The GSEs increased their credit-risk transfers by 30.4 percent in 2016 from the previous year. This means that Fannie Mae and Freddie Mac both hit their risk-transfer targets by executing different forms of CRTs that covered $548.0 billion of mortgages, according to a recent report from the Federal Housing Finance Agency.“Fannie Mae and Freddie Mac have made credit risk transfer a regular part of their business and they continue to improve and expand the scope of their programs and explore different transaction structures,” said FHFA Director Melvin Watt. The FHFA directed the GSEs to transfer credit risk on 90 percent of their targeted business: long-term, fixed-rate mortgages with loan-to-value ratios exceeding 60 percent.

The Federal Housing Finance Agency late last month published its annual GSE Scorecard progress report and noted that Fannie Mae and Freddie Mac have made great strides in meeting their conservatorship goals, including increasing access to mortgage credit and reducing taxpayer risks. Many of the objectives set by the scorecard were focused on testing new concepts or perfecting existing ones, and relatively few of them had hard targets in terms of business volume. The first highlighted strategic goal for the GSEs was maintaining credit availability, including increasing access to credit. There hasn’t been much change in the credit profile of Fannie and Freddie business, and the regulator did not set any specific goals other than the affordable housing goals.

The Community Home Lenders Association proposed a GSE reform plan last week using a utility that would let Fannie Mae and Freddie Mac build capital and would release the GSEs back into the private sector. Unlike most of the reform proposals that have been floated in the past year, the trade group for community-based mortgage lenders suggests recapitalizing and reprivatizing the GSEs with the mindset that comprehensive legislation is not needed at this time. Its plan calls for a capital restoration and uses a utility model that it suggests the Federal Housing Finance Agency develop, with the Treasury’s and Congress’ blessings. CHLA said that the FHFA is the appropriate entity to develop such a plan with...

Soon both GSEs will offer property inspection waivers as part of an effort to reduce lender uncertainty when it comes to buybacks. Freddie Mac is set to introduce its appraisal waiver within the next few months and Fannie Mae has had one since December. Appraisals are often the leading cause of buyback concerns, according to Allen Maulsby, executive vice president at Colonial National Mortgage. He told Inside The GSEs that Fannie and Freddie are moving in the right direction when it comes to addressing buyback relief. “Anything that they can do to give us rep-and-warrant relief is good. I think it probably has alleviated some repurchase anxiety, particularly around appraisals,” he said.

While hopes were high for GSE reform with the incoming Trump administration, housing industry experts seem to agree that major changes at Fannie Mae and Freddie Mac may not happen anytime soon. Panelists at a housing finance conference sponsored by Moody’s agreed with the ratings agency’s sentiment and said that the policy environment is in flux and unpredictable with GSE reform unlikely in the near term. “The election of Donald J. Trump as president amid Republican control of Congress has created a new political landscape with potential implications for the U.S. housing and finance markets,” said Moody’s in a recap of the conference. “However, panelists at our conference saw targeted legislative or regulatory changes as...

There are multiple sides to the Treasury sweep debate but despite rumors to the contrary, the GSEs sent the bulk of their fourth-quarter earnings to the Treasury at the end of March, as scheduled. While some advocate for suspending the profit sweep, others question whether the timing of future payments could be altered to reduce the likelihood that either Fannie Mae or Freddie Mac might need another bailout. In early March, industry officials and lobbyists began voicing their belief that the FHFA, possibly with Treasury’s blessing, might alter or suspend the quarterly dividends. One possibility floated was changing the four quarterly payments to one annual one. Speculation may have been fueled...

Nonbank mortgage lenders have been killing it in the GSE market in recent years, even gaining a dominant 52.3 percent share of new single-family business back in the second quarter of 2016. Recently, however, not so much. A new Inside The GSEs analysis reveals that nonbanks sold 45.0 percent of single-family loans securitized by Fannie Mae and Freddie Mac during the first quarter of this year. That was the third straight decline in nonbank share of the GSE market.While total Fannie/Freddie MBS issuance fell 27.1 percent from the fourth quarter, nonbank production was off 32.5 percent. And surprisingly, large banks picked up most of the slack.

While conventional residential lenders try to figure out how to cut costs in what likely will turn out to be a down year for originations, nonprime firms are headed in the opposite direction – growth. Angel Oak Companies, Atlanta, the largest nonprime lender of 2016 with $700 million of production, this week announced the promotion of four senior managers and plans to double its sales force, which presently numbers 52 account executives. “We’ve already added 16 ...

Whether a potential homebuyer has a bachelor’s degree plays a significant role in the applicant’s ability to obtain a mortgage, according to research funded by Fannie Mae. The analysis suggests that the higher-education variable wasn’t much of a factor before the financial crisis, but a borrower’s level of education is a factor in post-crisis originations. Researchers at the University of Southern California probed data from a survey of households conducted by the Survey Research Center at ...

The amount of equity U.S. homeowners could access rose by almost $570 billion in 2016, reaching $4.7 trillion last year, thanks to an extended streak of home price appreciation. This was the highest level of “tappable” equity seen since 2006, according to a new report from Black Knight Financial Services. Perhaps just as impressive, an eye-popping 44 percent of refinanced mortgages in the fourth quarter of 2016 were cash-out refis, the highest level in eight years ...