Browse articles from all of our Newsletters related to FHFA.

October 2, 2015 - Inside MBS & ABS

Although the FHFA Says Its FHLB Captive Rule Is ‘Under Review,’ Some Analysts Think It’s a Dead Issue

Real estate investment trusts that have gained access to Federal Home Loan Bank advances don’t seem particularly worried that they will be kicked out of the system, at least not anytime soon. As for when the Federal Housing Finance Agency will issue a final membership rule that addresses the thorny topic, that’s a different matter. The FHFA formally proposed changes a year ago that would ban captive insurance companies, the vehicle through which all REITs have gained membership. Even though public comments were taken, no final rule has appeared. In some circles, the “no action” stance is being read...

October 1, 2015 - Inside Mortgage Finance

Trade Groups Continue to Express Concerns About FHLBank Membership Changes

Industry groups stepped up their pressure on Congress to block a proposed rule that would alter membership requirements in the Federal Home Loan Bank system. The latest letter came this week and was signed by the Mortgage Bankers Association, National Association of Real Estate Investment Trusts, Independent Community Bankers of America and Habitat for Humanity International. The Federal Housing Finance Agency proposed...

October 1, 2015 - Inside Mortgage Finance

Jumpstart GSE Reform Act Reintroduced But Overall Housing Reform at a Standstill

A streamlined version of the “Jumpstart GSE Reform Act,” recently reintroduced in Congress, then placed on hold and reintroduced again, could be considered before the end of the year. The bill, sponsored by Sens. Bob Corker, R-TN, Mark Warner, D-VA, and Elizabeth Warren, D-MA, would bar the Treasury from selling its stock in the two government-sponsored enterprises and prevent increases in Fannie Mae and Freddie Mac guaranty fees to pay for other government spending. An earlier version of the bill that Corker tried to fast-track through the Senate did not include...

September 25, 2015 - Inside The GSEs

GSE Roundup

FHFA-OIG Indictment in Baltimore Mortgage Fraud Case. Two men were sentenced for providing false information to mortgage lenders to enable buyers to qualify for 18 home mortgage loans in Baltimore that they could not afford. Sixteen of the 18 loans went into default, resulting in foreclosures and losses of about $1.2 million to Fannie Mae and Freddie Mac and certain mortgage lenders. Fitch: Fannie’s Loan Losses Slightly Lower Than Freddie’s for Some Cohorts. In an analysis of Fannie Mae and Freddie Mac loan-level loss data, Fitch Ratings concluded that, while similar, there are differences between loss severities among loans with similar profiles. Fannie disclosed its loan-level loss data in late July to

September 25, 2015 - Inside The GSEs

Freddie Will Be First to Use CSP, FHFA to Announce Date in 2016

Freddie Mac will be the first to use the Common Securitization Platform but the implementation date won’t be released until sometime in 2016, said the Federal Housing Finance Agency in a recent announcement. David Applegate, CEO of Common Securitization Solutions, the joint venture owned by Freddie and Fannie Mae, recently revealed that a large portion of the work has been completed to reach a major milestone in its progress. Applegate said at last week’s ABS East conference in Miami that CSS has completed about 90 percent of the work required for single-class security issuance by Freddie on the CSP. However, in an update detailing the progress in developing the CSP software, the FHFA stopped short of pinpointing a definite timeline and said...

September 25, 2015 - Inside The GSEs

FHLB Collateral Securing Advances Rose By Double Digits in 2014

The amount of collateral securing advances at the Federal Home Loan Banks increased by 12 percent, to $688 billion, at the end of 2014, according to a newly released report by the Federal Housing Finance Agency. The report provides details of the levels of collateral pledged to the FHLBanks securing advances. Listing was the most used form of collateral as of the end of 2014, and accounted for 49 percent of collateral pledged. This was followed by blanket pledges, a lien on all or specific categories of a member’s assets, which was 39 percent of collateral pledged. Both were up 2 percent from the previous years. The report noted that FHLBanks typically give members greater borrowing capacity when...

September 25, 2015 - Inside The GSEs

Senate Bill to Reverse GSE Salary Raise Passes Unananimously

Fannie Mae and Freddie Mac CEOs may not see a sizable pay hike after the Senate approved by unanimous consent a bill to reverse the raises for the GSE executives. The “Equity in Government Compensation Act” approved last week would suspend the $4 million compensation packages for Fannie’s Tim Mayopoulos and Freddie’s Don Layton that were approved early this year after the Federal Housing Finance Agency said the CEOs could be paid as much as $7.26 million. Their salary would now each be capped at the $600,000 they earned prior to the pay hike. That’s a lot less than many individuals in upper management at the GSEs. “Giving massive taxpayer-funded pay raises to Fannie Mae and Freddie Mac isn’t just out of touch, it’s...

