Freddie Mac

Browse articles from all of our Newsletters related to Freddie Mac.

September 19, 2014 - Inside The GSEs

GSE MBS Business Activity Posts Overall Increase in August

Together, Fannie Mae and Freddie Mac in August posted a combined increase in the volume of single-family mortgages securitized, according to a new Inside The GSEs analysis. Fannie and Freddie issued $61.1 billion in single-family mortgage-backed securities in August, a 5.5 percent increase from July. However, August's MBS issuance was down 56.7 percent on a year-to-date basis.


September 19, 2014 - Inside The GSEs

Enterprise Endnotes

Experts Laud FHFA’s Plan for ‘Single Security,’ But Urge Quicker Arrival at Goal. The Federal Housing Finance Agency’s “single security” proposal for a generic Fannie Mae/Freddie Mac MBS is “well-thought out” and “worthy of serious consideration,” but the agency should pick up the pace in its implementation to avoid making the solution part of the problem, according to a paper from the Urban Institute. Lewis Ranieri, chairman of Ranieri Partners, and Laurie Goodman, director of the UI’s Housing Policy Center, expressed concern that the FHFA “may be contemplating a slower pace in the project than it warrants.”


September 19, 2014 - Inside The GSEs

CBO: Stalled Senate Housing Bill That Cuts GSEs Would Save $60B

The Senate’s housing finance reform bill would save the government some $60 billion over 10 years according to an analysis by the Congressional Budget Office, but don’t hold your breath waiting for the windfall, say critics. Earlier this month, the CBO issued its estimate, which concluded that replacing Fannie Mae and Freddie Mac with a new securitization program that couples a first-loss position for private capital with back-end government insurance could reduce “direct spending” by $60 billion over the 2015-2024 period.


September 19, 2014 - Inside The GSEs

Commenters Call on FHFA To Change PMIER Draft Rules

The Federal Housing Finance Agency’s proposed capital requirements for private mortgage insurers would raise costs for borrowers but there is a need for new standards, according to industry group comments. The Mortgage Bankers Association, National Association of Realtors and several private MI companies have urged the Federal Housing Finance Agency to ease proposed capital requirements for private MIs.


September 19, 2014 - Inside The GSEs

Industry Input Letters to FHFA Show Little Appetite for GSE G-Fee Hike

There is little enthusiasm in the mortgage market for higher guaranty fees charged by Fannie Mae and Freddie Mac, various industry groups indicated in input letters to the GSEs’ regulator. In June, the Federal Housing Finance Agency issued a call for public comment on how the GSEs should calculate g-fees and whether the FHFA should proceed with a 10 basis point g-fee hike announced last year. In one of his first acts as FHFA director in January, Mel Watt postponed the g-fee hike pending further study.


September 19, 2014 - Inside The GSEs

Group: FHFA’s Deal Will Allow MBS Defendant to Write Off Settlement

The Federal Housing Finance Agency’s most recent settlement of non-agency mortgage-backed securities lawsuit has one consumer group seeing red as it claims taxpayers will ultimately get stuck with the cost of the bank’s multi-million dollar payout. Late last week, the FHFA announced a $550 million legal deal with HSBC North American Holdings, leaving just two civil cases tied to nonprime MBS issuance still unresolved.


September 19, 2014 - Inside The GSEs

DeMarco: Continued Delay of GSE Reform Exacerbates Market Risk

The ongoing uncertainty about the future of Fannie Mae and Freddie Mac is weighing on the mortgage industry and it’s only going to get worse with time, said the former head of the Federal Housing Finance Agency this week. Edward DeMarco, now a senior fellow in residence for the Milken Institute’s Center for Financial Markets, warned that with the government in effective control of the mortgage market, the risk grows of capital allocation and pricing decisions made through the prism of political calculation rather than due to sound, market driven principle.


September 19, 2014 - Inside The GSEs

IG: Fannie, Freddie Not Ready for Rep & Warranty Change

Fannie Mae and Freddie Mac were not ready for the new representation and warranty framework that took effect early last year at the insistence of the Federal Housing Finance Agency, according to a new Inspector General audit. Announced in September 2012 and implemented Jan. 1, 2013, the framework relieved sellers from certain reps and warrants, including those relating to credit underwriting and eligibility of the borrower and the property that were formerly effective for the life of the loan.


