Freddie Mac teamed up with a financial technology company in a pilot program aimed at helping low and moderate-income borrowers with their loan payments. Last week, the GSE announced its partnership with EarnUp, a platform that assists consumers with making their payments on time and gives personal recommendations on paying down their debts. Freddie and EarnUp believe that borrowers are more likely to stay current on their loan payments if they are given a quick and easy option to do so. By working with one of three non-profit housing counseling organizations, Freddie said that consumers can take advantage of EarnUp for 12 months with no cost.
GSE guaranty fees were down slightly in 2016 with the average fee falling from 59 basis points to 57 basis points, according to a new Federal Housing Finance Agency report published this week. But the pricing decline wasn't due to changes in the credit risk of loans. The drop reflected FHFA’s decision to establish minimum g-fees that took effect in November 2016. The report noted that the lower fees led to a larger negative gap, which reflects expected returns slightly below the target returns. “The average guarantee fee in 2016 on fixed-rate, 30-year loans fell by 2 bps to 61 bps; the fee on fixed-rate, 15-year loans fell by 4 bps to 37 bps.
The Federal Home Loan Banks have grown over the past few years with their total assets surpassing pre-crisis levels, according to a new Federal Reserve report analyzing recent trends and the increased role of the FHLBank system. The Fed noted that the growth coincided with two government policies: the imposition of the Liquidity Coverage Ratio in 2015 and the reform of money market funds a year later. Large banking institutions now have an incentive to borrow more from FHLBanks and less from private short-term money markets thanks to the preferential treatment in the LCR. Also, while FHLBank use of short-term funding has seen an uptick for several years, the report noted...
Federal Housing Finance Agency Director Mel Watt said the likelihood of a draw from Treasury is growing fast in a reply letter to the 15 trade groups that wrote late last month advocating for legislation instead of recapitalization. Watt reiterated his position in the Oct. 12 letter and said while he appreciates their views, he has expressed “repeatedly and publicly” that the declining capital buffers leave Fannie Mae and Freddie Mac with no ability to absorb potential losses. “FHFA is concerned that in the absence of a sufficient buffer, normal operating losses, such as from interest rate volatility and the accounting treatment of...
Fannie Mae and Freddie Mac are poised to report robust earnings for the third quarter, likely blowing past results of the prior two periods, according to an analysis by Inside The GSEs. The only question now is this: Just how good will it be? “And most of that money will be swept into the Treasury,” noted Tim Rood, a former Fannie Mae executive who now heads The Collingwood Group. Not only did the GSEs benefit from a strong origination and MBS issuance market in 3Q17, but a previously announced legal settlement with Royal Bank of Scotland will finally hit the books.
Most servicers of Fannie Mae and Freddie Mac single-family mortgage-backed securities saw growth in their servicing portfolios during the third quarter, but a handful of top banks continued to buck the trend.A new Inside The GSEs analysis of MBS disclosures shows $4.629 trillion of Fannie/Freddie servicing outstanding at the end of September. That was up 1.8 percent from the previous quarter, with Fannie (up 2.1 percent) gaining market share on Freddie (up 1.3 percent). Ginnie Mae servicing remained a faster-growing market, with $1.749 trillion outstanding, up 2.2 percent from the end of June. Large banks continued to show tepid interest in the GSE servicing market.
Private mortgage insurers are winning purchase-mortgage business away from the FHA, and VA lending is also gaining ground, according to an analysis of agency mortgage-backed securities data by Inside Mortgage Trends. Lenders delivered $50.25 billion of purchase loans with private MI coverage into agency MBS during the third quarter of 2017. That represented 40.2 percent of total insured purchase loans securitized by the agencies, up from 39.3 percent ... [Includes one data chart]
Quicken Loans is a step closer to completing a process that would take it away from aging legacy systems into the world of digital mortgages. The Detroit-based lender has announced a partnership with eOriginal, Inc. that would enable it to complete the final steps towards digitally creating an electronic mortgage note. The process would also allow Quicken to store the e-note securely as an “authoritative copy” and transmit it to a custodian and the secondary market almost instantaneously ...
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