Agency MBS
Browse articles from all of our Newsletters related to Agency MBS.
May 18, 2012 - Inside The GSEs
Fired Fannie Staffer to Press Lawsuit Despite Ruling
Fannie Mae received a leg up earlier this month in its defense against a former staffer’s wrongful termination lawsuit when a federal judge ruled that the GSE is not legally considered a government entity while under the conservatorship of its regulator, the Federal Housing Finance Agency. Caroline Herron, a former Fannie vice president who left in 2007 but returned as a consultant in 2009, filed suit against the GSE in June 2010. Herron claims she was wrongly fired for reporting what she said was Fannie’s mismanagement of the Obama administration’s housing rescue initiatives. According to papers filed in U.S. District Court for the District of Columbia, Herron sought to prove that Fannie was not a private company but an adjunct of the state while under FHFA conservatorship as part of her claim against Fannie. Herron asserted a Bivens claim, a claim under the First Amendment for private damages against federal officials for civil rights violations outside the purview of the Federal Tort Claims Act.
May 18, 2012 - Inside The GSEs
FHFA Issues Draft Strategic Plan for Public Comment
The Federal Housing Finance Agency is requesting public comment on its draft document Strategic Plan: Fiscal Years 2013-2017. The FHFA said it’s updating its plan in order to incorporate the strategic plan for conservatorships of Fannie Mae and Freddie Mac that the Finance Agency sent to Congress in February.
May 18, 2012 - Inside The GSEs
FHFA Bank MBS Lawsuits Survive Dismissal Motion
Look for the Federal Housing Finance Agency to press its multiple legal actions against many of the nation’s biggest issuers of non-agency mortgage-backed securities after a federal judge rejected a bid by UBS Americas to turn back the FHFA’s lawsuit over its sale of non-agency MBS to Fannie Mae and Freddie Mac. Judge Denise Cote, of the U.S. District Court for the Southern District of New York, two weeks ago denied UBS’ motion to dismiss on statute of limitations grounds, while dismissing the FHFA’s negligent misrepresentation claims. The FHFA, as GSE conservator, sued UBS in July 2011 alleging that billions of dollars of MBS purchased by Fannie and Freddie were based on offering documents that contained “materially false statements and omissions.”
May 18, 2012 - Inside The GSEs
FHFA Notes Modest Goals For REO-to-Rental Pilot
Investors will be able to bid on Fannie Mae real estate-owned single-family homes intended for rent “in the next few months” but the Federal Housing Finance Agency warns not to expect fire sale prices from its pilot program. FHFA Senior Associate Director for Housing and Regulatory Policy Meg Burns testified last week before a congressional field hearing that the agency is completing its review of investor applications and is on target to complete its first pilot transaction in the next few months. “The application process is comprehensive, rigorous and demanding, requiring exhaustive amounts of information and documentation from the applications and their business partners,” said Burns.
May 18, 2012 - Inside The GSEs
Obama Pushes Trio of Senate HARP Expansion Bills
The White House is backing a trio of Senate bills filed last week to expand the Home Affordable Refinance Program to an even wider circle of underwater borrowers as part of the Obama administration’s re-election “to-do list.” The Equity Rebuilding Act sponsored by Sen. Jeff Merkley, D-OR, would lower costs for some homeowners seeking to refinance through HARP. Under the bill, homeowners who are current on their mortgage seeking to refi into a 20-year loan term or shorter would have their closing costs covered by Fannie and Freddie. A second bill by Sen. Dianne Feinstein, D-CA, the Expanding Refinancing Opportunities Act of 2012, would create a $6 billion FHA fund to provide insurance for underwater homeowners who currently don’t have a federally backed loan. To pay for the FHA extension, Feinstein would extend by one year the temporary, 10-year, 10 basis point increase of the GSE guarantee fee that took effect April 1.
