Browse articles from all of our Newsletters related to FHFA.

April 17, 2015 - Inside MBS & ABS

High G-Fees and LLPAs, Ability-to-Repay Rule Are Hindering Access to Credit, Market Recovery

High guarantee fees and loan-level pricing adjustments charged by Fannie Mae and Freddie Mac are not enough to counteract lingering MBS investor mistrust and draw private players back into the housing finance market, according to a top industry official. “The Federal Housing Finance Agency seems to believe that by raising costs for loans purchased or guaranteed by the government-sponsored enterprises, they can lure private sector capital back to the mortgage market ...

April 16, 2015 - Inside Mortgage Finance

Treasury Official Says GSEs, Housing Market Better Off Under Current Conservatorship Plan

Fannie Mae and Freddie Mac are legally bound to poverty and to remain instruments of the federal government in perpetuity, but Treasury officials argue that the current conservatorship arrangement is better for the government-sponsored enterprises and the housing market. At a seminar in Washington, DC, this week, Treasury Counselor Michael Stegman said that the GSEs benefit from the agreement under which nearly all of their profits are siphoned off by the government ...

April 10, 2015 - Inside The GSEs

FHFA Diversity HIring Grows, More Work to Be Done, Agency Says

Although the Federal Housing Finance Agency has upped its efforts to promote diversity and inclusion in the workforce in 2014, the agency said challenges remain as some racial and ethnic groups are still underrepresented, according to a March 31 report to Congress by FHFA’s Office of Minority and Women Inclusion. Because of the Dodd-Frank Act requirements, there has been considerable increases in racial, ethnic and gender diversity of FHFA’s executive leadership team since the agency first began reporting to Congress in 2011. Even though the number of FHFA executives has declined by 13.5 percent in the past three years, minorities comprised 23.5 percent, compared to 10.1 percent in 2011, and women comprised 33.3 percent, compared to 25.4 percent.

April 10, 2015 - Inside The GSEs

MI Industry May Get First Peek at Final PMIER Rule Early Next Week

The Federal Housing Finance Agency is expected to unveil its final rules on Private Mortgage Insurer Eligibility Requirements (PMIERs) early next week, according to industry officials who claim to have knowledge of the regulator’s thinking. After the MI industry views the regulations, the rest of the world likely will see them a week later. It’s anticipated that the FHFA will not make any surprising changes to what was proposed earlier in the year, though a new report from Compass Point Trading & Research predicts that the final regulatory language will be “modestly softened.” The research firm adds, “Our view remains that the forthcoming FHFA release will be positive for the PMI industry,” noting that the finalization will remove a “meaningful policy overhang” from the sector.

April 2, 2015 - Inside Mortgage Finance

Small Rating Agency Downgrades MGIC, Industry Analysts Doubt FHA Premium Cut, PMIERs Will Yield Ratings Actions

Most analysts are confident that private mortgage insurance companies will not see their ratings downgraded due to increased competition from the FHA as well as new capital requirements for private MIs proposed by the Federal Housing Finance Agency. But Zacks Investment Research, a research firm that ranks and rates investment products for investors, went against the grain and downgraded MGIC Investment Corp. by two notches due exactly to those reasons. While private MIs have been gaining market share in the last couple of years, Mortgage Guaranty Insurance Corp. and its business competitors will find...

March 27, 2015 - Inside The GSEs

IG Report Reviews FHFA’s Management of Fannie, Freddie

The Federal Finance Housing Agency needs to be vigilant in its continued oversight in its management of Fannie Mae and Freddie Mac, according a report from the Office of the Inspector General. Because the FHFA’s actions aren’t subject to judicial review, the OIG said its oversight of the FHFA conservatorship actions and processes “is critical to safeguard taxpayer dollars and ensure that the FHFA is fulfilling its statutory duties.” In the new white paper, the OIG said Congress vested the FHFA with “sweeping powers” as conservator to potentially control every decision the enterprises make. In 2014 alone, the FHFA flexed its muscle to take more than 750 conservatorship “actions” against Fannie and Freddie.