September 19, 2014 - Inside The GSEs

Groups Petition Congress to Seek Transparency in GSE Profit Sweep

Congress should put the screws to the Treasury Department to disclose all documents pertaining to the origins of the Obama administration’s controversial “net-worth sweep” of Fannie Mae and Freddie Mac profits, according to a coalition of right-leaning public policy groups. In a letter dispatched late this week to the top Republican and Democrat of the House Financial Services Oversight and Investigations Subcommittee, the 17 groups led by the Competitive Enterprise Institute urged lawmakers to intervene to impose transparency over what GSE shareholders consider an extra-legal maneuver by the executive branch.


September 19, 2014 - IMFnews

What We're Hearing: Do Banks Really Hate Mortgages? / Stearns Hires Former BofA Retail Honcho / Do the GSEs Really Need Capital? / A Bad NPL Experience?

Commercial banks hate mortgages. No, they don't. Yes, they do. No they don't. Yes, they do...


September 19, 2014 - Inside MBS & ABS

Fannie Mae, Freddie Mac Multifamily Business Way Behind Last Year’s Pace

Fannie Mae and Freddie Mac were both active this week with multifamily MBS transactions, but they’ll have to double-time it if they plan to match last year’s levels. The odds are against them. Fannie’s multifamily new business volume came to $13.8 billion through August 2014, compared with $20.4 billion the year before. The government-sponsored enterprise would have to crank out another $15 billion in the last four months of 2014 to match the 2013 total of $28.8 billion. For rival Freddie, multifamily new business activity totaled...


September 19, 2014 - Inside MBS & ABS

HSBC’s Deal With FHFA Allows for Tax Write-Off; Virginia Sues 13 Banks for $1.1 Billion Over MBS

The Federal Housing Finance Agency late last week announced a $550 million legal settlement with HSBC North American Holdings, leaving just two defendants in the conservator’s civil fraud cases tied to non-agency MBS – but a consumer group is crying foul over what it says are the deal’s lenient terms. The agreement resolves claims against HSBC regarding alleged violations of federal and state securities laws in connection with non-agency MBS purchased by Fannie Mae and Freddie Mac from 2005 to 2007. HSBC – which at one time owned subprime giant Household Finance – noted...


September 19, 2014 - Inside MBS & ABS

Market for Securitization of Mortgage Servicing Rights Yet to Get Off the Ground. Here’s Why

Although investors continue to pay premium – or close to it – prices for newly originated mortgage servicing rights, very few residential lenders have tried to securitize the underlying cash flows, leaving some market observers scratching their heads. “There are very few deals out there that I’m aware of,” said one servicing advisor, requesting his name not be used. “If a company needs cash, it’s a good option, but there’s just not much going on.” So far this year, just a handful of MSR-backed bonds have come...


September 19, 2014 - IMFnews

The G-Fee Quandary: Will Higher Prices Stimulate the Non-Agency Market?

SIFMA did not take a stance on whether g-fees should be adjusted up or down. Instead, the trade group stressed that it is unclear how a change to g-fees would impact non-agency activity.


September 18, 2014 - Inside Mortgage Finance

Experts: Stalled GSE Reform Legislation, Prolonged Conservatorship May Drive Private Capital Elsewhere

Time is not a friend to the housing finance system so long as Fannie Mae and Freddie Mac remain in government conservatorship with no endgame in sight, according to the former head of the Federal Housing Finance Agency. Former FHFA Acting Director Edward DeMarco, now a senior fellow in residence for the Milken Institute’s Center for Financial Markets, told attendees at this week’s Bipartisan Policy Council’s housing summit in Washington that the ongoing conservatorships of the two government-sponsored enterprises – now in the sixth year – will continue to distort the market and place taxpayers at risk. “The conservatorships are...