May 18, 2012 - Inside The GSEs
Fannie, Freddie Market Share Rises in 1Q12
Both Fannie Mae and Freddie Mac held onto their ample shares of mortgage-backed securities with something of a bump during the first quarter of 2012, according to a new Inside The GSEs analysis. The GSEs issued a combined $303.9 billion in MBS during the first quarter, a 13.9 percent increase from the fourth quarter of 2011. Compared to the first quarter of last year, Fannie and Freddie saw a 16.4 percent increase in MBS issuance. Between the two companies, Fannie and Freddie registered a plentiful 77.9 percent share of new MBS during the period that ended March 31, 2012, up from 77.1 percent the two companies held during the fourth quarter of 2011 and much farther apart from the 74.8 percent both GSEs held during the first quarter of 2011.
May 18, 2012 - Inside The GSEs
Delaware County Finds GSEs Not Exempt From Transfer Taxes
Real estate transactions in New Castle County, DE, will no longer be exempt from transfer tax as a conveyance from a governmental entity, following a new ruling from the county’s legal counsel.The New Castle county law department found that Fannie and Freddie are federally chartered private corporations and not governmental agencies. The county’s revised interpretation of the realty transfer tax statute earlier this month, “consistent with the growing practice in other jurisdictions,” has prompted the county to enforce the distinction starting in June.
May 18, 2012 - Inside The GSEs
Freddie’s New CEO Busts FHFA New Salary ‘Cap’
Freddie Mac’s new chief executive is expected to have his work cut out for him when he takes possession of the company’s corner office starting next week, industry insiders say, as it remains to be seen how much of a change agent anyone serving as CEO under government conservatorship can be. Last week, Freddie’s board of directors announced, with Federal Housing Finance Agency consent, the appointment of Donald Layton as CEO and elected him a member of the board.
May 18, 2012 - Inside The GSEs
Fannie Profits, Freddie Loses in 1Q12
The two GSEs divulged not so wildly divergent earnings during the first quarter of 2012. Fannie Mae posted its first free-and-clear profit since being drafted into government conservatorship some 3½ years ago while Freddie’s positive net income wasn’t enough to honor its dividend obligation and it was forced to ask taxpayers for further fiscal life-support. One year after it posted a $6.5 billion net loss, Fannie reported $2.7 billion net income during the first quarter, following to a net loss of $2.4 billion in the fourth quarter of 2011. Freddie actually reported net income in the first quarter and the fourth quarter, $577 million and $619 million respectively, but not enough to repay $1.8 billion in preferred stock dividends for the first three months of 2012.
May 17, 2012 - Inside Mortgage Finance
Fannie, Freddie Report First Quarter REO Inventory Decline; FHFA Lowers Expectations on Rental Pilot
A decline in Fannie Mae’s inventory of single-family real estate owned homes coupled with improved REO sale prices played a significant role in the company’s first free-and-clear profit since going into government conservatorship. Freddie Mac also reported improved REO disposition activity during the first quarter of 2012. Fannie said it acquired 47,700 single-family properties during the first quarter compared to 47,256 in the fourth quarter of 2011 and 53,549 in the first quarter of 2011. The government-sponsored enterprise disposed of 52,071 single-family REO during the first three months of 2012...
May 17, 2012 - Mortgage Beat
Freddie Hires a New Chief Executive Officer and Other Things Affecting the GSEs
For this week’s issue of Inside The GSEs, we will field insider reactions to last week’s selection of former E*Trade CEO Donald Layton as Freddie Mac’s new chief executive, capping a nearly six-month search process. Layton replaces outgoing CEO Charles Haldeman, who came...
May 11, 2012 - Inside FHA Lending
Genworth Mortgage Insurance has named Martin Klein as acting chief executive officer in the wake of former CEO Michael Frazier’s resignation last week. Klein is and remains the company’s chief financial officer. James Riepe was named nonexecutive chairman of the board. NMI Holdings, Inc., has raised $550 million in a private placement to provide mortgage insurance on loans to Fannie Mae and Freddie Mac. The company is in the process of obtaining approvals from state insurance regulators and the two government-sponsored enterprises. The MI unit will be called ...
