Browse articles from all of our Newsletters related to FHFA.

December 12, 2014 - Inside The GSEs

FHFA Updates, Clarifies FHLB Capital, Stock Requirements

The public comment period closed this week on a Federal Housing Finance Agency proposed rule that updates and clarifies the requirements for Federal Home Loan Bank capital stock and capital plans. The proposal is mostly a housekeeping change, shifting regulations from the old Federal Housing Finance Board rulebook to the FHFA. “The proposed rule would not make any substantive changes to these requirements, but would delete certain provisions that applied only to the one-time conversion of bank stock to the new capital structure,” the agency said. None of the FHLBanks commented on the proposal, which would align the rules better with long-standing practices for transactions in FHLBank stock. Most significantly, the proposed rule would add appropriate references to “former members” ...

December 12, 2014 - Inside The GSEs

FHFA Readies Liquidity Standards For Nonbank Seller Servicers

Fannie Mae and Freddie Mac are watching with some concern the growing role of nonbank servicers, and their regulator is drafting new standards for these counterparties. “The shift from depository to non-depository servicers poses additional risks to us,” Fannie said in its third-quarter 10-Q filing. “Non-depository servicers may have a greater reliance on third-party sources of liquidity and may, in the event of significant increases in delinquent loan volumes, have less financial capacity to advance funds on our behalf or satisfy repurchase requests or compensatory fee obligations.” The fast growth of many of these nonbank servicers poses “increased operational risk, which could negatively impact their ability to effectively manage their servicing portfolios,” Fannie said. Nonbank servicers – especially “specialty” companies – are ...

December 12, 2014 - Inside The GSEs

Sen. Warren Critical of FHFA, Fannie/Freddie Policies

A hearing by a subcommittee of the Senate Committee on Banking, Housing and Urban Affairs turned into a showcase for Sen. Elizabeth Warren, D-MA, to criticize Fannie Mae, Freddie Mac and the Federal Housing Finance Agency. “To be blunt, Fannie and Freddie have put homeownership out of the reach of millions of creditworthy families,” Warren said at a hearing by the Banking Subcommittee on Housing, Transportation and Community Development. She focused on average credit scores for mortgages delivered to the GSEs. “In 2012, the average credit score associated with a mortgage purchased by Fannie or Freddie was over 760,” Warren said. “That is more than 50 points higher than the average credit score associated with the mortgages they purchased back ...

December 12, 2014 - Inside The GSEs

FHFA Pushes Back on OIG Counterparty Recommendation

The Federal Housing Finance Agency issued an advisory bulletin last week detailing the GSEs’ responsibilities for managing counterparty risks. FHFA Advisory Bulletin 2014-07 states that each enterprise should “assess financial, operational, legal, compliance, and reputation risks associated with its single-family seller/servicer counterparties and take appropriate action to mitigate those risks or reduce the enterprise’s exposure. Toward this end, each enterprise should implement a board-approved risk management framework that specifically includes risk-based oversight of single-family seller/servicers.” Anne Canfield, executive director of the Consumer Mortgage Coalition, said the bulletin could relate to an audit report released in September by the FHFA’s Office of Inspector General. The OIG report directed Fannie Mae and Freddie Mac to assess the cost/benefit of a risk-based approach ...

December 12, 2014 - Inside The GSEs

FHFA Orders GSEs to Start Contributing to Trust Funds

Fannie Mae and Freddie Mac will send about $290 million to two federal trust funds next year following a controversial decision by the Federal Housing Finance Agency to reverse a 2008 decision by its former top official. It’s no surprise that FHFA Director Mel Watt, a former Democratic member of the House, decided to end the “temporary” ban on GSE contributions to the Housing Trust Fund and Capital Magnet Fund. The reaction to this week’s announcement was predictable as well: a leading House Republican railed against it, while community advocates praised it. The contribution formula calls for Fannie and Freddie to send amounts equal to 4.2 basis points of the principal balance of their new business to the funds. Based ...

