Fannie Mae and Freddie Mac are both working on upgrades to the servicing marketplaces they operate that facilitate the sale of flow servicing rights into the secondary market. The goal is to make the MSR sales process quicker, seamless and more transparent – and at no cost to the loan seller. On the surface it all sounds good, but a handful of investment banking executives told Inside The GSEs they’re worried about the future direction of the servicing marketplaces and want to make sure they don’t encroach on their turf. None of the firms that broker the sale of MSR were willing to go on the record regarding their gripes.
The Federal Housing Finance Agency’s proposed new risk-based capital requirements for the GSEs released last week has some industry participants asking the regulator to take it a step further. Although the $180.9 billion combined capital requirement won’t go into effect now and is merely an example of what would be if Fannie Mae and Freddie Mac were not in conservatorship, the FHFA is seeking comment on the proposal. Capital requirements for the duo have been suspended since the 2008 conservatorship, but FHFA Director Mel Watt said it’s important for the regulator “to articulate our views on capital requirements and to start a healthy discussion about the amount of capital the enterprises should have to appropriately shield taxpayers from assistance.”
Rep. Maxine Waters, D-CA, introduced a bill last week that would require the Federal Housing Finance Agency to supervise servicers that do business with Fannie Mae and Freddie Mac. Waters said H.R. 6101, the Homeowner Mortgage Servicing Fairness Act of 2018, was drafted to better protect homeowners facing foreclosure. Just two months ago, the ranking member of the House Financial Services Committee also introduced a bill to prevent foreclosures on certain FHA borrowers. She argued that despite the lessons learned during the foreclosure crisis, bad behavior by mortgage servicers continues. “Borrowers can’t choose their servicer, so it’s especially important that Congress provide strong protections to prevent servicers from taking advantage of borrowers and to protect borrowers from...
Fannie Mae introduced a program this month to boost manufactured home ownership by giving manufactured housing properties the same advantages as site-built homes. Manufactured housing under the MH Advantage initiative is designed to meet specific construction, architectural and energy efficiency standards that are more in line with site-built homes.Fannie explained that the specific architectural and aesthetic features include a higher pitch roofline, lower profile foundation, garages or carports and dormers. The MH should also be built with more durable siding materials and energy efficiency standards. One of the goals is to encourage more consumers to consider manufactured homes and help bridge the gap in affordable housing.
Fannie Mae and Freddie Mac recently updated their servicing guides with a new consolidated forbearance plan to help servicers assist struggling borrowers. There will now be one single policy for forbearance plans. Fannie noted that the goal was to make it easier for servicers to assist borrowers who are experiencing a short-term hardship and to simplify servicing by making it more efficient. The plan covers challenges related to unemployment, unique hardships, military service, and disaster events. This also helps simplify the GSEs’ policies on disaster assistance. Under the new requirements, the servicer may approve forbearance plans that last up to six months and may offer consecutive forbearance plans of up to 12 total months without requiring a Borrower Response Package.
Fitch Accepts GSE Valuation Tools in New RMBS Criteria. Fitch Ratings updated its residential mortgage-backed securities criteria to allow Fannie Mae’s Collateral Underwriter and Freddie Mac’s Loan Collateral Advisor to be used as third-party support of original appraisal in U.S. RMBS transactions. This allows for use of CU or LCA in support of appraisals for conforming and non-conforming loans that are less than two years old and are secured by one-unit single-family properties. FHFA’s Fifth NPL Sales Report. Fannie Mae and Freddie Mac sold 90,921 nonperforming loans with a total unpaid principal balance of $17.4 billion through Dec. 31, 2017, according to the most recent NPL sales report. NPLs sold had average...
The Trump administration late this week published its thoughts on ending the conservatorships of Fannie Mae and Freddie Mac, aiming to reduce their role in the housing-finance market – while providing an explicit U.S. guarantee on conventional MBS.
MBS guarantee fees currently charged by Fannie Mae and Freddie Mac are at levels sufficient to meet capital requirements recently proposed by the Federal Housing Finance Agency, according to industry analysts. The proposal could also bring attention to cross-subsidization in g-fee pricing, especially under a new FHFA director.
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