September 24, 2015 - Inside Mortgage Finance

GSEs Look to Expand Risk-Sharing Efforts in Terms of Volume, Characteristics and Investors

Both of the government-sponsored enterprises are on track to meet the 2015 risk-sharing goals established by the Federal Housing Finance Agency with a quarter of the year to spare. Officials at Fannie Mae, Freddie Mac and the FHFA said the GSEs will continue to work to expand the risk-sharing efforts, which are popular among many investors in the secondary market. At the ABS East conference produced by Information Management Network last week in Miami, Scott Smith, an associate director of capital policy at the FHFA, said he would like to see continued efforts to broaden the investor base for risk-sharing transactions. More than 160 investors have bought...

September 18, 2015 - Inside Nonconforming Markets

Non-Agency MBS of Little Concern for GSE CSP

The Common Securitization Platform currently under development for use by the government-sponsored enterprises has seen some twists and turns regarding potential use for non-agency mortgage-backed securities. Various officials working on the CSP stressed this week at the ABS East conference in Miami that the focus for the platform is activity by Fannie Mae and Freddie Mac. “The platform is adaptable, but our focus is on the enterprises,” said David Applegate, CEO of Common Securitization Solutions, the Fannie Mae/Freddie Mac joint venture that is developing the CSP. At the conference produced by Information Management Network, he noted...

September 18, 2015 - Inside MBS & ABS

GSE Conservatorship Documents Remain Sealed, Discovery Extended in Shareholder Lawsuit Against U.S.

Documents pertaining to the conservatorship of Fannie Mae and Freddie Mac, and the controversial change that strips the government-sponsored enterprises of net worth, will remain sealed, under a September court order in a lawsuit filed by private GSE shareholders. Judge Margaret Sweeney’s ruling in Fairholme Funds v. The United States went in favor of the Federal Housing Finance Agency to keep the documents under “protected information,” denying a motion by Fairholme to release the documents. Charles Cooper, attorney with Cooper & Kirk, the law firm representing the investors, told...

September 18, 2015 - Inside MBS & ABS

CSS Says It’s Close to Completing Work for First Stage of Common Securitization Platform, Freddie to Test First

David Applegate, CEO of Common Securitization Solutions, revealed this week that the joint venture owned by Fannie Mae and Freddie Mac has finished much of the work for a major milestone in the common securitization platform. Although officials promised more information about the timeline next year, the government-sponsored enterprises’ use of the CSP – let alone the GSE single security – looks to be a ways off. At the ABS East conference produced by Information Management Network this week in Miami, Applegate said CSS has completed about 90 percent of the work required for single-class security issuance by Freddie on the CSP. Officials at CSS, the GSEs and the Federal Housing Finance Agency revealed this week that Freddie would be the first to test the system, and that Fannie would go on board at a later date, when issuance of the interchangeable single security will begin. The officials also noted...

September 17, 2015 - Inside Mortgage Finance

Progress of Private MI Industry May Depend on Details of NAIC’s Risk-Based Capital Standards

A stable private mortgage insurance industry is expected to emerge as the residential real estate market continues its recovery but uncertainty related to new risk-based regulatory capital standards from the National Association of Insurance Commissioners could derail or hinder progress, according to a new analysis by Fitch Ratings. So far, the MI industry has returned to profitability with more stability in the market and the continued presence of Fannie Mae and Freddie Mac in the residential market. Stronger regulatory standards bode well for the industry’s stability as well, Fitch noted. The long-term viability of the MI industry does not appear...

September 17, 2015 - Inside Mortgage Finance

Fannie and Freddie to Explore More Front-End Risk Sharing Transactions, Including Deep MI

Fannie Mae and Freddie Mac are expected to explore more front-end risk-sharing transactions while continuing to issue their popular debt offerings that pay investors based on the performance of reference pools of newly originated mortgages. Redwood Trust has done front-end risk-share deals with both Fannie and Freddie. The most recent was a transaction with Freddie in the third quarter, which covered a $1 billion pool and Redwood absorbing the first 1 percent of credit losses on the delivered loans. “Redwood expects...

September 17, 2015 - Inside Mortgage Finance

Jumbo Mortgage Production Up Sharply in 2Q15, Both Inside and Outside Agency MBS Programs

Originations of jumbo mortgages rose sharply during the second quarter of 2015, including loans in high-cost housing markets that are eligible for agency mortgage-backed securities, according to a new Inside Mortgage Finance ranking and analysis. During the second quarter, the market produced a whopping $127.6 billion of home mortgages that exceeded the $417,000 benchmark conforming loan limit, a 33.1 percent increase from the first three months of the year. Jumbo mortgages accounted for 28.7 percent of second-quarter originations, the highest ratio since “emergency” high-cost limits were set back in 2008. Most of the jumbo production was...[Includes three data tables]

September 11, 2015 - Inside The GSEs

FHFA and CFPB Make Small Changes to NMDB Project

The Federal Housing Finance Agency and the Consumer Financial Protection Bureau recently teamed up to release a joint technical report detailing the progress made so far in creating a National Mortgage Database. They also made a few changes including updating the sample design and merging with other data sources for more detailed information. The database has been in the works for 2.5 years but completion of the joint venture may still be a ways away. The NMDB will be a resource for research and analysis of the U.S. residential mortgage market. The database, the first mortgage data repository of its kind, according to the two agencies, includes information about the mortgage market based on a 5 percent sample of residential mortgages.

September 11, 2015 - Inside MBS & ABS

GSE Credit Risk Transfers Grow, Expand To Include More Reinsurance Deals

Freddie Mac’s Structured Agency Credit Risk deals and Fannie Mae’s Connecticut Avenue Security transactions have accounted for about 90 percent of risk transfers by the two government-sponsored enterprises. But the Federal Housing Finance Agency is pushing the GSEs to test new structures. FHFA said in a recent report that its longer term goal for the STACR and CAS products is for the GSEs to transition from debt issuance to credit-linked notes. That structure would be similar to enterprise debt issuances, but a trust would issue the note instead of the GSE. Principal and interest payments on the STACR and CAS debt issuances are...

September 11, 2015 - Inside MBS & ABS

SIFMA Presses FHFA to Align GSE Programs As Much as Possible, Set Timetable for Single Security

The heavyweight Wall Street group that sets the to-be-announced MBS standard is pushing federal regulators to take aggressive steps to keep Fannie Mae and Freddie Mac programs aligned as much as possible as the government-sponsored enterprises develop a new single security. In a sternly written letter to the GSE regulator, the Securities Industry and Financial Markets Association warned that the TBA market could be disrupted if Fannie and Freddie policies diverge too much under the new system in which the GSEs would issue fully-fungible securities. “If performance and credit risk are not aligned, then the securities will not be fungible and the market will not trade them as if they are,” the group said. SIFMA argues...

September 10, 2015 - Inside Mortgage Finance

Nonbanks Rebut Claims of Inadequate Regulation, Banks Claim Heavier Safety and Soundness Burden

There is no doubt that nonbank mortgage lenders are as heavily regulated as banks when it comes to consumer protection, some industry executives say, but the level of scrutiny for safety and soundness may be higher for depository institutions. The Community Home Lenders Association asserts that nonbanks are subject to more consumer protections than banks and have virtually identical regulatory burdens imposed by product regulations such as those for the FHA, VA, Ginnie Mae, Fannie Mae and Freddie Mac. “While nonbanks are heavily regulated at the state level, they are...

September 10, 2015 - Inside Mortgage Finance

Talks of Recapitalizing Fannie and Freddie Continue, New House Legislation May Be Released Soon

As they approach their eighth year in conservatorship, Fannie Mae and Freddie Mac generate a lot of revenue for the government and dominate the conventional-conforming mortgage market. But both government-sponsored enterprises are forced to hold less and less capital, and a bad quarter or two could force another round of bailouts. Aside from lawsuits by disgruntled GSE shareholders, pressure appears to be growing for a new approach that would allow the two to rebuild their capital. According to reports, Rep. Mick Mulvaney, R-SC, may introduce such a bill in one of the least hospitable places it could land, the House Financial Services Committee. As of press time Mulvaney’s office has not returned...

September 7, 2015 - Inside the CFPB

CFPB, FHFA Release Reports on National Mortgage Database

The CFPB and the Federal Housing Finance Agency jointly released two technical reports recently about the development of the National Mortgage Database (NMDB) and the quarterly National Survey of Mortgage Borrowers (NSMB). The NMDB project is a multi-year project being jointly undertaken by the two agencies. “The project is designed to provide a rich source of information about the U.S. mortgage market based on a five percent sample of residential mortgages,” the first technical report stated. The NMDB will enable the FHFA to meet current statutory requirements to conduct a national mortgage market survey, collect data on the characteristics of individual mortgages, including those eligible for purchase by Fannie Mae and Freddie Mac and those that are not, and including ...

September 4, 2015 - Inside MBS & ABS

FHFA, FDIC Securities Lawsuits Proceed, Other Cases Progress Toward Settlement

Legacy-era non-agency MBS litigation continues to be a ripe field of opportunity for U.S. regulators and industry attorneys alike, years after the financial crisis and Great Recession ended, thanks to some key recent judicial rulings. Late last month, Judge Alvin Thompson of the U.S. District Court for the District of Connecticut gave the green light to the Federal Housing Finance Agency to continue to pursue its claims against the Royal Bank of Scotland. The regulator for Fannie Mae and Freddie Mac alleged that RBS provided misleading statements related to $32.1 billion in RMBS the bank sold to the two government-sponsored enterprises between 2005 and 2008. The thrust of the FHFA’s complaint is...

September 4, 2015 - Inside MBS & ABS

HARP Refinance Volume Flat for Q2, Program Plugs Along Focusing on HARP-Rich States

Activity in the Home Affordable Refinance Program in the second quarter of 2015 was down 0.3 percent from the first three months of the year, according to new loan-count figures released by the Federal Housing Finance Agency. Fannie Mae had a slight increase in HARP activity and accounted for 59.3 percent of the total for the two government-sponsored enterprises. Freddie Mac volume was down 1.5 percent from the first quarter. HARP volume represented...[Includes one data table]

August 28, 2015 - Inside The GSEs

GSE Roundup

 Fannie Research Shows House Price Decline for Some Oil States: The prospect of an oil bust draws comparisons to the housing slump of the 1980s in Fannie Mae’s  research released Aug. 28. While most Americans enjoyed lower gasoline prices over that period, severe employment losses occurred within the oil industry, and many oil-producing states experienced general economic slowdowns and declining house prices. North Dakota, Wyoming and Alaska are most at risk.     …

August 28, 2015 - Inside The GSEs

SIFMA Seeks Clarity, Alignment in Single-Security, CSP Initiative

The Securities Industry and Financial Markets Association emphasized its concerns about the GSEs’ single security initiative in a letter sent last week to the Federal Housing Finance Agency. A large part of SIFMA’s letter focused on a lack of alignment between Fannie Mae and Freddie Mac. The trade group believes that the FHFA doesn’t have a strong enough role in maintaining the policy and practice alignment of the GSEs. “This causes significant concern about the potential outcome of the initiative,” the letter said, adding that the effective alignment of policies and practices, to achieve a continuing alignment to security performance, is the single most important factor in the success, or lack thereof, of the initiative.

August 28, 2015 - Inside The GSEs

FHFA Changes Low-Income Housing Goals for 2015 to 2017

The Federal Housing Finance Agency’s announcement last week that it will increase both the single-family low-income and multifamily low-income purchase goals was met with mixed reaction. In its final housing goals for Fannie Mae and Freddie Mac for 2015 through 2017, the single-family low-income goal was raised just one percentage point to 24 percent. But some housing industry groups weren’t necessarily happy with the single-family goal. “At 24 percent, the affordable housing goals fall short of what can and should be expected of Fannie Mae and Freddie Mac,” said Center for Responsible Lending President Mike Calhoun. “These companies have the capacity to reach a greater percentage of lower-wealth, creditworthy households, allowing borrowers to build wealth through homeownership.”

August 28, 2015 - Inside The GSEs

GSEs Losing Race for First-Time Homebuyers to FHA/VA Financing

First-time homebuyers make up a significant part of the purchase-mortgage market, but Fannie Mae and Freddie Mac have a hard time competing with Ginnie Mae, according to a new Inside The GSEs analysis of loan-level data.The three agencies securitized $118.90 billion of first-time buyer mortgages during the first six months of 2015, but Ginnie accounted for over half (52.4 percent) of the business. Ginnie’s big advantage is that it gets all the FHA and VA loans, while the GSEs so far have not gotten much traction in their reduced-downpayment programs. First-time buyers typically have less savings for a downpayment and often have less-stellar credit profiles. In the first half of this year, the average loan-to-value ratio for...(charts)

August 28, 2015 - Inside The GSEs

Manufactured Housing Sector Seeks More Lending From GSEs

The Federal Housing Finance Authoritys’ “duty-to-serve” rule, mandated by the 2008 Housing and Economic Recovery Act, is getting a lot of attention lately from manufactured housing industry leaders who argue that the GSEs aren’t purchasing enough of their loans. “Duty-to-serve” was created to encourage Fannie Mae and Freddie Mac to support underserved markets, especially those that included manufactured housing, along with rural housing and affordable housing preservation. Although it was mandated years ago, a final rule has not been implemented and the FHFA plans to re-propose the rule later this year.MH accounted for just 0.2 percent of Fannie’s and Freddie’s total business this year with the GSEs securitizing $896 million of manufactured housing loans in the first half of 2015, according to data analyzed by Inside The GSEs.


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TRID (Integrated Disclosures)
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