Lenders will be able to use technology to verify a borrower’s income, assets and credit worthiness in 2017 in Freddie Mac’s Loan Advisor Suite. The announcement was made this week on the heels of Fannie Mae announcing changes to its Desktop Underwriter. With the cost of originating a mortgage more than doubling since pre-crisis times, the GSE said the enhancements were designed to help lenders validate the quality of the loans they originate and help keep costs at a minimum. David Lowman, Freddie’s executive vice president of single-family business, said, “We’re collaborating with lenders to create innovative tools that reduce the costs of producing and selling high-quality loans to us.”

The secondary market in transfers of agency mortgage servicing rights gained some momentum during the third quarter of 2016, according to a new Inside Mortgage Trends analysis and ranking. A total of $94.96 billion of Fannie Mae, Freddie Mac and Ginnie Mae MSR connected to newly issued mortgage-backed securities changed hands during the third quarter. That was up 9.4 percent from the second quarter and represented the heaviest volume since ... [Includes two data charts]

Federal Housing Finance Agency Director Mel Watt said access to credit and supporting underserved markets will be among the goals outlined for the GSEs next year. Although the FHFA will not release a 2017 GSE scorecard until yearend, Watt, speaking at this week’s annual Mortgage Bankers Association convention in Boston, offered a preview of what Fannie Mae and Freddie Mac will focus on in the coming year. Watt said he expects the GSEs to ramp up research efforts to increase responsible access to credit and affordable housing. He said the average credit scores for GSE purchase loans remain historically high. “Based on the work they have already done and this additional research, we’ll be asking them to...

The Congressional Budget Office said allowing the GSEs to retain a portion of their earnings could help stabilize the mortgage market and the federal budget.In a recent report studying the effects of recapitalizing Fannie Mae and Freddie Mac, the CBO concluded that while it may limit competition in the market, the benefits outweigh any potential concerns. With GSE capital levels scheduled to be depleted by 2018, there have been several legislative proposals over the past year advocating a recap. The CBO published a report in response to the proposals but put a different spin on it. The CBO created an “illustrative policy option” in which Fannie and Freddie would retain an average of $5 billion of their profits annually.

Publicly traded banks reported strong gains in mortgage-banking income during the third quarter, according to a new Inside Mortgage Trends analysis of earnings releases. A diverse group of 26 banks that includes all the top lender-servicers and a number of regional players reported a combined $3.853 billion in mortgage-banking profits for the third quarter of 2016. That was up 23.5 percent from the previous period, and it was the strongest quarterly showing ... [Includes one data chart]

So far, the third quarter has seen several publicly traded commercial banks mark up the asset value of their residential mortgage servicing rights, but in general, the increases have been mild, to say the least. The only bank that reported a sizeable increase was Bank of America, which valued its MSR portfolio at 60 basis points at Sept. 30, an increase of 9 bps from mid-year. Of the reporting banks, BofA’s improvement has been the largest by far. BofA’s megabank competitor ...

Borrower retention – convincing a borrower to take a mortgage with their existing lender when the time comes for a new mortgage – can increase the value of servicing a new mortgage by 1.5 times to 3.0 times, according to calculations by Strategic Mortgage Finance Group. Matt Lind, a senior partner at Stratmor, came to that conclusion when considering the value of customer retention beyond trying to glean insight from the market price of servicing used in correspondent ...

The GSEs said treating items like payoffs, holdbacks and principal curtailments as closing costs in the Consumer Financial Protection Bureau’s disclosures would just confuse borrowers. Fannie Mae and Freddie Mac submitted comments to the CFPB last week in response to the bureau’s proposed amendments to the integrated disclosure requirements under the Truth in Lending Act and Real Estate Settlement Procedures Act. The comments focused primarily on aspects of the proposed rule that may potentially affect the Uniform Closing Dataset developed by the GSEs. The GSEs disagreed with the proposed rule’s plan to lump non-closing cost fees under...

The first-time homebuyer share of home purchases has declined significantly in recent months, according to the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. First-time homebuyers had a 34.8 percent share of purchases in September, based on a three-month moving average. That was the lowest share for first-time homebuyers since August 2014. The first-timer share has declined for four consecutive months, from 40.4 percent in May. Both current homeowners ...

The Cato Institute recently filed an amicus brief challenging the Federal Housing Finance Agency’s denial of compensation benefits to a former Freddie Mac CFO at the start of the conservatorship. The FHFA terminated Anthony Piszel two weeks after the government took over the GSEs in September 2008. The primary issue was whether a government prohibition on making golden parachute (severance) payments to terminated Freddie employees was illegal or not. Piszel appealed a judgment from the U.S. Court of Federal Claims dismissing his complaint that Freddie breached its contract and owed him payment for his golden parachute compensation.