March 27, 2015 - Inside The GSEs

FHFA-IG White Paper Questions Fannie, Freddie Profits

A recent white paper by the Federal Housing Finance Agency Office of the Inspector General highlights the precariousness of GSE profitability. The IG questions whether Fannie Mae and Freddie Mac has the muscle to withstand adverse market conditions or other changes and uncertainties that could lead to additional losses.“The enterprises’ conditions have stabilized and market conditions have improved since 2008. They returned to profitability in 2012; however, the level of earnings they experienced in 2013 and 2014 is not sustainable over the long term,” the paper said. Record-breaking profits of a combined $132.6 billion were reported in 2013 for Fannie Mae and Freddie Mac. That number dropped significantly the following year to $21.9 billion.

March 27, 2015 - Inside The GSEs

FHFA Weighing HARP Extension, Won’t Rule Out Program Changes

It’s still unclear whether the Home Affordable Refinance Program, set to expire in December, will be extended and if eligibility requirements will be altered. During remarks at a JPMorgan conference in March, Bob Ryan, special advisor to Mel Watt, Federal Housing Finance Agency director, said that a decision needs to be made in the coming months. HARP, introduced in 2009 as a way for borrowers with little or no home equity to refinance mortgages into affordable payments, was originally set to expire at the end of 2013 but was extended through this year. Close to 3.3 million loans were refinanced through HARP since it began in 2009, and as of September 2014 there were...

March 27, 2015 - Inside The GSEs

Senators Tell FHFA CSP Needs Fine Tuning, Involvement of Non-GSEs

Members of the Senate Committee on Banking, Housing and Urban Development cited a lack of flexibility to accommodate multiple types of users, a biased board of directors, and an unacceptable timeframe as their primary concerns about the common securitization platform. The bipartisan group of eight senators, led by Republican Chairman Bob Corker (TN), articulated their concerns surrounding the development and usage of the planned CSP in a letter addressed to Federal Housing Finance Agency Director Mel Watt. Primarily, they want to ensure that the CSP is designed to be just as usable and beneficial to the private sector as it is for Fannie Mae and Freddie Mac in order to avoid “the duopolistic tendencies of the past.”

March 27, 2015 - Inside The GSEs

FHFA Remains Quiet on When it Will Approve Ocwen’s Sale of GSE MSR

Over the past month, Ocwen Financial has unveiled agreements to sell roughly $89.4 billion of Fannie Mae and Freddie Mac servicing rights – transactions that require approval from not only the GSEs, but their regulator/conservator, the Federal Housing Finance Agency. To date, the FHFA has made no public statements regarding Ocwen’s sales and isn’t likely to until it actually makes an approval or denial.Based on the transactions that have been announced since Feb. 23, there is little to indicate that the deals won’t pass regulatory muster. The receivables being off-loaded by the troubled servicer are considered to be pristine in nature and with little in the way of delinquencies.

March 27, 2015 - Inside The GSEs

House Democrats Reintroduce Mortgage Finance Reform Bill

A bill to replace the Federal Housing Finance Agency with a beefed up Ginnie Mae and set Fannie Mae and Freddie Mac on a path to liquidation has been reintroduced in the House. The Partnership to Strengthen Homeownership Act was first introduced in July 2014 to wind down Fannie and Freddie over a five-year timeframe. Reps. John Delaney, D-MD, John Carney, D-DE, and Jim Himes, D-CT, are the lead sponsors of the measure. They said the bill takes the best ideas from both parties to create a housing finance system that combines the strengths of the private and public sectors.The congressmen agreed that things need to be done differently.

March 27, 2015 - Inside MBS & ABS

Nomura Unlikely to Take Ratings Hit; Court Allows NCUA Suit Against RBS, HSBC; AIG Investors Win

Nomura Holdings is unlikely to suffer a hit in ratings because of the Federal Housing Finance Agency’s mortgage-backed securities lawsuit, but the litigation may yet prove costly to the Japanese financial holding company, according to a recent report from Fitch Ratings. Nomura went to trial on March 16 to defend itself against allegations that it misrepresented the underlying asset quality of MBS it sold to Fannie Mae and Freddie Mac prior to the financial crisis ...