May 11, 2012 - Inside FHA Lending
Independent Lenders Fill Void in MetLife's Wake
Home Equity Conversion Mortgage loans remain widely available, thanks to the independent lenders that rallied to plug the gaps as major players bolted from the reverse mortgage market, an industry executive told lawmakers this week. In testimony during a House subcommittee hearing on FHA regulation of the HECM market, Jeffrey Lewis, CEO of Generation Mortgage Co., said MetLife’s departure from the market and closure of its traditional mortgage-origination business say nothing about the value of the HECM product to consumers. Lewis said MetLife’s decision was a strategic one and had nothing to do with ... (1 chart)
May 11, 2012 - Inside FHA Lending
Ginnie Mae Requires New SF Data Disclosures
Ginnie Mae has announced new data disclosures effective Sept. 1, but investors say it is information they do not need. These include indicators identifying first-time homebuyers, type of third-party originator, and the upfront and annual mortgage insurance premiums. The new disclosures will provide greater transparency on the collateral that backs Ginnie Mae mortgage-backed securities, the agency explained in its latest guidance to program participants. The move also aligns Ginnie Mae’s data disclosures with the industry, it added. Issuers that are unable initially to provide the data will ...
May 11, 2012 - Inside MBS & ABS
GSEs Focused on HARP, New MBS Platform; Ginnie Mae Copes With New Issuer Demand
Fannie Mae and Freddie Mac reported robust activity in their expanded refinance programs for underwater borrowers, while Ginnie Mae is looking at new procedures to identify the potential new issuers that are most likely to become strong participants in its program. Freddie officials are very focused on the expanded Home Affordable Refinance Program, said Paul Mullings, senior VP for single-family sourcing at the government-sponsored enterprise. He told attendees at the Mortgage Bankers Association National Secondary Market Conference in New York this week that HARP now accounts for 26 percent of the refi loan...
May 10, 2012 - Inside Mortgage Finance
Fannie Mae posted a profit large enough to cover its government dividend payment for the first quarter of 2012, while Freddie Mac came up a little short and had to ask the government for an additional $19 million to remain solvent. Fannie reported $2.7 billion in net income during the first quarter, compared to a net loss of $2.4 billion in the fourth quarter of 2011 and a net loss of $6.5 billion in the first quarter of 2011. The company credited its better results to lower credit-related expenses, resulting from a less significant decline in home prices, a decline in the company’s inventory of real estate...
May 10, 2012 - Mortgage Beat
Federal Court Finds Fannie Not a Government Entity in Firing Lawsuit
Fannie Mae received a leg up last week in its defense against a former staffer’s wrongful termination lawsuit when a federal judge ruled that the GSE is not legally considered a government entity while under the conservatorship of its regulator, the Federal Housing Finance Agency...
May 9, 2012 - Mortgage Beat
Donovan Urges Congress to Tear Down Barriers to Refinancing
Department of Housing and Urban Development Secretary Shaun Donovan this week urged Congress to pass legislation to make it easier for responsible owners who are current on their payments to refinance. Testifying before the Senate Committee on Banking, Housing and Urban...
May 8, 2012 - Mortgage Beat
MBA Advocates Matching GSE Rates
New York City – Mortgage Bankers Association President David Stevens this week at the MBA’s National Secondary Market Conference and Expo advocated for a change to Freddie Mac’s remittance cycle that would allow the two government-sponsored enterprises to be pooled together...
May 4, 2012 - Inside The GSEs
Senate Democrats Propose HARP 3.0 Legislation
Senate Democrats are drafting legislation to force Fannie Mae and Freddie Mac to expand the Home Affordable Refinance Program for underwater borrowers even farther beyond the newly unveiled HARP 2.0. The draft legislation by Sens. Robert Menendez, D-NJ, and Barbara Boxer, D-CA, unveiled last week during a subcommittee hearing would force the GSEs to waive representations and warranties on new HARP loans regardless of whether the refi lender serviced the previous mortgage.
May 4, 2012 - Inside The GSEs
Group Eying GSE Lenders for Disparate Impact Signs
A national consumer advocacy group, whose own investigation of FHA credit overlays spurred a federal probe of nearly two dozen FHA lenders, said it is keeping an eye on Fannie Mae’s and Freddie Mac’s use of loan-level price adjusters as a potential discriminatory lending practice. The National Community Reinvestment Coalition said it’s still waiting to hear from the Department of Housing and Urban Development about the results of multiple investigations HUD launched in December 2010 after NCRC found that 22 lenders set borrower credit scores as high as 640 for FHA loans, even though the FHA guarantees loans with scores as low as 580.