December 11, 2014 - Inside Mortgage Finance

Treasury Calls for Servicing Reforms Beyond Capital Requirements, Including Changes to Compensation

The migration of mortgage servicing rights from “more tightly to less tightly regulated parts of the financial system” should be addressed by regulators, according to the Treasury Department’s Office of Financial Research. The OFR, which was created by the Dodd-Frank Act to serve the Financial Stability Oversight Council, said Basel capital requirements have created incentives for banks to sell MSRs to nonbanks. In its annual report, the OFR cautioned that nonbanks aren’t as well regulated as banks. “Mortgage servicing activity and the accompanying risks appear...

December 5, 2014 - Inside FHA Lending

FHA to Share in Landmark BofA Settlement

The FHA and Ginnie Mae will share in the record-setting $16.7 billion settlement between Bank of America, the Department of Justice and certain other federal agencies and six states to resolve claims related to mortgage fraud and toxic mortgage-backed securities. The FHA will receive approximately $800 million and an undisclosed amount for consumer relief from BofA. The bank was accused of falsely certifying poorly underwritten loans for FHA insurance, resulting in huge losses for the agency. It is unclear how much Ginnie Mae’s share would be from the settlement. “As a direct endorser of FHA-insured loans, Bank of America performs a critical role in home lending,” said U.S. Attorney Loretta Lynch for the Eastern District of New York during the announcement of the global settlement in August. “In obtaining a payment of $800 million and sweeping relief for troubled homeowners, we have not ...

December 5, 2014 - Inside Nonconforming Markets

Little Help for Non-Agency Market from FHFA

Proponents of the non-agency market have seen little help in recent actions by the Federal Housing Finance Agency. The FHFA continued its practice of maintaining high-cost loan limits for the government-sponsored enterprises and the FHFA’s strategic plan puts an emphasis on “preserving and conserving” the GSEs’ assets. Last week, the FHFA announced that conforming loan limits for 2015 will be largely unchanged compared with loan limits for 2014. Loan limits will increase ...

December 5, 2014 - Inside MBS & ABS

SFIG to FHFA: Implementation of Single GSE Security Should Proceed Ahead of Congress, Transparency a Must

The Federal Housing Finance Agency should not wait for Congressional reform and should instead move at a deliberate pace to implement a single government-sponsored enterprise MBS, according to the Structured Finance Industry Group. SFIG staff and several members met with FHFA officials this week to discuss the potential transition to a single, common security between Fannie Mae and Freddie Mac. In August, the FHFA proposed...

December 4, 2014 - Inside Mortgage Finance

FHFA Policy Directive Allows Some Former Foreclosed Borrowers to Purchase Home From Fannie, Freddie REOs

Some foreclosed homeowners may have the option to repurchase their homes at fair market value following a new directive from the Federal Housing Finance Agency that calls for the two government-sponsored enterprises to relax policies related to the sale of real estate owned properties to defaulted borrowers. The two government-sponsored enterprises until now have required foreclosed borrowers that want to purchase their home from REO inventory to pay the full amount of the unpaid debt on their previous mortgage. “This is...

December 4, 2014 - Inside Mortgage Finance

FHFA Advisory Bulletin Outlines Risk-Based Oversight Framework for Fannie, Freddie

Fannie Mae and Freddie Mac should each implement a board-approved risk-management framework that specifically includes risk-based oversight of single-family seller/servicers, according to an advisory bulletin issued this week by the Federal Housing Finance Agency. The new “supervisory expectation” covers numerous seller/servicer oversight activities that the government-sponsored enterprises have done for years, albeit pulling them all together under a comprehensive framework. It implements a recommendation made by the FHFA inspector general in July, which expressed concern that the regulator is not paying enough attention to the financial condition of certain nonbank servicers that make up a growing share of Fannie/Freddie business. “FHFA expects...

December 4, 2014 - Inside Mortgage Finance

FHFA Still Working on Capital and Liquidity Standards For Nonbanks; A December Unveiling Pushed Into 2015?

The Federal Housing Finance Agency is continuing to work on new standards that will dictate not only how much capital nonbank servicers must retain, but how much in liquidity reserves they will need, according to industry analysts and advisors familiar with the topic. Moreover, these officials believe that some type of unveiling of those standards – originally planned for December – has been pushed into the first quarter of 2015. “One problem [the] FHFA is facing is...

