“This new trove of documents conclusively shows that the net worth sweep was designed solely to boost Treasury’s coffers and prevent the GSEs from rebuilding capital or exiting conservatorship,” said Investors Unite, a shareholder rights group.

Fannie said that about 3 or 4 percent of DU applications with DTI ratios ranging from 45 percent to 50 percent had been deemed ineligible because they failed the overlay test…

Among the top 20 lenders in 2Q17, Fairway Independent Mortgage had the highest growth rate at 64.2 percent.

New documents were recently unsealed in Fairholme Funds vs. United States that give GSE shareholders more hope in proving the Treasury sweep was designed with an ulterior motive in mind.“The release of these documents is a very positive development in the case against Fannie [Mae] and Freddie [Mac]. These documents fatally undermine the government’s claim,” said Pete Patterson, a partner with the Cooper & Kirk law firm representing the plaintiffs. Officials from Treasury have repeatedly said that the sweep was designed to prevent the two mortgage giants from collapsing. But the latest batch of 33 confidential emails and memos released under court order appears to illustrate otherwise.

Fannie Mae’s announcement in May that it will raise the debt-to-income cap from 45 to 50 percent is a win for expanding access to credit, especially for minority families, says a recent report by the Urban Institute.UI anticipates that as many as 95,000 new mortgages could be approved annually. With African-American and Latino families more likely to have DTI ratios above 45 percent, the authors of the paper note that a large share of the new loans will likely be to those families. Prior to the change, Fannie allowed for flexibility up to 50 percent DTI in certain cases.

Participants in the low-income housing tax credit program said the re-entry of Fannie Mae and Freddie Mac into the market should not be limited to rural communities. The two GSEs were directed to stop investing in the tax credits in 2008 when they were placed under conservatorship. But a final rule issued by the Federal Housing Finance Agency in December, under its duty-to-serve requirement, determined that if the GSEs re-enter the LIHTC market, they should only be able do so in targeted areas. In May, the GSEs released draft proposals on ways to grow financing for specific underserved markets under DTS, which include rural housing, along with manufactured housing and preserving affordable housing for low- and moderate-income, households.

Fannie Prices $1.4B CAS Deal. In the GSE’s fifth credit risk-sharing transaction of the year under its popular Connecticut Avenue Securities program, Fannie Mae announced a $1.351 billion offering last week. The CAS program, launched in 2013, has been steadily growing, according to Laurel Davis, Fannie’s vice president of credit risk transfers. She noted that buyers are attracted to the program’s liquidity and transparency. This latest reference pool includes more than 174,000 single-family mortgage loans with an outstanding principal balance of about $43.8 billion.Original loan-to-value ratios are between 60 and 80 percent with the loans having been acquired between...

New issuance of MBS backed by income-property mortgages during the second quarter rebounded from a lull in early 2017, according to a new analysis by Inside MBS & ABS. A total of $51.03 billion of commercial mortgages were securitized in the second quarter, a gain of 12.1 percent from the first three months of 2017. That brought year-to-date commercial MBS issuance to $96.54 billion, 12.4 percent ahead of the pace set in 2016. But CMBS production was...[Includes one data table]

Flagstar Bank priced its first post-crisis jumbo MBS this week and other big banks could start issuing deals this year, according to industry analysts. Since 2010, the main issuers in the fledgling jumbo MBS market have been nonbanks, with banks content to hold jumbos in portfolio. In recent years, the only bank to issue prime non-agency MBS has been JPMorgan Chase, which has packaged jumbos with some mortgages eligible for sale to the government-sponsored enterprises in its deals. The $443.8 million Flagstar Mortgage Trust 2017-1 follows...

A recent ruling by the Supreme Court of the United States affirmed a three-year statute of repose for certain securities-related lawsuits. The ruling will likely limit the claims that can be brought by investors in faulty MBS and ABS. The case of California Public Employees’ Retirement System v. ANZ Securities involved an attempt by CalPERS to opt out of a class-action lawsuit against securities underwriters and file a separate claim in a timeframe beyond a three-year limitation. In a 5-4 decision at the end of June, the Supreme Court affirmed rulings by lower courts that determined that CalPERS’ action was untimely under the three-year statute of repose in the Securities Act of 1933. The majority opinion written by Justice Anthony Kennedy said...