PennyMac Mortgage Investment Trust recently entered into its third front-end risk-sharing trans-action with Fannie Mae. The real estate investment trust said it has seen strong returns from such deals, potentially paving the way for other lenders to directly share credit risk with the government-sponsored enterprises. The third credit-risk transfer agreement between PennyMac and Fannie involves $5.0 billion in unpaid principal balance of mortgages acquired by the nonbank from correspondents. In a slide presen-tation, the REIT said it expects to invest $175.0 million as part of the CRT deal. PennyMac also recently completed deliveries into its second CRT transaction with Fannie. The agreement involved mortgages with an unpaid principal balance of $4.25 billion and a $149 million in-vestment by the REIT.
Radian Guaranty became the latest private mortgage insurer to announce proposed changes to its premium rate card as it followed the rest of the industry in moving more towards risk-based pricing. Radian’s announcement brings to six the number of private MIs that have updated rate cards to align with the new capital requirements under the government-sponsored enterprises’ Private Mortgage Insurer Eligibility Requirements (PMIERs) that were implemented in January 2016. United Guaranty has yet to make an announcement, and a spokesman declined to comment.Some MIs have opted for earlier effective dates for the new pricing, while others have decided on either April 4 or April 7, 2016, as their effective date.
The independent dispute-resolution option recently announced by Fannie Mae and Freddie Mac was billed as the last step in the three-year effort to re-duce seller buybacks, but the govern-ment-sponsored enterprises have a new project in the works. The GSEs are working on a “com-plementary effort to assess the possibility of granting appraisal-related representation-and-warranty relief shortly after acquiring a loan,” the Federal Housing Finance Agency revealed in its recent progress report on the GSEs. Fannie and Freddie last year rolled out new tools to help lenders assess appraisal quality...
A recent federal appeals court ruling that held Fannie Mae and Freddie Mac are private companies under the False Claims Act, and not government agencies, has stoked speculation about what it means for shareholder lawsuits challenging the Treasury Department’s net-worth sweep of capital from the two government-sponsored enterprises. On Feb. 22, the Ninth Circuit Court of Appeals ruled that claims cannot be brought against the GSEs under the False Claims Act because they are private companies. In United States ex rel. Adams v. Aurora Loan Services, Inc., et al., the government alleged FCA claims against a handful of lenders because of erroneous representations and warranties, similar to a number of FCA lawsuits successfully...
If Freddie Mac needs a cash draw from the U.S. Treasury this year because of hedging losses, the Treasury Department could avoid tapping taxpayer funds by changing the quarterly sweep of the government-sponsored enterprise’s profits to an annual payment. That way, cash could stay on the books of a GSE longer and could be tapped in the event of a loss. At least that’s the legal theory being kicked around by several industry officials – including trade group representatives – who fear the political ramifications of a GSE needing Treasury assistance. To change the quarterly earnings sweep, the Federal Housing Finance Agency in conjunction with Treasury would have to change the terms of the conservatorships by altering the preferred stock...
The past year has been an ugly one for institutional investors that 24 months ago were gorging on certain publicly traded mortgage stocks, in particular Ocwen Financial and PHH Corp. A careful reading of 13-G/A statements recently filed with the Securities and Exchange Commission paints a portrait of hedge funds, private-equity firms and other “early in” buyers paring their positions in these companies, essentially giving up on them ever coming back. …
The supply of “conforming-jumbo” mortgage originations flowing into agency mortgage-backed securities programs contracted sharply in the fourth quarter of 2015, but overall jumbo lending still held up better than the overall market, according to a new Inside Mortgage Finance analysis. During the final three months of 2015, Fannie Mae, Freddie Mac and Ginnie Mae securitized $24.69 billion of mortgages with loan amounts that exceeded the baseline conforming loan limit, $417,000… [Includes three charts]
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