Browse articles from all of our Newsletters related to FHFA.

August 19, 2016 - Inside The GSEs

Guaranty Fees to Remain With No Immediate Plans for a Decrease

Guaranty fees won’t be going lower anytime soon as the Federal Housing Finance Agency said it has no immediate plans to decrease the current level of fees charged. After more than doubling from 2011 to 2015, rising to 56 basis points, the FHFA said the fees adequately reflected the credit risk of new acquisitions.But industry groups argue the fees prevent qualified borrowers from entering the housing market and are passed on to borrowers in the form of up-front closing costs and/or as part of their monthly payments. Earlier this summer a coalition of housing groups wrote FHFA Director Mel Watt about reducing g-fees.

August 19, 2016 - Inside The GSEs

FHFA Extends Credit Risk Transfer Comment Period to October

The Federal Housing Finance Agency extended the response deadline on its “request for input” on the credit risk-transfer program. The response period will now close on Oct. 13, 2016, instead of Aug. 29. The FHFA extended it by 45 days because various industry stakeholders said they wanted more time to evaluate the information and questions raised in the RFI. Back in June, the FHFA asked for industry feedback on various aspects of its CRT program. Fannie Mae’s Connecticut Avenue Securities program and Freddie Mac’s Structured Agency Credit Risk program have accounted for the bulk of GSE risk-transfer activity since the program was launched three years ago.

August 19, 2016 - Inside The GSEs

GSEs Could Need $125B Bailout in Severe Economic Crisis Scenario

  Although the Federal Housing Finance Agency’s recent stress test results showing that the GSEs could need up to $125 billion in a severe economic crisis, quarterly earnings continue to show a profitability that cancels out the need for a bailout. Required annually by the Dodd-Frank Act, the test of severely adverse scenario is based on Fannie Mae and Freddie Mac portfolios as of Dec. 31, 2015. …

August 19, 2016 - Inside The GSEs

Freddie Explores Chattel Lending With New MH Task Force

Freddie Mac recently formed a Manufactured Housing Initiative Task Force as the result of manufactured housing advocates pushing for greater support from the GSEs, especially in the form of chattel lending. The group met for the first time in late July in Reston, VA. The meeting came after a comment letter from the Manufactured Housing Institute on the Federal Housing Finance Agency’s duty-to-serve rule, which was followed by an invitation from MHI to discuss chattel loans at an MHI meeting in May. In December, the FHFA issued a proposed rule to implement the “duty-to-serve” provisions included in the Housing and Economic Recovery Act of 2008.

August 19, 2016 - Inside The GSEs

FHFA Increases Multifamily Lending Caps by $1.5B

The Federal Housing Finance Agency raised the 2016 lending caps for multifamily by $1.5 billion this week. As momentum in the space continues to grow, the cap is now set at $36.5 billion each for Fannie Mae and Freddie Mac.The agency last raised the caps in May, from $31 billion to $35 billion. The current combined cap of $73 billion is already 22 percent more than the combined cap for all of 2015, which was $60 billion. This adjustment is based on growing estimates of the overall size of the 2016 multifamily finance market and part of FHFA’s plan to review the market quarterly.

August 18, 2016 - Inside Mortgage Finance

The GSE Guaranty-Fee Debate Continues, FHFA Set on Maintaining Current Level

The Federal Housing Finance Agency again made clear that it has no immediate plans to lower the guaranty fees charged by the two government-sponsored enterprises in conservatorship. Guaranty fees more than doubled from 2011 to 2015, rising to 56 basis points, according to the FHFA’s most recent annual report on g-fees. Moreover, g-fees crept up in the past year, averaging 59 bps in 2015, compared to 57 bps in 2014. But the FHFA believes that slight uptick ...

August 12, 2016 - Inside MBS & ABS

GSE Mortgage Portfolios Continued to Shrink in 2Q16, Both Firms on Track for Conservatorship Targets

Fannie Mae and Freddie Mac continued to whittle away at their retained mortgage portfolios during the second quarter, keeping up a focus on shedding less-liquid assets. The two government-sponsored enterprises held a combined $637.0 billion of mortgage loans and mortgage securities at June 30, down 17.6 percent from a year ago. Under the current terms of their conservatorship, Fannie and Freddie are required to reduce their mortgage portfolios by at least 15.0 percent a year. By the beginning of 2018, each GSE portfolio is expected...[Includes one data table]

August 11, 2016 - Inside Mortgage Finance

FHFA Stress Test of Hypothetical Crisis Shows Fannie And Freddie Could Need as Much as a $125B Bailout

In the event of a severe economic crisis, Fannie Mae and Freddie Mac could need a bailout of up to $125.8 billion, according to a Federal Housing Finance Agency stress test released this week. The test of severely adverse scenarios, required by the Dodd-Frank Act for companies with total consolidated assets of more than $10 billion, took place in March and is based on Fannie and Freddie portfolios as of Dec. 31, 2015. The bailout would be needed on an incremental basis and would also depend on the treatment of the government-sponsored enterprises’ deferred tax assets. Under this hypothetical economic scenario, situations include...

