Freddie Mac plans to dip its toes into the single-family rental market in the near future, but don’t expect its deal to mirror Fannie Mae’s. The GSE differentiates its single-family rental plan by focusing on the affordable segment of the rental home market. But, with no deal to announce yet, Freddie is still in the exploratory phase. A spokesman for Freddie told Inside The GSEs that the Federal Housing Finance Agency has authorized the GSEs to explore single-family rental transactions on a very limited basis. He said this was done to “help better understand the challenges and opportunities in this growing segment of the rental market.”
While lawmakers continue to mull over the multitude of plans for housing finance reform, small lending institutions said a complete overhaul of the secondary market is unnecessary. In fact, they said it would make things too complicated. Representatives from community banks spoke during a Senate Banking, Housing and Urban Affairs hearing last week focused on GSE reform. There was consensus among the community banks that there’s no need to add more guarantors in addition to Fannie Mae and Freddie Mac in the name of competition. They said doing so would just increase the regulatory burden.
The Federal Housing Finance Agency published a progress report on Fannie Mae and Freddie Mac credit-risk transfer programs this week. The report covered the first quarter and showed that together the GSEs transferred $5.5 billion worth of credit risk during the first three months of the year.The risk was transferred on mortgage loans with $174 billion in unpaid principal balance. That’s a good start to 2017 being on track with the $18.1 billion the GSEs transferred in all of 2016 on mortgages with $548 billion in UPB. Debt issuance was the largest category of CRTs, accounting for 77 percent. Reinsurance transactions followed, but represented a much smaller 19 percent share.
“While originations to-date have been nominal, we expect a ramp-up production from here as we continue to increase marketing and consumer awareness of the Ally Home offering,” Christopher Halmy said.
A number of lenders have experienced a sharp decline in refinance volume without a meaningful increase in purchase-mortgage originations, according to Jonathan Corr, president and CEO of Ellie Mae.
Large banks continue to dominate the business of servicing Fannie Mae and Freddie Mac home loans, but a group of hard-charging non-depository institutions are gaining ground. A new Inside The GSEs analysis of Fannie and Freddie mortgage-backed securities disclosures shows that total single-family MBS outstanding actually declined slightly, by 0.1 percent, during the second quarter. This was due to a 0.3 percent drop in Fannie MBS servicing – the figures do not include servicing of whole loans held by the enterprises – while the Freddie market grew 0.3 percent. Some 46.2 percent of Fannie/Freddie MBS servicing was held by banking organizations with more than $100 billion in assets. That included four of the top five GSE servicers and seven of the top 10.
Wells Fargo remained the top producer of first-lien mortgages with a hefty 27.1 percent increase from the first quarter, gaining ground on all of its nearest competitors.
JPMorgan launched a new index this week aimed at connecting with clients looking to invest in Fannie Mae, Freddie Mac and Ginnie Mae MBS. The company said it is the first institutional agency mortgage index built on individual security valuations. The index, referred to as MAX, is billed as a “contemporary and comprehensive” benchmark of the agency MBS market. It combines 30-year, 15-year and 20-year MBS in an index that the bank says contains more than 400 aggregates that cover almost 85 percent of the agency market. And because it updates from the sixth business day of the month instead of the 15th, as most other indices do, JPMorgan said the MAX reduces a number of tracking errors. “Agency MBS is...
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