September 18, 2014 - Inside Mortgage Finance

FHFA Rejects Inspector General’s Call to Review Fannie’s, Freddie’s Rep and Warrant Framework

The Federal Housing Finance Agency is pushing back against the findings of its Inspector General that the agency rushed a mandated new representation and warranty framework “despite significant and unresolved operational risks” to Fannie Mae and Freddie Mac. Announced in September 2012 and implemented Jan. 1, 2013, the framework relieved sellers from certain reps and warrants, including those relating to credit underwriting and eligibility of the borrower and the property that were formerly effective for the life of the loan. It allowed for repurchase relief to seller/servicers if mortgages acquired by the government-sponsored enterprises after the effective date had acceptable payment history for 36 months. And the GSEs apparently weren’t...


September 18, 2014 - Inside Mortgage Finance

Purchase-Mortgage Demand Drove 2Q14 Production Surge, But Lenders Brace for Seasonal Slowdown

Purchase-mortgage originations jumped 44.3 percent from the first quarter of 2014 to the second quarter, according to a new Inside Mortgage Finance analysis and ranking, with first-time homebuyers representing about 43.9 percent of agency activity in the sector. Purchase mortgages accounted for 64.1 percent of total mortgage production during the second quarter. That’s the highest purchase share since 1995, when financing for home purchases represented 67.2 percent of total originations. At the midway point of 2014, purchase-mortgage originations were up...[Includes four data charts]


September 18, 2014 - IMFnews

Purchase-Money Market Share at its Highest Level in 19 Years

The biggest chunk of purchase business for the GSEs were loans ranging from $200,000 to $300,000, which accounted for 29.4 percent of their business.


September 17, 2014 - IMFnews

Short Takes: New Hampshire Nonbank About to be Sold / PE Firms Like Hard Money, Crowdfunding, P2P / Are Commercial Banks Toast? / Virginia Sues Wall Street Over PLS / Great Scot! Who Gets the RBS Liability?

Although there appears to be strong interest these days in mortgage banking firms, the outlook isn’t particularly bright for commercial banks.


September 17, 2014 - IMFnews

FHFA Rejects IG’s Findings on the Loosening of Buyback Rules

The FHFA partially agreed with the IG's first recommendation and flatly rejected the second.


September 16, 2014 - IMFnews

Short Takes: What’s MERS Worth? / Fannie, Freddie and MBA Could Use the Money / MBA Tells FHFA to go Easy on Buybacks / A Drop in FHA FICOs / Clayton’s New Hire

The Mortgage Bankers Association wants the FHFA to push Fannie and Freddie to go easy on mortgage buybacks.


September 16, 2014 - IMFnews

Ex-FHFA Chief DeMarco Warns that Private Capital May Lose Interest in Mortgages

“The conservatorships are a huge barrier to entry for private capital,” said former FHFA Acting Director Edward DeMarco.


September 15, 2014 - IMFnews

Short Takes: New Jumbo Deal from Two Harbors / Investors Dumping Fannie and Freddie Stock? / GSE Plaintiff Hires Former Fannie CFO Howard / M&A for NYCB? / Want a Loan? Don’t Get Pregnant / Norcom Opens Another Branch in Connecticut

Is it time to sell shares in Fannie Mae and Freddie Mac?


September 12, 2014 - Inside Nonconforming Markets

G-Fees Seen as Poor Lever for Non-Agency Market

A wide range of mortgage industry participants cautioned the Federal Housing Finance Agency that increasing the guaranty fees charged by Fannie Mae and Freddie Mac won’t necessarily prompt an increase in non-agency activity. In June, the FHFA solicited public input about what g-fee level would prompt investors in non-agency mortgage-backed securities to find it profitable to enter the market or prompt banks to hold conforming-balance mortgages in portfolio. “Policymakers should not assume that increases in g-fees alone will lead to a significant increase in private-label securities issuance,” said the Securities Industry and Financial Markets Association, which stressed that a number of factors beyond the pricing of agency mortgages are limiting non-agency activity.


September 12, 2014 - Inside MBS & ABS

DeMarco Cites ‘Structural Improvements’ in Housing Six Years After GSE Conservatorship, More Needed

Six years after the government takeover of Fannie Mae and Freddie Mac, the former regulator of the government-sponsored enterprises noted that the housing finance system has made “significant progress.” But even as critical structural changes are underway, comprehensive improvement is still several years out. In a policy paper issued last week, Edward DeMarco – new senior fellow-in-residence for the Milken Institute’s Center for Financial Markets – said that house prices, as measured by the Federal Housing Finance Agency, have recovered more than 50 percent since their decline in 2007. “While the damage from the housing crisis has been substantial, we are finally seeing...