December 4, 2014 - Inside Mortgage Finance

Refinance Originations Gained Some Momentum In 3Q14 as Purchase Market Began to Cool

Mortgage lenders have been chasing purchase-mortgage business since the refinance market started to subside early in 2013, but the refi sector showed considerable strength during the third quarter of this year, according to a new Inside Mortgage Finance ranking and analysis. Refinance originations increased by 21.4 percent from the second quarter to the third, with an estimated $136 billion in production volume. At the same time, purchase-mortgage originations rose by just 5.6 percent, to an estimated $209 billion. Refi lending is...[Includes five data charts]

November 26, 2014 - Inside The GSEs

Fannie Prices Its Fourth CAS Deal Of 2014; Backed by $53.8B UPB

Fannie Mae has priced its final risk-sharing transaction of the year, a nearly $1.5 billion offering that priced wider than previous deals, the GSE announced last week. The $1.49 billion note is the GSE’s fourth transaction under its Connecticut Avenue Securities series of 2014. Last year, the Federal Housing Finance Agency ordered both Fannie Mae and Freddie Mac to shrink the GSEs’ role in the U.S. housing market.

November 26, 2014 - Inside The GSEs

FHFA: CSP Moving Forward, Senators Seek More Transparency

Fannie Mae and Freddie Mac are testing parts of the new common securitization platform and are expected to have the system largely built in 2015. But the GSEs have a lot of work to do building interfaces for their systems to work with the new platform while the joint venture that’s running the CSP won’t be functional for several years, according to two recent Federal Housing Finance Agency reports.

November 26, 2014 - Inside The GSEs

FHFA COO Acquitted of Charges He Threatened Former FHFA Director

The case against the Federal Housing Finance Agency’s chief operating officer ended last week after a Washington, DC, Superior Court judge found Richard Hornsby not guilty of making violent threats against former FHFA Acting Director Edward DeMarco.Judge Juliet McKenna acquitted Hornsby of two misdemeanor charges of attempted threats to do bodily harm to DeMarco.

November 26, 2014 - Inside Mortgage Trends

G-Fee Terrain Leveled Dramatically in 2013

Fannie Mae and Freddie Mac guarantee fee pricing disparities were dramatically leveled out in 2013, according to data released by the Federal Housing Finance Agency. In 2010 and 2011, small lenders typically paid about 10 basis points more in g-fees to the government-sponsored enterprises than did the five largest lenders in the market, the report shows. In 2012, the disparity fell to about 6 bps. Last year, it was down to 2 bps. Small lenders – defined as those that ranked outside the top 100 GSE sellers – paid an average of 53 bps, while the top five sellers paid 51 bps. Three more lender groups based on size that fell between the two extremes paid average fees of 51 or 52 bps....

November 26, 2014 - Inside The GSEs

New Fannie, Freddie Rep & Warrant Framework Favorably Received

Both Fannie Mae and Freddie Mac, at the direction of the Federal Housing Finance Agency, last week rolled out changes to their selling representation-and-warranty frameworks in an effort to reduce lenders’ concerns about when they might be asked to repurchase a loan. The GSEs noted that some lenders were concerned about repurchase risk and other market factors causing an increase in credit overlays, which has limited access to credit for potential creditworthy borrowers.

November 26, 2014 - Inside The GSEs

FHFA Tweaks REO Policy to Allow ‘Qualified’ Foreclosure Repurchase

The Federal Housing Finance Agency this week unveiled a policy alteration that would potentially allow a foreclosed homeowner to purchase a home – including one he/she lost due to arrears – from the real estate owned inventory of Fannie Mae or Freddie Mac. The change will permit Fannie and Freddie to sell existing REO properties to any qualified purchaser at the property’s fair-market value, as determined by the GSE, according to the FHFA.

