Clayton noted 907 compliance findings from its review. However, Fitch said the findings were deemed to be out of scope and waived by Fannie due to the limited scope of its post-close review for compliance.
The low profile of the FHLBs, which has served the system so well in the past, has become a “sizable policy risk” as the relatively few people who will be directing housing finance reform know what the system does.
“The exodus of a majority of the pre-crisis nonbank entities within the mortgage arena provides an opportunity for banks to re-establish their position within the mortgage market,” according to regulators in Connecticut.
On the servicing side of the balance sheet, Citigroup reported $180.3 billion in third-party servicing rights, a 2 percent decline from the same period last year.
Even due diligence firms such as Allonhill LLC of Denver have trimmed staff because their bank clients no longer need to conduct as many forensic reviews on legacy loan files. Allonhill was recently sold to Stewart Title, which hopes to grow the firm’s presence in the jumbo and nonconforming sectors.
Mortgage banking officials tracking the issue believe that if the agency is going to lower Fannie Mae/Freddie Mac loan limits for 2014 it will need to codify those changes by mid- to late October to give lenders time to update their technology systems.
FHA and VA are urging mortgagees and lenders to extend all possible assistance to borrowers who have been furloughed, laid off or suffered a decline in income because of the government shutdown.
Correspondents are an especially good source of purchase mortgages. During the third quarter, purchase mortgages accounted for over half (50.5 percent) of correspondent-originated loans securitized by Fannie Mae and Freddie Mac.
KBRA pointed out that one jumbo MBS issuer said it will accept mortgages where lenders have implemented procedures to either close the loans with an exception or review IRS transcripts post-closing.
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