Browse articles from all of our Newsletters related to FHFA.

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...

July 11, 2016 - Inside the CFPB

Life Under TRID: Broker Group Wants G-Fee, LLPA Clarification to TRID Rule

A mortgage industry group wants to turn the TRID disclosure tables back on the regulators and reveal to homebuyers all the fees – including those imposed by the government – they have to pay for their home purchases, and not just those generated by the industry. The mortgage broker organization known as NAMB – The Association of Mortgage Professionals wants the CFPB and the Federal Housing Finance Agency to further clarify the TILA/RESPA Integrated Disclosure Rule by including a new line item that clearly states the “hidden” guarantee-fees and loan- level price adjustments from Fannie Mae and Freddie Mac. [However, it should be noted that the FHFA has no authorities under the Truth in Lending Act nor the Real Estate Settlement Procedures Act.] ...

July 8, 2016 - Inside The GSEs

FHFA Adopts, Issues Rules on Fraud and Penalty Changes

The Federal Housing Finance Agency issued interim final rules last week on fraud and civil penalties that are open for comment through Aug. 1. The interim final rule amends rules of practice and procedure and other agency regulations to adjust each civil money penalty within its jurisdiction to account for inflation. This was done pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements of 2015. FHFA noted that the Adjustment Improvements Act provides that the initial catch-up adjustment must be implemented by an interim final rule.

July 8, 2016 - Inside The GSEs

FHFA Talks All Things CRT, Seeks Input on Front-End Deals

The Federal Housing Finance Agency released detailed information on how much the GSEs pay to issue their popular credit-risk transfer debt notes and the types of investors that it has been attracting. The FHFA’s cost estimates included Fannie’s Connecticut Avenue Securities program and Freddie’s Structured Agency Credit Risk program, which have accounted for most GSE risk-transfer activity so far. The estimated cost of each credit-risk debt issuance depends on how private investors and the GSE divvy up the risk as well as the expected default rate and prepayment speed for the reference pool. At the low end of the scale, Fannie conceded an estimated 5 to 6 basis points of guarantee fee income in its second....

July 8, 2016 - Inside The GSEs

DeMarco's Reform Plan Says Turn GSEs into Insurance Companies

Former Federal Housing Finance Agency Director Ed DeMarco said the GSEs should operate as lender-owned entities that sell insurance against borrower defaults. DeMarco, along with Michael Bright, director of the Milken Institute’s Center for Financial Markets, published the housing reform plan last week. They said a long-term housing finance decision is needed. “Meaningful reform must be achieved, the vast majority of policymakers say, yet the decade anniversary of the conservatorships of Fannie Mae and Freddie Mac looms,” they said. “The FHFA was never envisioned as the permanent manager of the enterprises.” DeMarco and Blight suggest turning the GSEs into mutual insurance companies. In this scenario...

July 8, 2016 - Inside The GSEs

First NPL Sales Report Details Top Buyers and Sales Outcomes

Fannie Mae and Freddie Mac have sold 41,649 nonperforming loans through May 2016, according to the Federal Housing Finance Agency’s inaugural report on nonperforming loan sales and borrower outcomes. The report, released last week, is the first of two reports the FHFA plans to publish each year highlighting NPL sales activities. The loans had an aggregate unpaid principal balance of $8.5 billion and were delinquent 3.4 years on average. Freddie led the NPL sales market for the GSEs having sold 26,436 delinquent loans. Fannie was a distant second at 15,213. The average loan-to-value ratio was 98 percent. LSF9 Mortgage Holdings and Pretium Mortgage Credit Partners were the top...

July 8, 2016 - Inside The GSEs

FHFA Reports on CSP, SS Milestones, First Release in 2016

The Federal Housing Finance Agency released an updated timeline, along with more technical details, on its single-security and common securitization platform late this week. It plans to announce the intended launch date for the single security later this year. This will give stakeholders at least 12 months' advance notice to prepare for implementation. While the project seems to be on track, the FHFA noted that some of the interim milestones could change due to the complicated undertaking. “Many of the milestones pertain to three types of system testing that the enterprises and Common Securitization Solutions must complete before implementation of each release,” according to the FHFA.