November 26, 2014 - Inside The GSEs

FHFA: Final G-Fee Decision Due 1Q15, 2013 Hikes Unevenly Spread

As the Federal Housing Finance Agency prepares a new guaranty fee framework to unveil in early 2015, a report issued by the FHFA last week noted that big g-fee increases in 2013 were not spread evenly across the market. According to the FHFA’s sixth annual study, average mortgage-backed security g-fees charged by Fannie Mae and Freddie Mac jumped from 36 basis points in 2012 to 51 bps last year.

November 26, 2014 - Inside The GSEs

Watt Says: Under 100 FHLBank Members Affected by Rule Changes

Fewer than 100 financial institutions could be adversely affected by a proposed Federal Housing Finance Agency rule to tweak membership criteria for the 12 Federal Home Loan Banks, the agency’s head told the Senate Banking, Housing and Urban Affairs Committee last week. In his first oversight hearing appearance since assuming office in January, FHFA Director Mel Watt said the agency’s “preliminary review” has found of the 7,500 FHLBank member institutions less than 100 may potentially be negatively impacted.

November 26, 2014 - Inside The GSEs

Calls to End GSE Conservatorships Mount From Different Sources

The Obama administration noted this week that it is less than keen on the idea of taking up an outgoing Democrat senator’s call to end the six-plus year conservatorships of Fannie Mae and Freddie Mac. Last week, Senate Banking, Housing and Urban Affairs Committee Chairman Tim Johnson, D-SD, suggested the GSEs’ conservatorship be ended if legislative reform is not forthcoming.

November 26, 2014 - Inside MBS & ABS

FHFA: Extensive ‘Testing’ Underway at GSE Common Securitization Platform, An ‘Important Priority’ in 2015

The development of a common securitization platform for Fannie Mae and Freddie Mac and the progression of a single government-sponsored enterprise security remains an “important priority” for the Federal Housing Finance Agency over the next year, according to the FHFA. The GSE conservator noted in its “2014 Performance and Accountability Report” and the FHFA’s revised “Strategic Plan: Fiscal Years 2015-2019,” both issued last week, that the project is proceeding with deliberate speed. “Most of the software needed for the platform’s core functionality has been put...

November 26, 2014 - Inside Mortgage Finance

GSE Loan Limits Mostly Unchanged for 2015

The Federal Housing Finance Agency this week said that conforming loan limits for Fannie Mae and Freddie Mac in 2015 would remain at current levels in most markets. Some 46 counties will get...

November 26, 2014 - Inside Mortgage Finance

Lenders Satisfied So Far With Fannie, Freddie Reps- And-Warrant Relief But More Clarifications Expected

Industry groups say they are generally pleased with last week’s more detailed update to Fannie Mae’s and Freddie Mac’s representation-and-warranty framework, but lenders remain expectant of additional details from the Federal Housing Finance Agency going forward. The new rules, retroactive to January 2013, provide that lenders might not be required to repurchase loans that contain data inaccuracies or misrepresentations of buyers’ qualifications, unless those inaccuracies and misrepresentations are “significant” or appear in multiple loans. The clarifications of life-of-loan exclusions announced by the government-sponsored enterprises are designed...

November 26, 2014 - Inside Mortgage Finance

Mortgage Industry Braces for Nonbank Capital ‘Standards’ From State Regulators; How Binding Will They Be?

Nonbank mortgage servicers are bracing for an onslaught of new capital recommendations from the Conference of State Bank Supervisors, which could see the light of day in early 2015. But the industry did receive one piece of good news: although the CSBS is working on what it calls “options for prudential standards,” the organization will not be addressing capital for nonbank originators, a CSBS official told Inside Mortgage Finance. The group is...

November 21, 2014 - Inside Nonconforming Markets

REITs Tout Non-Agency Benefit of FHLBanks

Prohibiting real estate investment trusts from joining the Federal Home Loan Bank system would hurt efforts to revive the non-agency market, according to two REITs that have gained access to FHLBank financing. Officials at both Two Harbors Investment and Redwood Trust said FHLBank advances helped the REITs fund originations of jumbo mortgages in the third quarter of 2014. Both companies recently gained access to FHLBank advances via captive insurance entities ...