September 12, 2014 - Inside MBS & ABS

Experts Laud FHFA’s Plan for ‘Single Security,’ But Urge Agency to Arrive at the Goal Sooner

The Federal Housing Finance Agency’s “single security” proposal for generic Fannie Mae and Freddie Mac MBS is “well-thought out” and “worthy of serious consideration,” but the agency should pick up the pace in its implementation to avoid making the solution part of the problem, according to a paper by the Urban Institute. Laurie Goodman, director of the UI’s Housing Policy Center, and Lewis Ranieri, chairman of Ranieri Partners, expressed concern that the FHFA “may be contemplating a slower pace in the project than it warrants.” The FHFA last month issued...


September 12, 2014 - Inside MBS & ABS

Post-Crash High in Prices Paid for Distressed Mortgages May Lead to More Securitizations

Investors are paying up for distressed mortgages these days, fueling talk that the market might see more in the way of securitizations. “Buyers of non-performing loans want to securitize,” said Brian Dunn, senior vice president of MountainView Capital Group. “They like the [real estate mortgage investment conduit] structure.” According to Dunn, the securitization of nonperforming mortgages “has taken off...


September 12, 2014 - IMFnews

Ranieri, Goodman Laud FHFA’s Plan for ‘Single Security,’ But Urge Agency to Arrive at the Goal Sooner

Ranieri and Goodman are worried that the creation of a single GSE security could morph into a drawn out and multi-year process.


September 11, 2014 - IMFnews

How Much Capital is Enough for a Nonbank?

Capital standards for nonbank mortgage firms is inevitable. But what should the requirement be?


September 11, 2014 - Inside Mortgage Finance

CBO Report: Senate Bill Proposal to Eliminate GSEs Would Save Billions, Depending on the Accounting

A Congressional Budget Office conclusion that the leading bipartisan mortgage-reform bill could save the government a lot of money likely won’t bring the legislation back to life in this Congress, but it could bolster a similar approach down the road. The CBO estimated that replacing Fannie Mae and Freddie Mac with a new securitization program that couples a first-loss position for private capital with back-end government insurance could reduce “direct spending” by $60 billion over the 2015-2024 period. The Housing Finance Reform and Taxpayer Protection Act of 2013, S. 1217, drafted by Senate Banking, Housing and Urban Affairs Committee Chairman Tim Johnson, D-SD, and Ranking Member Mike Crapo, R-ID, would establish...


September 11, 2014 - Inside Mortgage Finance

Industry Groups Agree FHFA Should Dump Planned GSE Guaranty Fee Increase, For Varying Reasons

The Federal Housing Finance Agency should abandon its proposed increase in guaranty fees charged by Fannie Mae and Freddie Mac, according to a number of industry groups. The Mortgage Bankers Association said in a comment letter that it opposes hikes in g-fees and loan-level price adjustments, noting that g-fees have become attractive to Congress as cash cow means for funding non-housing programs. “Clearly, the GSEs were undercapitalized...


September 11, 2014 - Inside Mortgage Finance

Jumbo Originations Gain Ground in Second Quarter, But ‘Conforming-Jumbo’ Production Lags a Bit

Non-agency jumbo mortgage originations accounted for a historically high 19.4 percent of new lending during the first half of 2014, and the sector is steadily gaining ground, according to a new Inside Mortgage Finance analysis of big-ticket mortgage activity. During the second quarter of 2014, lenders originated an estimated $59.0 billion of mortgage loans that were too big to be financed through Fannie Mae, Freddie Mac or the FHA. That was up 34.1 percent from the first quarter, a noticeably bigger increase than the 25.5 percent jump in total mortgage originations for the period. Compared to last year, jumbo lending was...[Includes three data charts]


September 11, 2014 - IMFnews

NAFCU Warns that a G-Fee Hike May Force CUs to Use FHA More

“If g-fee increases were being used to build up enterprise reserves, instead of being swept under the Treasury agreement, we would be more open to such increases,” said the CHLA.


