Increasing Fannie Mae and Freddie Mac guaranty fees, as well as “incrementally” reducing the government-sponsored enterprises’ loan limits throughout the next decade, would save the government approximately $20 billion, according to the Congressional Budget Office. In a report published last week, the CBO projected the budgetary savings that would occur under two proposals. “By CBO’s projections under current law, the mortgage guaranties that the GSEs issue from 2015 through 2023 will cost the federal government $22 billion,” noted the report. “That estimate reflects the subsidies inherent in the guaranties at the time they are made.” Under one scenario, the average GSE guaranty fee would increase...
Private-equity firms such as Pershing Square Capital Management and Fairholme Funds are gobbling up the common and preferred shares of Fannie Mae and Freddie Mac, a trend that may continue as long as the two stay profitable and Congress dithers with how to end their conservatorships. “There’s some value there,” said Brian Harris, a senior analyst with Moody’s Investors Service. “The hedge funds believe the two will continue to earn money.” Industry observers who closely follow the government-sponsored enterprises predict...
Mortgage lenders will have until Aug. 1, 2015, to implement the new integrated mortgage-disclosure forms and related rule issued by the Consumer Financial Protection Bureau this week. The new forms will replace the existing federal disclosures under the Real Estate Settlement Procedures Act and the Truth in Lending Act. Bureau officials hope they will help consumers better understand their options, choose the deal that’s best for them, and avoid costly surprises at closing. The new, three-page loan estimate form will be provided...
Tom Popik, research director of Campbell Surveys, said buyers have a number of incentives to pay with cash. “You get about a 10 percent discount on the purchase price,” he noted.
Mortgage industry officials note that the size and complexity of the disclosure rules and other regulations taking effect in January will cause huge operational and system challenges.
Mortgage brokers accounted for 9.6 percent of all loans originated in the the third quarter, one of the lowest readings ever, according to exclusive survey figures from Inside Mortgage Finance.
Freddie Mac projects that interest rates on 30-year fixed-rate mortgages will hit 5.00 percent by the end of 2014, with little impact on affordability.
Speaking at a housing finance forum sponsored by the Urban Institute and CoreLogic, Gene Sperling, a White House economic advisor, said the Obama Administration believes the “risks are simply too great and that this would recreate the problems of the past.”
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