November 21, 2014 - Inside MBS & ABS

MBS Pioneer Ranieri Active in the Single-Family Rental Space, But With a Twist; Can an MBS Deal Be at Hand?

Home Partners of America, a single-family rental company affiliated with MBS veteran Lewis Ranieri, has been quietly gobbling up homes across the U.S., and may have its eye on tapping the securitization market. “They are very active,” said one associate close to Ranieri, who spoke under the condition his name not be used. Moreover, Home Partners – formerly known as Hyperion Homes LLC – recently received...

November 21, 2014 - Inside MBS & ABS

Watt: GSE G-Fees Not ‘Most Important Factor’ to Bring Back Private Capital; CSP, Single Security Progresses

The head of the Federal Housing Finance Agency told Senate Banking, Housing and Urban Affairs Committee members this week that a decision on Fannie Mae and Freddie Mac guaranty fees will come soon after the New Year. In his first oversight hearing since taking the reins of the agency in January, FHFA Director Mel Watt stated during questioning that the regulator of the government-sponsored enterprises will make its move on g-fees during the first quarter of 2015. In one of his first acts as FHFA director, Watt postponed...

November 21, 2014 - Inside MBS & ABS

GSE Guaranty Fee Hikes in 2013 Hit Purchase Business, Marginal Credit Borrowers Harder

Average MBS guaranty fees charged by Fannie Mae and Freddie Mac jumped from 36 basis points in 2012 to 51 bps last year, according to an annual study by the Federal Housing Finance Agency that was released late this week. But the impact of the fee hikes was not spread uniformly across the government-sponsored enterprises’ business. The report shows that the estimated average g-fee on purchase mortgages climbed from 40 bps in 2012 to 55 bps last year. The average fee for refinances rose slightly less, by 14 bps, for both rate-term deals (48 bps in 2013) and cash-out refinances (53 bps last year). According to the FHFA study sample, the purchase business rose...

November 20, 2014 - Inside Mortgage Finance

Sen. Johnson Calls for End of Conservatorships, Dems Push Watt Hard on GSE Principal Reduction

The outgoing chairman of the Senate Banking, Housing and Urban Affairs Committee this week urged the head of the Federal Housing Finance Agency to look to a final resolution of Fannie Mae and Freddie Mac, while the progressives on the panel pressed the regulator and former Democrat congressman hard to approve principal reductions. “Everyone agrees that conservatorship cannot continue forever, so I hope my colleagues will keep working towards a more certain future for the housing market,” said Sen. Tim Johnson, D-SD, during a hearing with FHFA Director Mel Watt this week. But if “Congress cannot agree on a smooth, more certain path forward I urge you, Director Watt, to engage the Treasury Department in talks to end the conservatorship.” Watt did not address...

November 14, 2014 - Inside The GSEs

GSEs Crank Out Profits in 3Q 2014, Freddie Warns of ‘Volatile’ Earnings

Fannie Mae and Freddie Mac reported a combined $6.0 billion in net income for the third quarter of 2014, up from $5.1 billion in the previous quarter. The two GSEs will send to the Treasury $6.8 billion as return on the government’s senior preferred stock. That will bring cumulative payments under the GSE conservatorships to $225.5 billion. Fannie and Freddie were given a total of $187.4 billion in government funds in order to stay in business.

November 14, 2014 - Inside The GSEs

Enterprise Endnotes

Ohio Court Sides With Freddie in Pre-Crisis Shareholder Lawsuit. An Ohio federal court late last week tossed out a shareholder class action lawsuit that accused Freddie Mac of lying about its exposure to subprime loans prior to the 2008 financial crisis. The suit, filed in 2008 by the Ohio Public Employees Retirement System, claimed that Freddie artificially inflated the value of its common stock by making false public financial statements that obscured its subprime exposure.OPERS claimed it lost as much as $27.2 million as a result of Freddie’s alleged cover-up of its subprime exposure.

