A relatively small – even microscopic – percentage of loans securitized by Fannie Mae and Freddie Mac in the past three years have been subject to a repurchase demand, according to a new Inside Mortgage Trends analysis. As of the end of March, lenders had repurchased a total of $2.01 billion of loans that were pooled into mortgage-backed securities by the two government-sponsored enterprises during 2012, 2013 and 2014. That was just ... [Includes two data charts]
The non-cash share of financing for home purchases increased to 75.2 percent in May, according to results from the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey.
Mortgage bankers rode a wave of rising loan production to big increases in profitability during the first quarter of 2015, according to the Mortgage Bankers Association’s quarterly Mortgage Bankers Performance Report. Average pretax income for firms participating in the survey was $2.246 million, a whopping 149.3 percent increase from the fourth quarter. That was the highest pretax profit since the second quarter of 2013, when lenders earned ...
The outstanding supply of single-family MBS declined 0.7 percent during the first quarter of 2015, according to a new Inside MBS & ABS market analysis. But that didn’t stop commercial banks from continuing to increase their holdings. Banks increased their aggregate MBS holdings by 3.1 percent from the fourth quarter, pushing their share of the MBS market to 22.9 percent. The only other investor group that managed to increase its stake was the credit union industry, which posted a 1.6 percent increase from the previous quarter. The Federal Reserve finally loosened...
Contributing Treasury’s warrants for common stock of Fannie Mae and Freddie Mac to the affordable housing funds is one of the ways that the Leadership Conference on Civil and Human Rights says the GSEs can help earmark financial resources toward affordable housing. In a June report published by the Leadership Conference, the organization offered a few of its housing finance recommendations to support affordable housing goals. The report noted that often lost in public discussion of the GSE conservatorships is the fact that the Treasury owns warrants for 79.9 percent of the common stock of both Fannie and Freddie. “The value of the warrants could easily exceed $100 billion,” the group said in its recommendation.
Freddie Mac announced its fifth Structured Agency Credit Risk debt note offering in 2015 this week. This $950 million offering comes on the heels of last week’s STACR offering of $425.6 million, which was the first transaction under a new structure that shares a reference pool of loans with a previous transaction.Last week’s STACR Series 2015-HQ2 has a reference pool of single-family mortgages with an unpaid principal balance of more than $30.3 billion. Freddie said the reference pool consists of a subset of 30-year fixed-rate single-family mortgages acquired by Freddie in the first through third quarters of 2013 with loan-to-value ratios from 80 to 95 percent. Analysts from Moody’s Investors Service said Freddie used part of its 58 percent....
The Federal Housing Finance Agency settled $10.3 billion in legal claims in 2014 stemming from 11 non-agency MBS issues that go as far back as 10 years ago, noted the FHFA’s annual report to Congress released this week. These lawsuits were filed in 2011 against financial institutions along with some of their executive management including officers and directors. The suits alleged violations of federal securities laws and state laws in the sale of the non-agency MBS to Fannie Mae and Freddie Mac that took place in a two-year period during the housing downturn between 2005 and 2007. A number of issues contributed...[Includes one data table]
Redwood Trust is preparing to issue its second consecutive jumbo MBS that includes a new stop-advance feature. While officials at the real estate investment trust said the feature has been well received by AAA investors, Fitch Ratings warned late last week that it introduces some risks to deals. The stop-advance feature being used by Redwood prevents servicers from providing advances of principal and interest on loans that are 120+ days delinquent. The feature was first used on the $356.45 million deal Redwood issued in April and is set to be included in a pending $343.21 million jumbo MBS from the issuer. Fitch didn’t rate...
Ginnie Mae this week announced plans to reform its document-custody policies as part of a long-term effort to modernize the way it manages documents in order to minimize agency risks. Michael Drayne, Ginnie’s senior vice president of issuer and portfolio management, said the updates and improvements will apply to loan documents that serve as collateral for securitized pools of mortgages. Ginnie will follow...
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