This year, the commercial MBS market will see the influence of the newly effective Securities and Exchange Commission rule on CMBS risk retention, which likely will mean higher credit quality but also a degree of unpredictability when it comes to issuance, according to industry analysts. At Wells Fargo Securities, analysts who cover the CMBS space are forecasting non-agency issuance of $65.0 billion in 2017. “While CMBS issuance has historically grown with the economy, this is not exactly the typical cycle,” they said in a recent client note. “Economic growth has been uneven and property fundamentals seem to be maturing.” Requiring CMBS issuers to retain at least 5 percent of the credit risk adds...
With the post-election interest-rate rise sticking around, there’s a growing school of thought that residential originators will finally ease underwriting standards in an effort to boost lending volume. But the way things stand today, that could be wishful thinking. The Mortgage Bankers Association told Inside Mortgage Finance this week that its Mortgage Credit Availability Index shows a “gradual” loosening has occurred, but it credits a greater availability of jumbo product for the reading. As MBA Senior Vice President of Research Michael Fratantoni put...
Prospects for a relatively speedy administrative solution to the eight-year-old conservatorship of Fannie Mae and Freddie Mac appeared to dim after Treasury Secretary-nominee Steve Mnuchin backtracked from earlier comments on swiftly addressing the plight of the two government-sponsored enterprises. During a Jan. 19 Senate confirmation hearing, Sen. Mark Warner, D-VA, asked Mnuchin if he supports a recapitalization-and-release plan for the GSEs, as several industry groups have proposed. “First, let’s be clear,” Mnuchin said. “My comments were...
The Consumer Financial Protection Bureau this week brought a relatively modest $28.8 million enforcement action against CitiFinancial Servicing and CitiMortgage to resolve allegations that struggling borrowers were kept in the dark about options available to save their homes. Under the terms of the consent order, CitiMortgage has to pay an estimated $17 million to compensate wronged consumers, along with a civil penalty of $3 million. The CFPB is also compelling CitiFinancial Services to refund approximately $4.4 million to consumers, and pay a civil penalty of $4.4 million. The bureau’s action related...
The U.S. Attorney for the Southern District of New York has announced a $53 million settlement agreement with JPMorgan Chase Bank to resolve alleged discriminatory lending through its wholesale broker channel in violation of the Equal Credit Opportunity Act and the Fair Housing Act. Filed last week in Manhattan federal court, the U.S. Attorney’s complaint accused Chase of improperly steering African-American and Hispanic borrowers into certain loan products and charging them higher interest rates and fees than comparable white borrowers between 2006 and 2009. During the period, approximately 360,000 brokered mortgage loans were delivered...
Hedge fund manager Pershing Square Capital Management is facing a bit of a dilemma in regard to its huge investment in Fannie Mae and Freddie Mac common stock: take profits off the table now – while it still can – or go for broke, hoping for a huge payout later on. At last check, Pershing – the brainchild of veteran investor Bill Ackman – owned roughly 9.98 percent of Fannie and 9.77 percent of Freddie. It accumulated the shares earlier in the decade at an average price of $2.30 for Fannie and $2.14 for Freddie. Today, Fannie’s common trades...
With interest rates on mortgages expected to go up this year, some lenders are putting an emphasis on loan originators who can close purchase mortgages. Economists at the Mortgage Bankers Association predict that the average interest rate on a 30-year fixed rate mortgage will climb from 3.70 percent last year to 4.50 percent in 2017. The higher rates will help prompt a 47.7 percent decline in refi volume in 2017 compared with the estimated $901.0 billion in refi originations last year, according to the MBA. Dave Stevens, president and CEO of the MBA, said...
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