November 14, 2014 - Inside The GSEs

MBA: FHFA Should Consider Other GSE Credit Score Models

The Mortgage Bankers Association is calling on the Federal Housing Finance Agency to direct Fannie Mae and Freddie Mac to review “and if appropriate” adopt new validated credit score models and allow for the use of alternative methods of scoring. In a letter last week to FHFA Director Mel Watt, the MBA said that, through this action, the Finance Agency could directly increase the number of borrowers eligible for conventional mortgages.

November 14, 2014 - Inside The GSEs

FHFA Taps New CEO, GSE Board for Common Securitization Solutions

After a year of looking, the Federal Housing Finance Agency announced last week it has finally picked a chief executive to run the fledgling Common Securitization Solutions: industry veteran David Applegate, who has a long resume in mortgage banking. Applegate led both GMAC Mortgage and GMAC Bank during a 17-year career at General Motors Acceptance Corp He also worked at mortgage insurer Radian Guaranty. Applegate’s last job title was president and chief executive officer of Homeward Residential, Dallas, a mortgage-banking firm.

November 14, 2014 - Inside The GSEs

Experts: Fannie, Freddie Risk Transfers Building Momentum

The GSE risk-sharing market is building momentum and investors indicate there is a growing demand for this product going forward, industry insiders told attendees of an Urban Institute/CoreLogic housing forum last week. In its most recent strategic plan for the GSEs, the Federal Housing Finance Agency is calling on Fannie Mae and Freddie Mac to reduce their exposure to risk by tripling the amount of credit-risk transfers they conduct on their single-family business from $30 billion last year to $90 billion in 2014.

November 14, 2014 - Inside The GSEs

FHFA’s Watt to Be Questioned By Senate Banking Committee

Federal Housing Finance Agency Director Mel Watt will be on the hot seat next week when he is slated to testify before the Senate Banking, Housing, and Urban Affairs Committee. The oversight hearing – titled “The Federal Housing Finance Agency: Balancing Stability, Growth, and Affordability in the Mortgage Market” has Watt listed as the only witness when the committee convenes on Wed., Nov. 19, at 10 a.m.

November 14, 2014 - Inside The GSEs

GOP Congressional Sweep Not Necessarily a Boon for GSE Reform

Expect GSE reform to remain a key focus of Congress following the mid-term election Republican takeover of the Senate and vast expansion in its House majority. However, industry observers warn that it remains to be seen whether focus will translate into legislative action during the 114th Congress as the new leadership structure remains in flux.

November 14, 2014 - Inside The GSEs

DeMarco: ‘Housing-Industrial Complex’ Inhibits GSE Reform

Effective and lasting GSE reform cannot be accomplished without Congress taking decisive action and the housing finance market’s status quo is unsustainable in the long term, according to the former head of the Federal Housing Finance Agency. Speaking at an American Enterprise Institute forum late this week, former FHFA Acting Director Edward DeMarco warned attendees to expect comprehensive and lasting housing finance reform to remain stalled unless lawmakers pass a bill that the president will sign.

November 14, 2014 - Inside MBS & ABS

Freddie Mac Makes Progress on Securitizing ‘Re-performers’; An MBS Backed by NPLs?

Through the first nine months of 2014, Freddie Mac securitized $7.0 billion of re-performing and modified single-family loans, a figure that towers over its crosstown rival Fannie Mae. Since 2011, Freddie has issued roughly $12 billion in securities backed by re-performing loans. So what’s Fannie’s problem in this area? That’s hard to say. A spokesman for the government-owned mortgage giant said the company has yet to undertake any securitizations of formerly delinquent loans, and isn’t sure if or when it will. Then again, Fannie – unlike Freddie – has...