July 8, 2016 - Inside The GSEs

Senators Urge Watt to Prevent Fannie and Freddie Release

Sen. Bob Corker, R-TN, and Mark Warner, D-VA, wrote Federal Housing Finance Agency Director Mel Watt urging him to avoid taking steps that would lead to the GSEs’ release from conservatorship without comprehensive reform. The letter, sent on July 7, argued that doing so would perpetuate the pre-crisis practice of pubic losses and private gains. Senator Mike Crapo, R-ID, Heidi Heitkamp, D-ND, Dean Heller R-NV, and Jon Tester, D-MT, also coauthored the letter. They agree that an overall change to the existing structure needs to take place, but warned that it should only come through housing finance reform legislation and not any unilateral action by the administration.

July 8, 2016 - Inside MBS & ABS

FHFA Vows to Keep a Tight Lid on Fannie/Freddie Homogeneity, Adds Details to Single Security Timeline

The Federal Housing Finance Agency this week detailed its efforts to make sure Fannie Mae and Freddie Mac policies and practices are consistent enough to keep prepayments speeds on their to-be-announced securities essentially the same. Prepay speeds for the two government-sponsored enterprises have moved significantly closer as more of their products and program requirements have been standardized, the FHFA said in an update on its single security initiative. Keeping them that way is seen as critical to the success of the program, in which Fannie and Freddie TBA MBS will be fully fungible – and can even be combined in so-called second-tier securitizations. Some industry interests have urged...

July 7, 2016 - Inside Mortgage Finance

FHFA Mulls Front-End Risk Transfers, But Shows Little Interest in ‘Deeper MI’ Proposal

The Federal Housing Finance Agency is looking for ways to expand the credit-risk transfer programs at Fannie Mae and Freddie Mac but showing little interest in a proposal being pushed by the Mortgage Bankers Association and private mortgage insurers. The regulator of the two government-sponsored enterprises recently issued a request for comment on front-end risk sharing without directly discussing the concept of sellers getting reduced guaranty fees for loans that have more than the required level of private MI coverage. It did, however, cite counterparty risk as one of the key issues in credit-risk transfers. As of Dec. 31, 2015, the GSEs had transferred...

July 7, 2016 - Inside Mortgage Finance

Post-Election Wish List for Some Mortgage-Industry Interests: Pricing Cuts From FHA and the GSEs

Over the past year, mortgage lenders have been clamoring for pricing breaks from the government-sponsored enterprises as well as the FHA, but so far nothing has changed. But is the industry’s luck about to turn? A handful of GSE watchers interviewed by Inside Mortgage Finance believe there’s a greater likelihood of a cut in FHA premiums before the fall election as opposed to the Federal Housing Finance Agency doing something about loan-level price adjustments or guaranty fees. In general, it’s...

July 1, 2016 - Inside MBS & ABS

Court Releases More Documents, Including Former Treasury Official Deposition, in GSE Shareholder Case

Several more court documents were released over the past week that offer additional details into the circumstances surrounding the Treasury Department’s decision to replace the quarterly dividend Fannie Mae and Freddie Mac had been paying in conservatorship with a net worth sweep. Industry observers say the new memos and deposition transcripts reinforce the notion that the government had been planning the sweep for a while before it was implemented in late 2012. The government-sponsored enterprises’ shareholders have been challenging...