September 10, 2014 - IMFnews

Short Takes: Nonbanks Rule in the Capital Category? / Don’t Even Ask About the Wells-Ocwen MSR Deal / Mortgage Applications Tank / Fannie and Freddie Beat the Tax Man / Cordray on HMDA

We understand that when stock analysts meet with Ocwen management, executives at the nonbank usually tell them to not even ask about the deal.


September 10, 2014 - IMFnews

Banks Increased Holdings of Residential MBS in 2Q, Thrifts See a Reduction

Although the Federal Reserve has tapered its agency MBS purchases significantly, the central bank continued to grow its holdings during the second quarter.


September 9, 2014 - IMFnews

Mortgage Buybacks by Depositories Fall to Lowest Level Since 1Q 2008

Bank of America was once again the buyback king at the midway point in 2014.


September 8, 2014 - IMFnews

Short Takes: CBO Calls ‘Johnson-Crapo’ a Financial Winner / Can the GOP Ram Thru a GSE Bill Next Year? / Radian Reports Strong MI Volume / Ellington Prices Shares / MBA Announces Realignment

One question we occasionally hear is this one: If the GOP this fall gains control of the Senate can’t they just push through a GSE reform bill and hope to override a presidential veto, if there is one?


September 8, 2014 - IMFnews

FHFA May Keep G-Fees Flat or Offer a ‘Token’ Increase; MBA Says No to Any More Hikes

In general, the industry believes a g-fee hike may not happen after all, but then there's all those "other charges."


September 5, 2014 - Inside The GSEs

Fannie, Freddie MBS Activity Rises Month-to-Month in August

Fannie Mae and Freddie Mac issued $61.1 billion in single-family mortgage-backed securities during the month of August, a 5.5 percent increase from the previous month, according to a new Inside The GSEs analysis. However, MBS issuance through the first eight months of 2014 was down 56.7 percent from the same period a year ago Top-ranked Wells Fargo’s Fannie and Freddie securitization, at $8.2 billion, rose by 3.1 percent on a monthly basis but dropped 70.0 percent year-to-date.


September 5, 2014 - Inside The GSEs

Enterprise Endnotes

Fannie Announces Plans to Sell DC Headquarters, Office Consolidation. Fannie Mae told its employees last week that it plans to sell its iconic headquarters in Northwest Washington, DC, and consolidate its five area office locations into one over the next two to three years. Fannie, a ward of the government for six years, owns its headquarters at 3900 Wisconsin Ave., but leases other locations in the area. It also occupies 4000 Wisconsin Ave. The company has offices in Virginia, Texas and California. Employees outside of the Washington area will not be affected, a spokesman clarified.


September 5, 2014 - Inside The GSEs

FHFA Revises GSE Housing Goals Upward Through 2017

Fannie Mae’s and Freddie Mac’s regulator has proposed tougher GSE affordable housing goals for purchase mortgages in low-income areas. Issued last week by the Federal Housing Finance Agency, the proposal would increase some of the benchmark levels for Fannie’s and Freddie’s affordable housing goals through 2017, while also establishing new housing subgoals for low-income multifamily properties.


September 5, 2014 - Inside The GSEs

Goldman Settles FHFA MBS Suit, Remaining Banks Fail to Dismiss

HSBC Holdings is headed for trial later this month, absent a deal, after a New York federal judge rejected a last ditch effort by HSBC and Nomura Holdings to toss their mortgage-backed securities suit brought by the Federal Housing Finance Agency. U.S. District Judge Denise Cote’s ruling reaffirmed earlier rulings that the Housing and Economic Recovery Act of 2008 extended the time that the FHFA could file claims against a host of big banks.


September 5, 2014 - Inside The GSEs

MBA Opposes IG’s Proposed Accounting Solution to TBW Failure

The Mortgage Bankers Association is pushing back against proposed “costly and expensive” recommendations by the Federal Housing Finance Agency’s official watchdog that would likely not done much to prevent a multi-billion fraud scheme against the GSEs. The report by the FHFA’s Inspector General said regulators, counterparties and investigators missed the swindle perpetrated by the now-defunct Taylor, Bean & Whitaker Mortgage because they ignored various red flags.