March 26, 2015 - Inside Mortgage Finance

FHFA Likely Will Keep Base Fannie/Freddie Guaranty Fees Unchanged, but Look for a Cut in Certain LLPAs

In early April, the Federal Housing Finance Agency is expected to issue its long-awaited proclamation on guaranty fees with the likely outcome of no change whatsoever in the base fees charged by the two government-sponsored enterprises, according to officials tracking the issue. Few lenders are counting on a reduction in the current “ongoing” GSE fee, which increased from 13 basis points in 2009 to 40 bps in 2013, according to the FHFA. But there could be relief on ...

March 20, 2015 - Inside MBS & ABS

Indianapolis FHLBank Admits Another REIT Captive Insurer Despite Proposed Ban

Despite the Federal Housing Finance Authority’s proposed rule that would block real estate investment trusts from joining a Federal Home Loan Bank through captive insurance units, the Indianapolis FHLBank approved a new REIT member. An insurance subsidiary of Five Oaks Investment Corp. was admitted on Feb. 24, according to the REIT’s 2014 annual report released this week. A handful of other REITs, including Two Harbors, Redwood Trust and Invesco ...

March 20, 2015 - Inside MBS & ABS

Pressure Grows on FHFA to Push Common Securitization Platform Planning Beyond Focus on Existing GSE Business

A bipartisan group of U.S. Senate lawmakers this week urged the Federal Housing Finance Agency to move the budding common securitization platform for Fannie Mae and Freddie Mac “past the duopolistic tendencies of the past.” The FHFA originally directed the two government-sponsored enterprises to develop the CSP so that it would be open to and functional for all residential mortgage securitizers, but the agency last year detoured slightly ... [Includes one data chart]

March 13, 2015 - Inside The GSEs

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.

March 13, 2015 - Inside The GSEs

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.

March 13, 2015 - Inside The GSEs

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.

March 13, 2015 - Inside The GSEs

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.

March 13, 2015 - Inside The GSEs

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.]

March 13, 2015 - Inside MBS & ABS

GSE Common Securitization Platform May Get Beta Test Later This Year

Officials from the Federal Housing Finance Agency as well as the government-sponsored enterprises will give an update on the common securitization platform project at an upcoming technology show – but don’t expect a “beta” test, at least not yet. Over the past two weeks, Inside MBS & ABS had been hearing reports that a private “demo” of the CSP was in the works – and might possibly happen at a technology show later this month in Orlando, sponsored by the Mortgage Bankers Association. FHFA principal strategist Michael Aneiro is scheduled...

March 13, 2015 - Inside MBS & ABS

NY Court Clears BofA’s $8.5B MBS Settlement with Investors; Nomura Goes to Court Against FHFA

The dispute around an $8.5 billion settlement between Bank of America and non-agency MBS investors may be at an end after a New York state appeals court signed off on the deal. The agreement would mean a quick end to a lengthy legal battle over a settlement that was first announced on June 28, 2011. It also means the agreement could become the template for all representations-and-warranties settlements with large institutional investors, analysts said. BofA agreed...

March 12, 2015 - Inside Mortgage Finance

Jumbo Market Showed Modest Gains in 4Q14, Claimed Growing Share of New Originations

Jumbo mortgage production last year grew its share of total originations to its highest level since well before the financial collapse that launched the era of the “agency jumbo” loan. Mortgage lenders cranked out a total of $291.1 billion of home mortgages with loan balances exceeding the old conforming loan limit of $417,000. Like everything else in mortgages, jumbo production was down from 2013, by 22.4 percent. But total mortgage originations fell...[Includes three data charts]

March 6, 2015 - Inside MBS & ABS

Treasury: Speed GSE Change

Fannie Mae and Freddie Mac should move more quickly and expand key initiatives that are laying the groundwork for mortgage-finance reform, according to a Treasury Department official. In remarks prepared for an industry conference this week, Michael Stegman suggested the government-sponsored enterprises should expand their risk-transfer activities and open up the development of the common securitization platform to non-agency participants. “The near-term CSP initiative would not succeed...


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