May 4, 2012 - Inside The GSEs
Fannie Asserts Right to Change Contract Terms
Fannie Mae announced this week it can change pricing and other terms under purchase agreements and mortgage-backed securities contracts with lenders should the GSE deem it necessary. According to the alert to servicers, Fannie is asserting its right to change pricing terms under standard purchase agreements, master agreements or mortgage securitization contracts. For any contracts and agreements entered into on or after May 1, Fannie said it reserves the right to change pricing “one or more times” during the term. Such changes may include the base guaranty fee, loan-level price adjustments and guaranty-fee adjustments on mortgages delivered under mortgage-backed securities contracts or as whole loans.
May 4, 2012 - Inside The GSEs
Freddie Cites Turnover ‘Risk’ as Another Exec Bails
The GSE executive exodus continued last week with the announcement that the executive who oversees Freddie Mac’s single-family mortgage business has resigned. Anthony Renzi, Freddie’s executive vice president of single-family business, operations and information technology, will leave the company effective May 11, according to a filing with the Securities and Exchange Commission. Renzi, who came to Freddie after being forced out of GMAC Mortgage in April 2010, will join Citigroup Inc. as its new chief operating officer. The company said Paul Mullings, senior vice president of single-family sourcing and securitization, will take over Renzi’s duties on an interim basis.
May 4, 2012 - Inside The GSEs
Freddie Dividends Turn Black to Red in 1Q
Dividend payments paid by Freddie Mac to the U.S. Treasury for its continued financial support held down the GSE during the first quarter of 2012 as Freddie would have otherwise posted a profit. Freddie, which posted its first quarter results late this week, actually reported $577 million in net income during the first three months of this year before having to repay $1.8 billion in preferred stock dividends to the government. Under the terms of the GSEs’ purchase agreement, the Treasury is entitled to a dividend of 10 percent per year on a quarterly basis. Freddie’s first quarter dividend payment more than offset the company’s comprehensive income of $1.79 billion, prompting the GSE to seek another $19 million from taxpayers.
May 4, 2012 - Inside The GSEs
FHFA Feud Over GSE Writedowns Intensifies
The Federal Housing Finance Agency is still mulling over accepting principal reduction payments from the Treasury Department even as the debate between the factions for and against GSE loan writedowns is quickly dissolving into a partisan food fight. This week, two ranking House Republicans urged FHFA Acting Director Edward DeMarco to stand fast against mounting political pressure directed at him by the Congressional allies of the Obama administration as House Democrats took the gloves off, accusing the Finance Agency of falsely withholding pertinent information about the agency’s principal reduction analysis.
May 4, 2012 - Inside MBS & ABS
Revamped HARP Inspires Fannie Direct Marketing ‘Outreach’ to Spur More Lender Refi Business
In an effort to aggressively expand the recently retooled Home Affordable Refinance Program, Fannie Mae is encouraging lenders to make the most of HARP 2.0’s looser rules on marketing directly to eligible borrowers. The government-sponsored enterprise created “outreach materials” to help jump-start lenders’ marketing efforts to would-be borrowers who aren’t aware they may qualify for a HARP refinance. “Fannie Mae developed these model ‘HARP Materials’ to facilitate borrower consideration of HARP refinancing options that may be available through participating lenders and servicers...
May 2, 2012 - Mortgage Beat
Fannie Mae Announces Changes to Pricing Terms
Fannie Mae is asserting its right to change pricing terms under standard purchase agreements, master agreements or mortgage securitization contracts, according to an alert issued on May 1. The government-sponsored enterprise made clear its right to change the pricing...
