Most borrowers are having a positive experience with the new loan estimate and closing disclosure forms now in use under the Consumer Financial Protection Bureau’s integrated disclosure rule known as TRID, according to a new survey from TD Bank. The rule integrates the consumer disclosures required under both the Truth in Lending Act and the Real Estate Settlement Procedures Act. Of those responding to the survey, 40 percent reported having had an “excellent” experience ...

Mortgage financing as it exists today might have to go through significant changes if the impact of climate change worsens, particularly in areas most exposed to the risk, according to new research from Freddie Mac. While flood insurance makes it possible for borrowers to obtain home loans in areas of high flood risk, other fallout from climate change – rising sea levels, changing weather patterns, increasing temperatures – may not be insurable. “As a result, some important features ...

This week, Fannie Mae announced it will start to securitize re-performing loans held on its balance sheet during the second half of the year. Loans that have been modified and are now performing and loans that have become current without a modification program will be included. Securitizing the once delinquent loans will help manage Fannie’s risk while dwindling down its portfolio, according to Fannie’s Bob Ives, vice president of retained portfolio asset management. “Over the long run, these securitizations can benefit investors, Fannie Mae and taxpayers.” Just weeks earlier the Federal Housing Finance Agency revealed a principal reduction program for Fannie and Freddie Mac loans.

The outstanding supply of Fannie Mae and Freddie Mac servicing has remained essentially flat over the past year or so as the churning of refinance loans doesn’t create much growth. But some sectors of the GSE servicing market are clearly gaining share. A new ranking and analysis by Inside The GSEs shows the supply of Fannie/Freddie servicing attached to single-family mortgage-backed securities declined 0.3 percent in the first quarter of 2016. The Freddie market was actually up 0.3 percent from the end of 2015, while Fannie servicing declined 0.7 percent. The figures do not include servicing of unsecuritized mortgages held in portfolio by the two GSEs. The top tier of servicers continued to pull...

Recent legal developments bode well for GSE shareholder lawsuits, according to one of the attorneys involved in the Perry Capital LLC v. Lew et al case where shareholders question the validity of the Treasury sweep of the profits of Fannie Mae and Freddie Mac.The D.C. Circuit Court heard oral arguments in the case on April 15 before three federal judges. The oral arguments took place as part of the appeal of the Fairholme Funds case dismissal in 2014, in which investors argued that the Treasury sweep violated the Housing and Economic Recovery Act. Hamish Hume, partner with Boies Schiller & Flexner, who argued before the panel of judges, said...

As the GSEs’ capital cushion continues to dwindle, Senate Banking Committee Chair Richard Shelby, R-AL, voiced concerns about oversight of the Federal Housing Finance Agency, the GSEs’ regulator. Shelby fired off letters on the same day to both the Congressional Budget Office and Government Accountability Office asking them to consider a number of questions pertaining to the FHFA and the structure of the future of the housing finance market. In the letters, addressed to the GAO’s Comptroller Gene Dodaro and Keith Hall, CBO’s director, Shelby said FHFA’s goals have changed from contracting the GSEs’ presence in the marketplace to reducing taxpayer risk through the increased role of private capital in the mortgage market.

Capital matters, according to Fannie Mae CEO Timothy Mayoupolos, who reflected on lessons learned during the crisis. In a recent speech in Washington, he noted that while Fannie was meeting its statutory capital requirements heading into the crisis, it was clearly not enough to weather the storm. “We are a mono-line company. We are restricted in diversifying our business,” he said. “So any broad disruption in housing was going to affect us. And it did,” he said, recounting the growing number of default borrowers during that time. Although he stopped short of commenting on what amount the GSEs should be recapitalized at, he did say that there is not enough capital today.

Rep. Mike Capuano, D-MA, wants the Federal Housing Finance Agency and Treasury Department to re-examine the policy that prevents Fannie Mae and Freddie Mac from building capital to avoid disrupting affordable housing initiatives.Before being placed into conservatorship, Fannie and Freddie were equipped to invest in affordable housing and underserved markets, he said, adding that in today’s environment, the underserved markets will suffer the most from the net worth sweep. Capuano wrote in a letter to the agencies that the lack of stability and strength caused by eliminating the GSEs’ capital buffer has “particularly serious consequences” for the residents of underserved markets across the country.

Returning to the “originate-and-hold model” or replacing the GSEs with a financial market utility are a couple of the ideas being floated around in two recent essays published on the Housing Finance Policy Center’s new Housing Finance Reform Incubator. Patricia Moser, director of a new initiative on central banking and financial policy at Columbia University, said that the proposed utility would be a regulated private firm mutually owned by lenders, focused exclusively on securitization of standardized residential mortgages. “The utility pools mortgages into pass-through securities and provides a credit guarantee,” she said, adding that it would allow mortgage credit markets to function or restart even in times of market,,,

There were just two comments regarding the Federal Housing Finance Agency’s American Survey of Mortgage Borrowers and both were generally supportive but suggested ways to enhance the survey’s usefulness. The FHFA issued a request for comment last month about the proposed survey to collect information from borrowers. The information will be used in a report highlighting the GSEs’ mortgage activities. The comment period closed this week. The National Association of Home Builders said the practical utility of information collected by the ASMB is clear and will allow for a more in-depth analysis of the mortgage market. While some argue that the information collected is duplicative of other available data, the...