July 1, 2016 - Inside MBS & ABS

FHFA Provides More Details on GSE Risk- Transfer Programs, Calls for Industry Input

The Federal Housing Finance Agency this week revealed estimates of how much it costs Fannie Mae and Freddie Mac to issue their popular credit-risk transfer debt notes, as well as more information on the kinds of investors that have been buying them. In addition to a report on the existing credit-risk transfer activities of the two government-sponsored enterprises, the FHFA also formally soliciting input on further development of the program, including the ongoing interest in so-called front-end CRT options. The FHFA’s cost estimates referred...

June 24, 2016 - Inside The GSEs

FHFA Examiners Hightlight GSE, FHLB Concerns in New Report

Examiners raised several issues in the Federal Housing Finance Agency’s annual report to Congress detailing the work of Fannie Mae, Freddie Mac and the Federal Home Loan Banks. One critical issue in the report, released last week, was the GSEs’ inability to build capital. Examiners said income reductions from shrinking portfolios, coupled with decreases in income from reserve releases and legal settlements and market-to-market volatility from their derivatives portfolio all increase the likelihood of negative net worth in future quarters. Moreover, the examiners said credit-risk transfer initiatives also impose costs that will reduce the GSEs’ earnings. Fannie’s problem assets continued to decline in 2015, but the examiners...

June 24, 2016 - Inside The GSEs

GSEs Sold Credit Risk on $1 Trillion in UPB So Far

Fannie Mae and Freddie Mac have now sold credit risk on more than $1 trillion in unpaid balances of single-family mortgages combined. As of the second quarter, Freddie sold slightly more and transferred the risk on $552.7 million, and Fannie sold $550.1 billion. In the second quarter, Freddie’s credit risk transfer transactions amounted to $75.6 million, an increase from $53.7 billion in the first quarter but less than the $98.0 billion transferred in the second quarter of 2015. Fannie transferred the risk on $37.3 billion in the first quarter, down from the $65.9 billion the previous quarter and $46.2 billion a year earlier.

June 24, 2016 - Inside The GSEs

White House Blocks Document Release in Shareholder Case

The White House is blocking the release of years- old memos and emails surrounding the Treasury sweep of GSE profits. This month, it formally invoked presidential communication privilege over four documents specifically. But some wonder if it’s just to avoid embarrassment. These particular documents represent communication between former National Economic Council members Brian Deese, Gene Sperling and Jim Parrott. And this is in addition to documents the Treasury has already protected under other executive privilege claims. A judge in the Fairholme Funds, Inc. et. al v. the United States case requested on May 27 that the court view the draft memos and emails. One of the documents is a draft memorandum from...

June 24, 2016 - Inside The GSEs

New Bill Presses Treasury to Research Ending Conservatorship

An Arkansas Congressman introduced a bill last week that would require the Treasury Department to annually exam the possibility of ending the GSE conservatorship. Rep. French Hill, R-AR, said H.R. 5505, the GSE Review and Reform Act, would require Treasury Secretary Jack Lew to lead the reform of Fannie Mae and Freddie Mac. It would amend the Consumer Financial Protection Act of 2010 to require annual studies on ending the conservatorship of the GSEs. He noted that outside of a study done in 2011, the administration has had little engagement with Congress on a path toward ending the eight-year conservatorship and reforming the “broken” housing finance system. Hill added that the...

June 24, 2016 - Inside The GSEs

Housing Reform White Paper Part 2 Details Governance, Capital

The latest white paper on housing finance reform details the governance and capitalization plan of a proposal that replaces the GSEs with a new government corporation. But smaller lenders are still uncertain what their role would be in the plan. In what can be dubbed as part two to the white paper, “A More Promising Road to GSE Reform,” published by the Urban Institute, the authors more closely examine their proposed National Mortgage Reinsurance Corp. The NMRC would take over the assets of Fannie Mae and Freddie Mac going forward, and would transfer all of the “non-catastrophic” risk on future mortgage-backed securities to the private market.

