Defects in mortgage loans produced under the Consumer Financial Protection Bureau’s integrated disclosure rule fell modestly in the second quarter of 2016, after peaking in the first three months of the year. This is the first such drop since the TRID rule took effect in October 2015, according to a new quality control analysis from ARMCO, a risk management technology vendor. “TRID-related defects continue to be the leading area of concern in post-closing reviews; however ...

Fannie Mae and Freddie Mac had markedly different experiences in November in terms of new single-family business activity. Issuance of Fannie mortgage-backed securities fell 25.9 percent from October to November, while Freddie production soared 13.6 percent higher, according to a new Inside The GSEs analysis and ranking. The most likely explanation for the divergence is that Freddie had more business days in which November MBS were issued. Both GSEs observed two legal holidays – Veterans Day and Thanksgiving – which knocked the number of business days down to 20 last month. But Fannie also took off the day after Thanksgiving in terms of new MBS issuance, while Freddie kept the machinery running. And although mortgage sellers set up new...

Back in late August, Ginnie Mae promised the mortgage industry that it would release a new and improved “acknowledgement agreement,” a document that defines collateral rights tied to agency servicing. But now it’s December, and no such document has surfaced. “It’s in legal,” an agency spokeswoman said, apologizing for the repeated delays. Meanwhile, there is new industry chatter that the revised acknowledgement agreement may not see the light of day for ...

Comments made by Treasury Secretary Designate Steven Mnuchin about privatizing Fannie Mae and Freddie Mac caused much speculation around Washington last week. But analysts predict that privatization in the near term is unlikely. Mnuchin criticized the fact that the GSEs have been in conservatorship this long. During a cable television interview he said, “We’ve got to get Fannie and Freddie out of government ownership,” adding that it often displaces private lending in the mortgage markets. “So let me just be clear. We’ll make sure that when they’re restructured they’ll be safer and they won’t get taken over again, but we’ve got to get them out of government control.”

FHA and VA lenders don’t expect to see a major increase in business as a result of higher loan limits in 2017. The national “floor” loan limit for FHA is climbing $4,615 to $275,665. The maximum for high-cost markets will increase to $636,150, the same as for Fannie Mae and Freddie Mac, up $10,650 from this year. At best, lenders say the impact will be marginal to moderate, given the tight housing market and interest-rate fluctuations. Some lenders expect to see a flurry of ...

Freddie Mac announced late this week that it is now using the common securitization platform after successfully implementing the first release on Nov. 21. As planned, the GSE will use the CSP for data acceptance, issuance support, and bond administration activities related to current single-class, fixed-rate, mortgage-backed securities. The first release was a test of sorts to make sure that the system, operations, and controls of the platform are functional. It also sets the stage for the second release when Fannie will begin using the CSP in 2018. Federal Housing Finance Agency Director Mel Watt said the successful implementation of the first release is a “significant milestone” toward the ultimate goal of a common securitization platform and a single security.

“Mortgage originations get crushed,” according to the latest forecast from Freddie Mac’s economic and housing research group. A number of industry analysts have adjusted their originations forecasts as interest rates on mortgages have increased recently and could climb higher next year. “Mortgage market activity will be significantly reduced by higher mortgage rates, especially refinance originations, which are likely to be cut in half,” said Sean Becketti, Freddie’s chief economist ...

Although the common stock of Fannie Mae and Freddie Mac has been deemed near worthless by stock analysts (and others), the share price of the two has been on a tear of late thanks to comments made two weeks ago by investment banker Steven Mnuchin, President-elect Donald Trump’s pick to head the Treasury Department. As Inside The GSEs went to press this week, Fannie common was trading at just $4.00 a share, Freddie at $3.90. And while that might not seem like much, it represents a stunning 166 percent gain since right before the November election. Mnuchin set the stocks in orbit when he said during a cable TV interview that resolving...

House Financial Services Committee members Rep Ed Royce, R-CA, and Rep. Gwen Moore, D-WI, introduced a bill this week to make it mandatory for the GSEs to increase credit risk transfers with the private sector. It includes provisions regarding deep coverage mortgage insurance. The Taxpayer Protections and Market Access for Mortgage Finance Act (H.R. 6487) is a way for Congress to encourage Fannie Mae and Freddie Mac to increase the amount and the types of credit risk transfer transactions to the maximum level that is economically and commercially viable, said Royce.

If lenders evaluated borrowers more “holistically” and put less emphasis on credit scores, the share of minorities receiving purchase mortgages could increase significantly, according to analysts at the Urban Institute’s Housing Finance Policy Center. Laurie Goodman, director of the HFPC, and Alanna McCargo, the co-director, noted that some 70.0 percent of purchase mortgages originated in 2015 went to white borrowers. They suggested that the disparate impact of tight credit is ...