August 5, 2016 - Inside The GSEs

FHFA OIG Defends Against Senators' Accusations

The Federal Housing Finance Agency’s Office of Inspector General disagreed with lawmakers’ allegations that organizational changes within the oversight agency have led to inefficiency. In June, Sens. Charles Grassley, R-IA, and Ron Johnson, R-WI, asked the Council of Inspectors General on Integrity and Efficiency to review the FHFA OIG. The senators said that staff cuts in the Office of Audits over the past two years, combined with money spent to hire outside employees, has led to decreased production since FHFA IG Laura Wertheimer took reign in 2014. They complained that the agency produced less audit reports in 2015 and said some reports that were completed were not published.

August 5, 2016 - Inside The GSEs

Talks of Post-Crisis Loss Mitigation Program Underway

The Federal Housing Finance Agency is well along on planning a replacement program for underwater mortgages with an announcement coming “relatively soon,” Freddie Mac CEO Donald Layton said this week. The successor program will be a “relief refinance” initiative, he said in an interview with Inside The GSEs, noting the borrower will be able to refinance “without going through a full new regular credit process.” Layton added that mortgage professionals should think of the new effort as a cousin to the Home Affordable Refinance Program, which is set to expire at the end of the year. There are approximately 325,290 borrowers still eligible for a refinance under the HARP initiative, according to FHFA’s figures.

August 5, 2016 - Inside The GSEs

FHFA Nixes URLA Language Preference Question

The Federal Housing Finance Agency concluded that adding a question about a borrower’s language preference on its updated Uniform Residential Loan Application form was probably not a good idea after all, at least for now. The URLA is an industry-standard loan application that has remained pretty much the same for the last two decades. The FHFA is charged with finalizing the redesigned application this summer to give lenders adequate time to prepare for the new form in January 2018. In an attempt to recognize the growing numbers of non-English speakers, the FHFA considered adding a question about the borrower’s primary language.

August 5, 2016 - Inside The GSEs

Guaranty-Fee Report Released, Watt Says Current Fees Appropriate

GSE guaranty fees more than doubled from 2011 to 2015, increasing from an average of 26 basis points in 2011 to 56 basis points in 2015, according to a new report published this week. That sharp increase has prompted trade and community groups to lobby for lower fees. However, Federal Housing Finance Agency Director Mel Watt said this week that the current charges “strike the right balance, between safety and soundness and liquidity in the housing finance market,” according to a reply letter he sent to the Center for Responsible Lenders, Mortgage Bankers Association and a host of others seeking a fee reduction. In the FHFA’s annual report to Congress on guaranty fees...

August 5, 2016 - Inside The GSEs

GSEs 2Q: Net Income Gains, Increased Reliance on G-Fees

Fannie Mae and Freddie Mac – in conservatorship for almost eight years now – posted combined net income of $3.94 billion for the second quarter, with an assist from higher guaranty fee income and a noticeable decline in hedging charges. Fannie’s profit was $2.9 billion for the second quarter, more than double the $1.1 billion reported last quarter. The GSE attributed the increase in net income to lower fair value losses in the quarter, coupled with high credit-related income due to home price increases and interest rate decreases. Higher net revenues driven by increased mortgage prepayments also helped. Fannie booked $3.26 billion of guaranty fee income in 2Q16, compared to $3.22 billion in the first quarter.

August 4, 2016 - Inside Mortgage Finance

GSE Guaranty Fees Held Steady During 2Q16 as FHFA Sets ‘Minimum Base’ G-Fee

The Federal Housing Finance Agency so far has resisted calls to lower guaranty fees charged by Fannie Mae and Freddie Mac and quietly set a “minimum base guaranty fee” for the two government-sponsored enterprises. The FHFA directive was revealed in the 10-Q filings issued by the two GSEs this week accompanying second-quarter financial results that showed a combined $3.94 billion in net income. Their Securities and Exchange Commission filings, however, provided little detail about what the minimum base fee is. “In July 2016,” Fannie’s 10-Q states...

July 29, 2016 - Inside FHA/VA Lending

VA Further Clarifies Guidance on TRID, Other Policy Handbook Items

We pick up where we left off last issue with the Department of Veterans Affairs attempting to clarify certain guidance in the VA Lender Handbook. ? If the TRID (Truth in Lending/Real Estate Settlement Procedures Act Integrated Disclosures) closing disclosures change after the veteran signs [the form], should the lender require the veteran to sign it again? VA: The short answer is yes. The lender is required to provide the TRID closing disclosure no later than three business days before consummation. The lender is required to provide a corrected closing disclosure to the borrower three days before consummation or closing in certain instances, and at or before consummation if other types of changes occur, such as adjustment of costs or credits. Therefore, any changes made that require an amended disclosure must have the borrower’s signature. ? Is the Amendatory Clause mandatory for all ...