June 24, 2016 - Inside The GSEs

New Fannie Headquarters Under Construction Raises Eyebrows

Fannie Mae’s $759 million new headquarters has been the centerpiece of public criticism over the past week. A Federal Housing Finance Agency Office of the Inspector General report criticized the FHFA for allowing what it called excessive spending on the downtown Washington, DC, headquarters, which broke ground in mid-May. The review stemmed from an anonymous hotline complaint alleging overspending on the project. The IG questioned the FHFA’s oversight and recommended the agency closely scrutinize the building’s plans and budget. The problem arose when the cost to build out the new space to Fannie’s specifications increased by 54 percent from January 2015. Costs rose from $164.32 square feet to $252.81 square feet. Then back down some in May 2016 to $223.35/square foot.

June 23, 2016 - Inside Mortgage Finance

Jumbo Market Closely Tracked Overall Trends in 1Q16 Mortgage Originations, Non-Agency Fared Slightly Better

Jumbo mortgage originations declined by 2.0 percent during the first quarter of 2016, mirroring the modest downturn in overall mortgage lending from the previous quarter. Jumbo originations – including loans that were within the high-cost loan limits for Fannie Mae, Freddie Mac, FHA and VA – totaled $100.61 billion in the first quarter, according to a new analysis and ranking by Inside Mortgage Finance. The sector accounted for 26.5 percent of total originations during the first three months of the year, down slightly from a 26.7 percent share in the fourth quarter. The jumbo share of total originations has generally been...[Includes three data tables]

June 17, 2016 - Inside Nonconforming Markets

Borrowers with Large Loans Consider Few Lenders

The first report from the National Mortgage Database offers some details on borrowers with large loans beyond the data included in the Home Mortgage Disclosure Act. The NMDB includes information from surveys administered by the Consumer Financial Protection Bureau and the Federal Housing Finance Agency. The federal regulators survey about 6,000 new borrowers on a quarterly basis, accounting for about 0.4 percent of the population of new mortgage originations ...

June 10, 2016 - Inside The GSEs

Sen. Warren Pushes for Comment On FHFA Super-Lien Opposition

Sen. Elizabeth Warren, D-MA, is urging the Federal Housing Finance Agency to solicit public comments on FHFA’s policy regarding super-liens imposed by homeowner associations on loans in foreclosure. The FHFA has said it is obligated to protect the rights of Fannie Mae and Freddie Mac and will aggressively do so. Super-lien laws are currently in 22 states and the District of Columbia. They allow homeowner associations that are owed fees to take priority over ...

June 10, 2016 - Inside The GSEs

Judge Orders FHFA, Treasury to Produce More Documents

A judge overseeing a key GSE shareholder lawsuit says she will look at another batch of government documents to determine whether they should be made available to the plaintiffs. The Federal Housing Finance Agency and Treasury Department are opposing the decision. Judge Margaret Sweeney’s May 20 order, in the Fairholme Funds, Inc. v. The United States case, requests that the defendants provide the court with hard copies of some of the documents listed in the ...

June 10, 2016 - Inside The GSEs

FHFA’s Attempt to Consolidate Shareholder Cases Denied

A key judicial review panel last week said the Federal Housing Finance Agency’s March bid to consolidate all the GSE shareholder lawsuits and transfer them to one court was “inappropriate” and rejected the government’s request. The Judicial Panel on Multidistrict Litigation said that the government’s case for centralization was not strong enough. “On the basis of the papers filed and hearing session held, we conclude that centralization is not necessary for the ...

June 10, 2016 - Inside The GSEs

Watt Receives Multiple Letters Urging for GSE Reform Action

Calls for a GSE recapitalization are growing louder as industry groups and lawmakers urge Federal Housing Finance Agency Director Mel Watt to exercise his authority and suspend the Treasury Department’s sweep of Fannie Mae and Fannie Mac profits. Letters to the FHFA and Treasury last week came from a group of small lenders, affordable housing organizations and civil rights advocates, while a group of 32 Democrats on Capitol Hill also chimed in ...


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.

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