The practice of an individual investor purchasing a property, fixing it up and reselling it for a profit – an activity so prevalent before the financial crisis that it spawned television shows – is making a return, especially in certain markets, according to CoreLogic. “Flipping was at an all-time high before the housing bubble burst because of easy access to credit and speculation for higher home prices,” said Bin He, principal economist at CoreLogic, in a recent blog post ...

Altisource Residential Corp. this week reached an agreement with a group of activist investors who control about 2.5 percent of the company’s stock and were concerned about the firm’s shift toward the single-family rental market. Altisource agreed to add two new independent directors and continue a $100 million stock buyback initiative. The so-called RESI Shareholders Group led by BLR Partners, a private equity firm, agreed to withdraw its nominations for replacements of ...

Fannie Mae and Freddie Mac issued a combined $68.91 billion of single-family mortgage-backed securities in April, a 3.8 percent increase over their production in March, according to a new Inside The GSEs ranking and analysis. So far, however, the 2016 market is still lagging by 10.6 percent the production volume during the first four months of last year. While year-to-date purchase-mortgage business was up 12.2 percent for the two GSEs, the refinance market through April was down 24.3 percent from the same period in 2015. Fannie issuance was up 9.9 percent from March, including a 15.4 percent spike in refi activity.

Freddie Mac posted a net loss and Fannie’s profits sagged in the first quarter of the year, prompting some industry groups to renew their calls for the GSEs to rebuild capital. A surprise interest rate decline in the first quarter of 2016 resulted in sharply lower net income at Fannie and Freddie. The GSEs booked a combined $7.37 billion in net derivative losses for the first quarter that compromised most of their income from their core businesses. Since 2012, when the two GSEs became profitable again, they have booked $23.46 billion in hedging losses. Both GSE CEOs pointed to volatility in the market as having affected earnings this quarter.

The Federal Housing Finance Agency recently raised the caps of multifamily purchases by Fannie Mae and Freddie Mac, by $4 billion. The cap was increased from $31 billion to $35 billion. With the GSEs already having a huge market share in multifamily finance, 78.3 percent according to recent figures by affiliated publication Inside MBS & ABS, the FHFA said an increase in the caps is warranted due to the larger-than-expected market this year. Recent projections by the mortgage giants show that they are issuing multifamily mortgage-backed securities in 2016 at a rate that may exceed $100 billion by the end of the year.

Less than 1 percent of borrowers will be able to take advantage of the Federal Housing Finance Agency’s new principal reduction program, according to recent estimates from RealtyTrac data, which reinforces the concerns of some who believe the progress is too little, too late. The California-based firm that specializes in data on foreclosed and underwater properties said that out of the 6.7 million seriously delinquent underwater properties in the US at the end of the first quarter of 2016, about 0.50 percent, or 33,622, would potentially qualify for the principal reduction program. When the program was announced in April, the FHFA ackowledged that only a select group of troubled borrowers will be eligible.

The GSEs are preparing big updates to their loan origination tools and one of the most noticeable changes will be Fannie Mae’s use of trended credit data to help more consumers qualify for a mortgage. Fannie will be rolling out Desktop Underwriter 10.0 during the weekend of June 25. Trended credit data relies on expanded information on borrowers’ credit history that shows the balance, minimum payment due and amount that is generally paid to determine if the consumer regularly pays off debt or carries a revolving balance. By using trended credit data in the risk assessment, Fannie said it allows for a more thorough analysis of the borrower’s credit history and is a “powerful predictor” of risk.

While many applaud the Flood Insurance Market Parity and Modernization Act that passed the House unanimously late last month, one mortgage group says the bill could cause problems for Fannie Mae and Freddie Mac. Currently, homeowners can only get coverage from the National Flood Insurance Program. The bill, H.R. 2901, expands flood insurance options by including private flood insurance, and requires the GSEs to accept any private flood insurance company a borrower chooses, as long as the company is financially sound. It also lifts certain federal restrictions placed on insurance companies and gives states more flexibility to license and regulate private flood insurance. Rep. Dennis Ross, R-FL, who co-sponsored H.R. 2901 with Rep. Patrick Murphy, D-FL, said the...

Congress should encourage a large increase in the amount and types of risk-transfer transactions the GSEs take on, Rep. Ed Royce, R-CA, said while speaking on a panel focused on restarting the private market for mortgage credit. Royce said that would include both back-end and front-end risk sharing. “We also have to figure out how to promote risk-transfer transactions that allow access to all types and sizes of mortgage originators,” he said. Real estate investment trusts, for example, which account for just 2 percent of risk-sharing transactions, face regulatory challenges that limit their involvement. Stanford Kurland, CEO of PennyMac Financial Services, said it addressed some of the REIT issues in structuring its PennyMac Mortgage Investment Trust.

In one of the latest proposals for GSE reform, a trio of authors suggested that most other proposals have been too “complicated” and suggest that Fannie Mae and Freddie Mac morph into a Ginnie 2.0 structure. They said this would utilize the best of the GSEs’ core capabilities and Ginnie Mae’s functionality. Ginnie is best suited to support the conventional market of Fannie and Freddie while dropping the more harmful aspects, such as their large mortgage portfolios and interest rate and credit risk, said the authors, who include Jim Park, CEO of the Mortgage Collaborative. They suggested that the Federal Housing Finance Agency transfer the necessary GSE components, such as key employees, underwriting...