse