FHFA

Browse articles from all of our Newsletters related to FHFA.

December 9, 2016 - Inside MBS & ABS

Freddie Tests CSP

Freddie Mac successfully boarded many of its MBS issuance functions on the Common Securitization Platform on Nov. 21. The government-sponsored enterprise is now using the platform for its data acceptance, issuance support and bond administration activities, according to Freddie and the Federal Housing Finance Agency. Freddie reiterated...


December 2, 2016 - Inside FHA/VA Lending

FHA Raises Loan Limits for HECMs, Forwards; VA Follows Freddie Mac

The FHA this week announced higher “floor” and “ceiling” loan limits for forward and reverse mortgages for 2017, pushing loan limits upward in certain metropolitan statistical areas by as much as $162,500. The loan-limit changes will take effect on Jan. 1, spurred by rising median home prices. The Case-Shiller Home Price Index for September reported that home prices increased 5.5 percent year-over-year, driven by a tight supply of homes for sale, especially in the West. Each year, FHA recalculates its loan limits based on 115 percent of the median house price in the area. For counties located in MSAs, the loan limit is calculated based on the highest-cost county within the MSA. Under the 2017 changes, FHA will raise its nationwide “floor,” or low-cost area mortgage limits, for one-unit properties to $275,665 from $271,050, a difference of $4,615. In high-cost areas, the loan-limit ceiling for a ... [ 2 charts ]


December 2, 2016 - Inside Nonconforming Markets

Higher Loan Limits Take Small Non-Agency Bite

New loan limits for the government-sponsored enterprises in 2017 won’t have much of an impact on jumbo originations, according to an analysis by Inside Nonconforming Markets. The Federal Housing Finance Agency announced last week that the baseline conforming loan limit for Fannie Mae and Freddie Mac will increase in 2017, which will also boost the GSEs’ high-cost loan limit. The baseline conforming loan limit will increase to $424,100 in 2017, up from the $417,000 level it has ...


December 2, 2016 - Inside MBS & ABS

Courtrooms Attempt to Wrap Up Several MBS Lawsuits Stemming from Financial Crisis

Several pending mortgage lawsuits spawned by the housing crisis are inching closer to closure, including an apparent victory for Bank of America. The Department of Justice let the deadline pass to appeal a ruling from May in which BofA, defending practices of Countrywide Financial, escaped having to pay more than $1 billion in penalties to the Federal Housing Finance Agency. In 2014, a federal judge ordered...


December 1, 2016 - Inside Mortgage Finance

FHFA Increases Conforming Loan Limit Slightly For GSE Loans, Actual Impact is Debatable

The Federal Housing Finance Agency raised the maximum conforming loan limit for Fannie Mae and Freddie Mac mortgages in 2017 for the first time in a decade, but the impact on loan originations is questionable. Meanwhile, the FHA has not yet announced its 2017 loan limits. The baseline loan limit will go up for the first time since 2006, rising from $417,000 to $424,100. And the maximum high-cost loan limit for one-unit properties is climbing to $636,150, an increase of $10,650. The FHFA said that loan limits for the two government-sponsored enterprises will increase in all but 87 counties. An Inside Mortgage Finance analysis of Home Mortgage Disclosure Act data indicates...


November 25, 2016 - Inside The GSEs

GSE Roundup

FHFA 2017 Multifamily Lending Caps Unchanged: The Federal Housing Finance Agency announced that the 2017 multifamily lending caps for Fannie Mae and Freddie Mac will remain at the same level they were for 2016. Each will be subject to a cap of $36.5 billion of multifamily purchase volume. The FHFA expects the multifamily finance market to be roughly the same as it was in 2016. Fannie Bans Plywood in Foreclosures. Fannie Mae recently banned the use of plywood to secure vacant homes. Beginning early this month Fannie property foreclosures must be secured by a plywood alternative, such as clear boarding.


November 25, 2016 - Inside The GSEs

Investors Unite Panel Weighs in on GSE Risk-Sharing Cons

The GSEs’ credit-risk sharing program has expanded over the years but not everyone has been fond of the transactions designed to transfer risk away from Fannie Mae and Freddie Mac Tim Howard, a former Fannie CFO, has become one of the program’s biggest critics. He said today’s credit-risk transfer program, mandated by the Federal Housing Finance Agency, removes the “normal economic discipline” of a company making its own decisions about which risks to keep and which ones to share, and on what terms. He said that the CRT transactions being done today are nothing like those done during his time at Fannie, before the start of the conservatorship.


November 25, 2016 - Inside The GSEs

FHFA 2016 Performance Report Shows Improved Loan Quality

The quality of the GSEs’ portfolios continues to improve as the credit quality of new single-family business remains strong and delinquencies are down, according to the Federal Housing Finance Agency’s performance and accountability report for fiscal year 2016. But the agency said potential for a Treasury draw still looms. The report, released last week covers from October 2015 to September 2016 and highlights performance goals from the year. The average new single-family loan holds a weighted average credit score in the high 740s. There’s been a big improvement in delinquencies as loans that were seriously delinquent dropped considerably, down to 321,000. That’s a 25 percent decrease from a year earlier, when there were 426,000 seriously delinquent loans.


November 25, 2016 - Inside The GSEs

GSE Shareholder Case Attorney Details Pending Litigation

Fairholme Funds, the plaintiff in an ongoing GSE shareholder lawsuit, hosted a conference call late last week and dished on recent developments in the case. “Fannie Mae and Freddie Mac are obligated to protect the capital of all preferred shareholders, not just one of those shareholders, the Obama Treasury,” said Bruce Berkowitz, Fairholme’s CEO. Plaintiffs in Fairholme Funds Inc. v. United States, et al, argue that the U.S. Treasury’s net worth sweep of GSE profits is against the law. “And, really, only those who oppose the dream of American homeownership would attempt to dismantle two publicly traded, shareholder-owned companies that have single-handedly provided $7 trillion in liquidity to support America’s mortgage market since 2009,” he said.


November 25, 2016 - Inside The GSEs

Hensarling Calls for Greater Fannie, Freddie Accountability

House Financial Services Committee Chairman Rep. Jeb Hensarling, R-TX, called for greater accountability of the GSEs and discussed reintroducing his Dodd-Frank Act reform bill in the next Congress, during remarks in Washington last week. He said the GOP’s PATH (Protecting American Taxpayers and Homeowners) Act would help end the Fannie Mae and Freddie Mac bailout. The PATH Act, first introduced in 2013, proposes to phase out the GSEs within five years. In addition to ending the “costly” bailout, Hensarling said the bill would protect and restore the FHA to its defined mission, increase mortgage competition, enhance transparency, maximize consumer choice, and break down barriers to private investment capital.


November 25, 2016 - Inside The GSEs

GAO Report Says FHFA’s Goals for Fannie, Freddie are Inconsistent

The U.S. Government Accountability Office found that the Federal Housing Finance Agency’s strategic plan for the GSEs reflects a shift in priorities that has created more uncertainty. The GAO said the regulator revised the wording of the goals in the 2014 plan to align it more closely with FHFA’s statutory responsibilities. In the absence of an official post-conservatorship plan for Fannie Mae and Freddie Mac, the GAO was asked to examine the FHFA’s actions as conservator in a report highlighting the objectives needed for the future of the two companies after the conservatorship. The report noted that the FHFA increased its emphasis on maintaining credit availability and foreclosure prevention options, shifted away from...


November 25, 2016 - Inside The GSEs

FHFA Raises Maximum Conforming Loan Limit to $424,100

The Federal Housing Finance Agency raised the maximum conforming loan limit for GSE mortgages by $7,100 for 2017, amid rising home values. The new loan limit, announced Nov. 23, is $424,100 and represents the first time in a decade, since the housing downturn, that the conforming loan limit climbed above $417,000. The baseline loan limit was established by the Housing and Economic Recovery Act and is recalibrated each year to reflect the changes in a national home price index. Until now, the index has not risen above levels set in the third quarter of 2007.


November 23, 2016 - Inside Mortgage Finance

GSE Loan Limit Goes Up

The baseline conforming loan limit for Fannie Mae and Freddie Mac will climb to $424,100 in 2017, the first such increase since 2006. The 1.7 percent increase reflected a gain in the Federal Housing Finance Agency’s expanded-data house price index at the end of the third quarter. The new ceiling for high-cost markets will...


November 23, 2016 - Inside Mortgage Finance

FCC Denies MBA Petition Seeking Exemption From Protections Under Telephone Consumer Protection Act

The Federal Communications Commission last week denied a request from the Mortgage Bankers Association to exempt calls from mortgage servicers to borrowers from provisions of the Telephone Consumer Protection Act. Officials at the MBA said the denial was unexpected. Among other issues, the petition had received some support from the Consumer Financial Protection Bureau and the Federal Housing Finance Agency. The TCPA and FCC rules prohibit...


November 18, 2016 - Inside MBS & ABS

Groups Seek Broader SCOTUS Interpretation of CTS v. Waldburger, NY Allows MBS Case v. JPM

Three financial-industry trade associations submitted a joint amici brief to the Supreme Court of the U.S. seeking an end to the confusion over whether extender statutes that refer only to the “statute of limitations” should apply to the “statute of repose” as well. The circuit courts are split on the issue, with four courts deviating from a 2014 SCOTUS ruling in CTS v. Waldburger, in which property owners tried to hold CTS Corp., operator of an electronic plant in North Carolina, liable for damages from toxic contaminants on the land. The property owners filed...


November 18, 2016 - Inside MBS & ABS

Panelists Highlight Concern with Growing Fannie Mae, Freddie Mac Credit-Risk Sharing Program

The government-sponsored enterprises’ credit-risk transfer programs have been wildly popular with investors and many policymakers, but other industry observers see problems. One of the most outspoken critics is Tim Howard, a former Fannie Mae CFO, who sees a big difference between today’s CRT programs and the GSEs’ traditional method of laying off credit risk before they were taken into government conservatorship. “When I was at Fannie, the companies purchased...


November 11, 2016 - Inside The GSEs

Fairholme GSE Shareholder Case Battle Over Document Review


November 11, 2016 - Inside The GSEs

97 Percent LTV Programs Grew in 3Q, Usage Still Relatively Small

Fannie Mae and Freddie Mac low-downpayment programs have been in the market for almost two years now but they haven’t been getting a lot of mileage. Although numbers picked up in the third quarter, some say the programs need to be simplified in order to promote more usage. The GSEs purchased $10.31 billion of purchase mortgages with loan-to-value ratios of 96 to 97 percent through Sept. 30, 2016, according to an Inside Mortgage Finance analysis of mortgage-backed securities data. However, nearly half of that came in the third quarter, which saw a 52.7 percent jump from the previous period. Fannie’s HomeReady program and Freddie’s Home Possible Advantage products were designed to help creditworthy, low- and moderate-income buyers.


November 11, 2016 - Inside The GSEs

FHFA Talks Fannie and Freddie Alignment, Competition

Promoting alignment between Fannie Mae and Freddie Mac and the programs offered, versus competition, is a balancing act, according to Bob Ryan, Federal Housing Finance Agency acting deputy director, division of conservatorship. He spoke about the single security during a housing panel sponsored by the Urban Institute and Core Logic last week. Ryan said that it’s important to consider what the implications might be for investors when deciding whether to have the GSEs align or compete in their programs and activities. Freddie is on track to implement the single security in the fourth quarter of 2017, he said. That change will put Freddie’s existing securities on the new platform.


November 11, 2016 - Inside The GSEs

Current Housing Market Supports Higher Conforming Loan Limits

As home prices have recovered and the end of the year nears, there is talk of whether the conforming loan limits will change for 2017. BlackKnight Financial Services said there is a need for an increase and examined how it could affect mortgage origination volumes. The $417,000 loan limit has remained unchanged for the most part since 2006. The Housing and Economic Recovery Act of 2008 established the baseline loan limit at $417,000, and stipulated that after a period of price declines, the baseline loan limit can’t rise again until home prices return to pre-decline levels. Last November, the Federal Housing Finance Agency determined that the maximum loan limits for the GSEs would remain at existing levels throughout...


November 11, 2016 - Inside The GSEs

GSE Earnings Up Again in 3Q, Groups Renew Recap Calls

Fannie Mae and Freddie Mac posted combined net income of $5.53 billion for the third quarter of 2016, representing their strongest cycle since the second quarter of 2015. Despite a mandated declining portfolio, the GSEs are beneficiaries of strong guarantee fees, which help drive income. Freddie more than doubled its net profit from the previous quarter to $2.33 billion. This was the company’s best performance since the $4.17 billion earned in the second quarter of 2015. Freddie attributed the gain to robust g-fee income and a steep reduction in hedging losses. Fannie’s net income was up for the quarter to $3.20 billion, also its strongest since earning $4.64 billion back in the second quarter of last year, and up from...


November 11, 2016 - Inside MBS & ABS

GSE Shareholders Spar With Government Agencies Over Timing of Document Release

Over the past couple of weeks, a battle has been brewing over the government’s response to a court order to release dozens of documents regarding the U.S. Treasury’s net worth sweep of Fannie Mae and Freddie Mac profits. Plaintiffs in Fairholme Funds Inc. v. United States, et al, filed an emergency enforcement motion arguing that the government is purposely taking too long to produce the documents and requesting unnecessary extensions. Federal Claims Court Judge Margaret Sweeney ordered the Federal Housing Finance Agency and the Treasury to turn over 56 documents to the plaintiff’s attorney, under seal, back in mid-September. The agencies had been...


November 11, 2016 - Inside MBS & ABS

Market Left With Little Clue as to Fate of Fannie, Freddie Under Incoming Trump Administration

Market analysts, observers and participants alike feel pretty much in the dark about what to expect from Republican President-elect Donald Trump when it comes to the fate of government-sponsored enterprises Fannie Mae and Freddie Mac. “Mortgage finance legislation and the future of the GSEs was never discussed during the campaign so there are no clear indicators of what a Trump administration will do regarding the future of Fannie Mae and Freddie Mac,” analysts at Keefe, Bruyette & Woods said in a post-election review. Complicating life for the new regime is...


November 10, 2016 - Inside Mortgage Finance

Analysts Believe Further MIP Cuts Doubtful But Stronger MMI Fund May Convince Them Otherwise

The question of whether FHA should do another mortgage insurance premium reduction is pretty much on stakeholders’ minds as they anticipate the release of the annual actuarial review of the Mutual Mortgage Insurance Fund next week. Analysts, however, are not ready to change their opinion that further MIP cuts are unlikely. Some analysts said they would reconsider their views if the upcoming report showed strong growth in the MMI Fund, while others believe FHA’s priorities today are different than they were in early 2015, when the agency cut the annual premium for forward mortgages to 0.85 percent. The FHA’s decision to lower the annual MIP was spurred...


November 10, 2016 - Inside Mortgage Finance

GSE Low-Downpayment Program Numbers Still Too Low to Report, FHFA Researching Obstacles

Low-downpayment programs introduced by Fannie Mae and Freddie Mac almost two years ago have been slow to gain traction. According to an Inside Mortgage Finance analysis of mortgage-backed securities data, the two government-sponsored enterprises purchased $10.31 billion of purchase mortgages with loan-to-value ratios of 96 to 97 percent during the first nine months of 2016. However, nearly half of that came in the third quarter, which saw a 52.7 percent jump from the previous period. Bob Ryan, acting director of the Federal Housing Finance Agency’s division of conservatorship, said...


November 3, 2016 - Inside Mortgage Finance

New Approaches to Front-End GSE Risk-Sharing Being Explored as Some Lenders Question Bigger PMI Role

Many industry experts are advising Fannie Mae and Freddie Mac to expand so-called front-end approaches to credit-risk transfers that have so far relied heavily on structured debt notes and reinsurance contracts arranged long after loans are sold to the two government-sponsored enterprises. In a comment letter filed with the Federal Housing Finance Agency, Redwood Trust suggested that “a more robust front-end CRT program [should] at least match the volume of back-end transactions.” Through the end of September, Fannie and Freddie have issued $35.88 billion of back-end debt notes covering $1.223 trillion of single-family mortgages, according to Inside MBS & ABS, an affiliated newsletter. Redwood is...


October 28, 2016 - Inside The GSEs

Cato Supports Freddie CFO Golden Parachute Appeal

The Cato Institute recently filed an amicus brief challenging the Federal Housing Finance Agency’s denial of compensation benefits to a former Freddie Mac CFO at the start of the conservatorship. The FHFA terminated Anthony Piszel two weeks after the government took over the GSEs in September 2008. The primary issue was whether a government prohibition on making golden parachute (severance) payments to terminated Freddie employees was illegal or not. Piszel appealed a judgment from the U.S. Court of Federal Claims dismissing his complaint that Freddie breached its contract and owed him payment for his golden parachute compensation.


October 28, 2016 - Inside The GSEs

FHFA Director Watt Offers 2017 GSE Scorecard Preview

Federal Housing Finance Agency Director Mel Watt said access to credit and supporting underserved markets will be among the goals outlined for the GSEs next year. Although the FHFA will not release a 2017 GSE scorecard until yearend, Watt, speaking at this week’s annual Mortgage Bankers Association convention in Boston, offered a preview of what Fannie Mae and Freddie Mac will focus on in the coming year. Watt said he expects the GSEs to ramp up research efforts to increase responsible access to credit and affordable housing. He said the average credit scores for GSE purchase loans remain historically high. “Based on the work they have already done and this additional research, we’ll be asking them to...


October 28, 2016 - Inside MBS & ABS

Fannie, Freddie May Need a Strong December to Exceed $100 Billion in Multifamily by Year’s End

Thanks to increasing market demand and two expansions of their scorecard caps courtesy of the Federal Housing Finance Agency, Fannie Mae and Freddie Mac could do more than $100 billion in combined issuance of multifamily MBS by the end of 2016 – if they have a strong December, that is. According to Inside MBS & ABS figures, Fannie’s new multifamily MBS issuance in the first nine months of 2016 was up 18.4 percent from the same period last year. Josh Seiff, vice president of multifamily capital markets and trading at Fannie, was...


October 28, 2016 - Inside MBS & ABS

GSE Officials Are Eager to Expand Risk-Transfer Program But Show Little Interest in Deeper MI

Fannie Mae this week joined Freddie Mac in announcing a front-end credit-risk transfer pilot that will use additional levels of private mortgage insurance, but the so-called deep MI option looks like a long shot. “Credit-risk transfer is the next big thing, and though we’re already three years into it, it’s still very much a work in progress,” said Donald Layton, Freddie’s CEO, during the annual convention of the Mortgage Bankers Association in Boston this week. “About 50 percent of the credit risk that’s coming in is...


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