November 14, 2014 - Inside MBS & ABS

Fannie, Freddie MBS Portfolios Will Continue Shrinking Following Profitable Third Quarter

Fannie Mae and Freddie Mac continued to trim their retained holdings of MBS and unsecuritized mortgages in keeping with their conservatorship mandate as the two government-sponsored enterprises each posted a profit during the third quarter of 2014. The two GSEs ended September with a combined $851.71 billion in mortgage-related holdings, down 2.4 percent from the previous quarter. Compared to a year ago, their combined mortgage portfolio was down 16.0 percent and down 46.5 percent from the $1.592 trillion the two firms held in the fourth quarter of 2008 shortly after being placed in government conservatorship. One of the conditions of the conservatorship the GSEs entered six years ago was...[Includes one data chart]

November 13, 2014 - Inside Mortgage Finance

New Fannie 97 to be Based on Current Underwriting And Documentation Rules, Private MI Assessment

Income documentation and other standards that have been in place since Fannie Mae entered conservatorship in 2008 will apply to the company’s new 3 percent downpayment product, and loan assessment by a private mortgage insurer will be crucial, according to a company spokesman. The spokesman said details will be announced shortly. Fannie Mae is working with the Federal Housing Finance Agency to design the government-sponsored enterprise’s revamped 97 percent loan-to-value product. Sources said previous requirements for a standard 97 LTV product, which Fannie offered until November 2013, are being considered. The FHFA announced...

November 7, 2014 - Inside FHA Lending

Reinstating 97s Could Delay Recovery for MMIF

Reinstating the government-sponsored enterprises’ conventional 97 percent loan-to-value mortgage programs would benefit first-time homebuyers and borrowers with little or no cash reserves for a downpayment but adversely affect the FHA Mutual Mortgage Insurance Fund, according to analysts. If limited to first-time homebuyers, a conventional 97 LTV loan would offer some new homeowners better home loan financing than FHA and provide greater access to mortgage credit, said analysts with Bank of America Merrill Lynch. For years, Fannie Mae offered conventional 97 LTV loans through its MyCommmunityMortgage to help first-time homebuyers purchase a home with only a 3 percent downpayment. It was a better alternative to FHA’s main product, which required a 3.5 percent downpayment. The Fannie product also had less ...

November 7, 2014 - Inside MBS & ABS

Experts: Absent Legislation, Industry Should Push For Administrative GSE Reform, Revise Existing Policies

The mortgage industry cannot and should not wait for Congress to get around to a legislative solution to the government-sponsored enterprises when much of what is necessary can be accomplished administratively, according to experts at a forum hosted by the Urban Institute and CoreLogic. Andrew Davidson, president of Andrew Davidson & Co., noted that among the lessons of this year’s failure to launch a Senate GSE reform bill is that lawmakers find it easier to agree on a set of principles for a mortgage finance system than on the system’s design. With legislation a long shot before the 2016 presidential elections, Davidson said...

November 7, 2014 - Inside MBS & ABS

GSE Credit Risk-Sharing Deals ‘Off to a Good Start’ Amid Calls for More Aggressive Front-End Transactions

As Fannie Mae and Freddie Mac continue to expand their credit-risk transactions, the two government-sponsored enterprises and their regulator should look to other ways to minimize credit risk, industry insiders told attendees of an Urban Institute/CoreLogic housing forum this week. In its most recent strategic plan for the GSEs, the Federal Housing Finance Agency is calling on Fannie and Freddie to reduce their exposure to risk by tripling the amount of credit-risk transfers they conduct on their single-family business from $30 billion last year to $90 billion in 2014. Mark Hanson, Freddie’s senior vice president, securitization, told...

November 6, 2014 - Inside Mortgage Finance

Reinstatement of GSEs’ 97 LTV Programs Would Benefit Private MIs but Delay Recovery of MMIF, Analysts Say

Private mortgage insurers would welcome the return of conventional 97 percent loan-to-value mortgages from the government-sponsored enterprises, but analysts say it might not be a slam dunk. The private MI industry has been encouraging the GSEs, particularly Fannie Mae, to bring back the 97 percent LTV product to compete with the FHA’s main product, which requires just a 3.5 percent downpayment. For years, Fannie offered...


What will Fannie Mae’s and Freddie Mac’s new 97 LTV programs mean for your business?

It will give our business a big boost as there is a lot of pent up demand for the product.
It will have only a minor impact on our overall business as we already are doing high LTV business through FHA and some of our high LTV FHA business is likely to shift to Fannie and Freddie.
It won’t have any impact on our business as we plan to steer clear of all high LTV business – particularly in the GSE market.

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