July 28, 2016 - Inside Mortgage Finance

Government Offers Peek at What Future Post-Crisis Foreclosure Prevention Programs Should Look Like

As federal programs to help underwater borrowers are phased out, government agencies want the mortgage industry to pick up where it left off to help troubled homeowners avoid foreclosure. They suggested that future programs be accessible, affordable, sustainable, transparent and have sufficient accountability. The Federal Housing Finance Agency, Department of Treasury, and the Department of Housing and Urban Development released a report this week that discussed what future loss mitigation programs should look like and lessons learned. The Home Affordable Modification Program and related federal initiatives will sunset at the end of 2016. “With the formal end of the crisis-era programs, the mortgage servicing industry will shoulder...

July 22, 2016 - Inside The GSEs

GSE Roundup

FHFA Publishes Update to Proposed Duty To Serve Rule: This week the Federal Housing Finance Agency provided an update to its proposed duty to serve rule in the form of summaries of roundtable meetings it held with various groups in April and May, On April 19 and May 2, FHFA said it met with rural housing market stakeholders. On April 20, it met with consumer groups, civil rights groups, affordable housing advocates and energy efficiency stakeholders, on April 25, FHFA met with financial service stakeholders, and on April 26, FHFA met with members of the manufactured housing industry.

July 22, 2016 - Inside The GSEs

FHFA Denying Access to GSE Corporate Records

The Federal Housing Finance Agency is seeking to prevent GSE shareholder and director of Investors Unite, Tim Pagliara, from inspecting the corporate records of Fannie Mae and Freddie Mac. Pagliara filed a lawsuit in state courts in March hoping to gain access, as an individual stockholder, to the GSEs’ records to determine the circumstances surrounding the sweep. Fannie, incorporated in Delaware, and Freddie, incorporated in Virginia, both denied his request to review the records earlier this year. Pagliara then argued that his rights as a shareholder were denied for “no legitimate basis.” This week, the FHFA filed a motion to substitute itself for Pagliara and remove...

July 22, 2016 - Inside The GSEs

FHLBank Raises Loan Limit by $1M and Expands MPF Program

The Federal Home Loan Bank’s Mortgage Partnership Finance Direct program significantly raised its loan limits from $1.5 million to $2.5 million, and now includes hybrid adjustable-rate mortgages. This is the second jump in about a year. Last June, the loan limit more than doubled from $729,750 to $1.5 million. MPF Direct participants are often small lending institutions. Eric Schambow, senior vice president and senior director with MPF product management, told Inside The GSEs that in working with members that already deliver under the MPF program and its Advisory Council of Private Funding Institutions, the FHLB heard them express the need to more completely match what the marketplace offers.

July 22, 2016 - Inside The GSEs

OIG Findings Show Some FHFA Examinations Ineffective

The Federal Housing Finance Agency Office of Inspector General released three reports last week accusing the FHFA of shirking its responsibility to effectively examine Fannie Mae and Freddie Mac. The first report said the FHFA failed to deliver timely reports of its examinations to the GSE boards and obtain written responses back from the boards about remediating specific concerns. The FHFA and Division of Enterprise Review provide examiners with “very limited guidance” for communicating the exams’ findings, conclusions, and ratings to the board of directors of a regulated entity, according to the report. “In contrast, other federal financial regulators have issued detailed...

July 22, 2016 - Inside The GSEs

Lawmakers Request Outside Review of FHFA-OIG

Two senators are questioning the effectiveness of the Federal Housing Finance Agency’s watchdog, the Office of the Inspector General, in light of staff cuts in the Office of Audits over the past two years and money spent to hire outside attorneys and employees. Sens. Charles Grassley, R-IA, and Ron Johnson, R-WI, penned a letter late last month to the Council of Inspectors General on Integrity and Efficiency requesting an outside review of the FHFA OIG. Prior to the letter to the CIGIE, which monitors the integrity of the IG office, Grassley has sent several letters to FHFA OIG’s Laura Wertheimer since last October regarding organizational changes made under her leadership.

July 22, 2016 - Inside The GSEs

FHFA's Principal-Reduction Map Shows FL, NJ Most Eligible States

Last week, the Federal Housing Finance Agency released a map highlighting eligible borrower locations for its principal-reduction program and instructed servicers to begin soliciting borrowers. The interactive map highlights where the most eligible borrowers are located for its new principal reduction option for loan modifications. The number of borrowers eligible to take advantage of the program has declined some. When it was announced in April, the FHFA estimated that 33,622 borrowers would be eligible, but it has since lowered that estimate to 30,000. The FHFA attributes the reduction to a “continuously evolving housing market” that may have improved in some areas.