April 27, 2012 - Inside FHA Lending
Ginnie Mae Servicers Off to Good Start in 1Q12
Combined servicing volume for the top 50 Ginnie Mae MBS servicers jumped to $1.23 billion in the first quarter of 2012 from $1.11 billion during the same period a year ago – an 11.2 percent increase on a year-over-year basis, according to the Inside Mortgage Finance MBS Database. The quarterly change was a modest 1.7 percent increase from $1.21 billion in the fourth quarter of 2011, data showed. Wells Fargo and Bank of America accounted for 53.5 percent of total Ginnie Mae servicing in the first quarter, with $361.1 million and $302.1 million, respectively. Year-over-year, top-ranked Wells Fargo (29.1 percent market share) saw a ... (1 chart)
April 27, 2012 - Inside FHA Lending
GOP FHA Bill has $11 Million Implementation Tag
Implementing proposed legislation aimed at improving the safety and soundness of the FHA single-family program would cost taxpayers $11 million over a four-year period if the bill is enacted in late 2012 and the necessary amounts are appropriated each year, according to the Congressional Budget Office. In an analysis of H.R. 4264, the FHA Emergency Fiscal Solvency Act of 2012, the CBO estimated that $9 million would be spent on mandatory actuarial studies on the health of the FHA Mutual Mortgage Insurance Fund and $2 million for other costs over the 2013-2017 period. The legislation would not affect direct spending or revenues and, therefore ...
April 26, 2012 - Mortgage Beat
FHFA REO Pilot Extension Deadline Extended?
Overwhelmed by as many as 400 private bidders vying to participate, the Federal Housing Finance Agency has reportedly extended the deadline for bids by one month. A HousingWire article recently reported that investors will now have until May to bid on the 2,490 foreclosed...
April 20, 2012 - Inside The GSEs
GSEs Pay Chicago Fee ‘Under Protest’
Fannie Mae and Freddie Mac have reluctantly directed their servicers to begin making payments next month in compliance with Chicago’s vacant property ordinance “under protest” as the GSEs’ conservator continues to fight the local legislation in court. Starting May 1, Fannie servicers will be required to include a written protest along with the ordinance’s $500 registration fee, according to a letter to servicers issued earlier this month. “All payments made to the city of Chicago, including vacant property registration payments, must be made ‘under protest’ by sending a written communication to the city with the registration fee,” explained Fannie. “This written communication must note that the Federal Housing Finance Agency determined that the registration fee does not apply to Fannie Mae, and that the registration fee is therefore paid under protest.”
April 20, 2012 - Inside The GSEs
Senator Asks FHFA For ‘Clear’ GSE Repurchase Process
The Federal Housing Finance Agency should give consideration to creating a mechanism to allow small mortgage lenders to more easily appeal GSE repurchase demands, according to one U.S. senator.In a letter sent last week to FHFA Acting Director Edward DeMarco, Sen. Jeanne Shaheen, D-NH, said several of her small-business constituents have noted a “sharp increase” in repurchase demands over the last year.
April 20, 2012 - Inside The GSEs
MBA Asks Fannie to Delay ‘Force-Placed’ Deadline
The Mortgage Bankers Association has asked Fannie Mae to push back its June 1 implementation deadline of the GSE’s new requirements for lender “force-placed” insurance policies to allow time for the creation of a “workable timeline” for compliance. Last month, Fannie announced it would implement changes to its Lender-Placed Insurance requirements by overseeing the force-placed polices itself instead of allowing banks and other financial institutions to do so.
April 20, 2012 - Inside The GSEs
FHLBanks Weigh In Against PACE Rule
The front-of-the-line priority status granted to participants of the Property Assessed Clean Energy home loan programs under the Federal Housing Finance Agency’s proposed rule could have wide-ranging and unintended consequences for the Federal Home Loan Banks, according to Bank officials. The FHFA received more than 400 comment letters late last month – including two from the FHLBanks of Indianapolis and New York – roughly split for and against implementation of the proposed “green” lending program.
April 20, 2012 - Inside The GSEs
Increase In HARP 2.0 Applications Boosts Banks’ Short-Term Income
Lenders should expect at least a short-term boost in profits from the Federal Housing Finance Agency’s recent tweaks to the Home Affordable Refinance Program, analysts say as the industry’s largest lenders have seen a big increase in new refinance applications for HARP 2.0. In its first-quarter earnings report issued last week, Chase cited the impact of HARP in part for generating $1.6 billion in mortgage production revenue, an 80 percent increase from a year earlier. Likewise, Wells reported first-quarter mortgage originations to be up $9 billion from the fourth quarter of 2011, with 15 percent of originations credited to HARP, while application volumes rose 20 percent during the same period.