September 5, 2014 - Inside The GSEs

BofA Appeals Judge’s Order to Pay $1.27B for ‘Hustle’ of GSEs

Bank of America this week launched an appeal to overturn a jury verdict that found it liable for thousands of bad mortgages sold by Countrywide leading to a $1.27 billion judgment. U.S. District Court Judge Jed Rakoff levied the judgment in July after a New York jury last fall found the Charlotte, NC-based bank liable for fraud over a Countrywide program known in the industry as “the Hustle.”


September 5, 2014 - Inside The GSEs

Freddie Should Expand Reviews of Servicer Reimbursements, Says IG

Although Freddie Mac’s official watchdog found the GSE’s review process of servicer reimbursement claims to be “generally effective,” some tens of millions of dollars could be saved by scrutinizing servicer payments for costs incurred on loan defaults. According to an audit issued last week by the Federal Housing Finance Agency’s Inspector General, Freddie reimbursed 460 of its servicers $1.4 billion in 2013 but identified and denied $126 million in what the IG calls “erroneous” claims. The IG noted that Freddie’s top 10 servicers, relative to total reimbursements, accounted for 87 percent of all reimbursements made by Freddie in 2013.


September 5, 2014 - Inside The GSEs

Experts: FHFA’s Proposed MI Rules ‘Thoughtful’ But Need Work

The Federal Housing Finance Agency’s proposed tightening of rules for private mortgage insurers that do business with Fannie Mae and Freddie Mac is a “thoughtful effort,” but “modest changes” are required, conclude a trio of economists in a paper issued last week. Moody’s Analytics’ Mark Zandi and Chris deRitis and the Urban Institute’s Jim Parrott said that the FHFA’s Private Mortgage Insurance Eligibility Requirements “should succeed” in ensuring that private MI are strong counterparties to the GSEs, while serving as “a much improved bulwark against excessive risk” in the system.


September 5, 2014 - Inside The GSEs

Experts: No Chance of Advancing GSE Reform in Remaining Congress

When lawmakers return from their five-week August recess next week, House and Senate members will face a lengthy agenda with just a short period of time to get it done. Conspicuously absent from the Congressional to-do list is housing finance reform. With approximately 12 scheduled legislative days before the Nov. 4 midterm elections, industry observers note that lawmakers won’t get to some things until they return for the lame duck session, while other bills will fade away as the clock runs out.


September 5, 2014 - IMFnews

What We’re Hearing: Good, Let the Banks Get Out of Mortgages / Quicken Loans Comes on Strong / Can JPM Even Compete with Quicken? / Who Might Buy Ocwen, Nationstar? Anyone? / Carrington Expands in the Midwest / Dovenmuehle Who?

Does JPM's Jamie Dimon really care about the mortgage business? Or is he in it for the CRA credits?


September 5, 2014 - Inside MBS & ABS

Ginnie ‘Eagle’ Was Once a Red Hot Item for Lenders, but New Issuer Applications are Slowing

Ever since the housing bust, mortgage bankers have coveted the Ginnie Mae “eagle,” which allows them to issue and service the agency’s MBS, but the pipeline of new applications is slowing. According to figures provided to Inside MBS & ABS, the agency had received 78 new applications through the end of July compared to 89 in fiscal 2013 and 99 the prior year. In an interview with this newsletter, Ginnie President Ted Tozer acknowledged the decline in applications, but didn’t seem all that concerned, adding: “I think we received a bunch recently.” In other words, applications could wind up...


September 5, 2014 - Inside MBS & ABS

Banks Increase Holdings of Residential MBS In Second Quarter, Thrift Holdings Slumped

Commercial banks held $1.386 trillion of residential MBS at the end of June, marking their second consecutive quarterly gain in MBS investment, according to a new Inside MBS & ABS analysis. The 0.7 percent increase in bank MBS holdings was enough to offset a 3.5 percent drop in thrift investment in the sector. On a combined basis, banks and thrifts saw an 0.3 percent increase in residential MBS during the second quarter, though the industry remained 0.2 percent below the level set at the midway point in 2013. All of the increase came...[Includes two data charts]


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