July 22, 2016 - Inside The GSEs

Trade Groups, Congress Seek to Squash URLA Language Question

Trade groups and a long list of Congressmen are crying foul and urging the Federal Housing Finance Agency to not include a question asking borrowers’ language preference on its new Uniform Residential Loan Application. The FHFA, along with Fannie Mae and Freddie Mac, are considering adding the question as a last- minute addition to the URLA. However, in June, nine trade groups, including the American Bankers Association, Consumer Mortgage Coalition and Mortgage Bankers Association, wrote FHFA Director Mel Watt to voice their concerns, many of which focused on compliance and discrimination issues. They argued that a language preference question requires lenders to ask borrowers sensitive questions before...

July 22, 2016 - Inside The GSEs

FHFA, GSE Concerns with PACE Loans Continue to Loom

The Federal Housing Finance Agency remains resistant to taking on Property-Assessed Clean Energy loans despite this week’s announcement that the FHA will allow PACE loans. PACE programs provide financing for home energy improvements and water conservation, repaid through an assessment added to the property’s tax bill. FHA’s new guidance addresses state programs where the PACE obligation is treated like a property tax with priority over an FHA mortgage lien.However, like other mortgage industry critics of PACE loans, FHFA Director Mel Watt, said he continues to have “serious concerns” with how PACE programs are financed.

July 21, 2016 - Inside Mortgage Finance

FHA to Insure Certain Mortgages with PACE Liens; MBA, California Realtors Dissatisfied with Guidelines

The FHA this week clarified its policy on insuring mortgages with PACE (Property Assessed Clean Energy) senior tax liens to make it easier for borrowers to obtain FHA financing for such mortgages, but the mortgage and real estate industries continue to have concerns. The new guidelines address state programs where the PACE obligation is treated like a property tax with priority over an FHA lien. The program provides financing for home-energy improvements and water conservation, and is repaid through an assessment added to the property’s tax bill. The guidelines are designed...

July 15, 2016 - Inside MBS & ABS

Jumbo Issuance Will Continue to be Minimal as Banks Seek More Economical Solutions, Despite Positive Housing Outlook

The outlook for mortgage and housing activity in 2016 is expected to stay positive, but prime jumbo issuance won’t necessarily benefit from those fundamentals, according to S&P Global Ratings. Overall, the positive housing market is not translating into an increase in issuance or securitization. In fact, S&P analysts on a webinar this week said that non-agency securitization has been relatively flat over the past few years. Prime jumbo issuance continues to experience a dry spell that will most likely continue into the second half of 2016, they said. “If you look at the loans being originated, they are being held...

July 14, 2016 - Inside Mortgage Finance

New FHFA Map Pinpoints Location of Borrowers Eligible for Loan Reduction, Lowers Estimate

Florida and New Jersey lead the way in having the most borrowers who are likely eligible to take advantage of the Federal Housing Finance Agency’s principal modification program, according to a new map the agency released this week. The FHFA introduced the one-time loan modification program in April focusing on a highly targeted group of underwater borrowers. It is limited to Fannie Mae and Freddie Mac loans that were seriously delinquent as of March 31, had remaining loan amounts of less than $250,000, and unpaid debt, including arrearages, exceeding 115 percent of the current market value of the home. The interactive map focuses...

July 14, 2016 - Inside Mortgage Finance

Lawmakers, Industry Groups Inundate FHFA With Letters Voicing Housing Policy Concerns

A bipartisan group of senators is urging Federal Housing Finance Agency Director Mel Watt not to take any steps that could possibly lead to Fannie Mae and Freddie Mac being released from conservatorship. Their letter sent last week is one of several in the past two months that Watt has received from various groups reiterating their positions on housing finance reform. Senate Republicans Bob Corker (TN), Mike Crapo (ID) and Dean Heller (NV), along with Democrats Mark Warner (VA), Heidi Heitkamp (ND) and Jon Tester (MT), emphasized the need for comprehensive reform legislation over “any unilateral action” by the administration. “That is why Congress included a provision in the 2016 omnibus legislation which restricted the release of Treasury’s shares in the government-sponsored enterprises,” they wrote. “The passage of this provision reasserted the desire of Congress to have a say in determining the fate of Fannie and Freddie.” But the lawmakers acknowledged...


The yield on the benchmark 10-year Treasury fell to all-time low of 1.34% recently. How much better will originations be at your shop in the second half compared to 1H, if at all?

Better by 1% to 10%.


Better by 11% to 25%.


Off the charts better. Applications are great now.


Worse than 1H, but not by much.


A lot worse. But not sure on the damage.


Housing Pulse