April 20, 2012 - Inside The GSEs
FHFA: GSEs Draw Less From Taxpayers Than Projected
Fannie Mae and Freddie Mac’s combined cash infusion from taxpayers during the latter half of 2011 came in significantly below estimates forecast by the GSEs’ conservator, according to a new report. The Federal Housing Finance Agency’s fourth-quarter conservatorship report noted that Fannie and Freddie’s actual combined draw during the second half of last year was $19 billion, some $10 billion below the Finance Agency’s most optimistic projections issued last fall. In October, the FHFA circulated its updated projections of the financial performance of the GSEs, including potential draws under the Senior Preferred Stock Purchase Agreements with the Treasury Department.
April 20, 2012 - Inside The GSEs
GSE MBS Business Surges in 1Q 2012 Due to Refi
MBS Business Surges in 1Q 2012 Due to Refi GSE single-family securitizations leapt 16.2 percent during the first three months of 2012 compared to the previous quarter as mortgage lenders delivered some $303.9 billion in home loans to Fannie Mae and Freddie Mac’s securitization programs, according to an Inside The GSEs analysis. The first quarter’s flood of new business marked the fourth straight quarterly increase in production of GSE mortgage-backed securities after the market tanked in the second quarter of 2011.
April 20, 2012 - Inside The GSEs
FHFA Rolls Out New GSE Short Sale Timeline
Fannie Mae and Freddie Mac’s mortgage servicers will soon be required to review and respond to short sale requests within 30 days of an offer on the property and to provide weekly status updates if the offer is still under review after that, under new standards issued this week by the Federal Housing Finance Agency. Under the new guidance, effective June 15, servicers will have to make a final decision within 60 days of receiving an offer on a short sale property. The FHFA said the change is an attempt to hasten the traditionally time-consuming and difficult primary alternative to foreclosure.
April 20, 2012 - Inside The GSEs
FHFA Revises Categories for Examination Findings
The Federal Housing Finance Agency has revised and consolidated its categories for safety and soundness and Affordable Housing Program examination findings pertaining to Fannie Mae, Freddie Mac and the Federal Home Loan Banks, the FHFA announced in a recent advisory bulletin. Examination findings are deficiencies related to risk management, risk exposure, or violations of laws, regulations or orders that affect the performance or condition of a regulated entity, according to the FHFA.
April 20, 2012 - Inside The GSEs
GSE Writedown Foes Bolster Wavering FHFA
After months of hearing Congressional Democrats and White House allies suck up the public debate oxygen in favor of GSE principal reduction, mortgage writedown opponents are speaking up as the Federal Housing Finance Agency looks to be reconsidering its stand against loan forgiveness. Industry groups are expressing with greater volume their concern that principal forgiveness on loans guaranteed by Fannie Mae and Freddie Mac would ultimately hurt the housing market.
April 13, 2012 - Inside FHA Lending
FHA, GNMA Urged to Improve Risk Management
The FHA and Ginnie Mae continue to face risk-management challenges despite steps they have taken to better assess, manage and minimize risk, according to an updated report from the Government Accountability Office. The report said recommendations the GAO made in a previous assessment to improve risk management have not been fully implemented at either of the agencies. Both agencies, however, said efforts are underway to implement GAO recommendations. The FHA is getting more scrutiny from Congress because of the weak condition of the Mutual Mortgage Insurance Fund, whose capital reserve ratio has ...
April 12, 2012 - Inside Mortgage Finance
Fracking Moratorium Could Get Messy For Mortgage Lending in Certain States
Fannie Mae and Freddie Mac have generally made exceptions to their own rule regarding title impediments for properties with oil, gas, water or mineral rights, though new environmental disputes over hydraulic fracturing may change that, with “confounding implications for a particular region’s lenders,” said rating service DBRS. While contracts that allow for parties other than the property owner to utilize the land often complicate matters, the profitability of leases for resources like natural gas make those properties more attractive, because “the lease would generate income the borrower could apply...
April 12, 2012 - Mortgage Beat
MBA Asks Sen. Franken To Modify GSE Repurchase Bill
The Mortgage Bankers Association has weighed in on an obscure bill recently filed in the Senate that would require the Federal Housing Finance Agency to prohibit Fannie Mae or Freddie Mac from any “possessory interest that could substantially reduce the financial...
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