Community mortgage lenders want the Federal Housing Finance Agency to put an end to pricing disparities caused by mortgage insurers offering discounts to Fannie Mae and Freddie Mac lenders based on their size or volume. And they recommend doing so in the same manner the agency solved pricing disparities over guarantee fees. The Community Home Lenders Association wrote the FHFA last week requesting that Director Mel Watt investigate the practice that the trade group says has become more prevalent. CHLA said it puts small lenders and their borrowers at a disadvantage. As a result, some individual CHLA members are even boycotting private MIs that engage in volume discounts.

The Federal Housing Finance Agency seeks oversight of counterparties that provide services to Fannie Mae, Freddie Mac and the Federal Home Loan Banks, according to its 2017 annual report to Congress published this week. In addition to reporting examination activity, the FHFA offers legislative recommendations. The agency discussed the regulated entities’ heavy involvement with third parties who provide “critical services” supporting the secondary mortgage market. The agency said this includes nonbank mortgage servicers for Fannie Mae and Freddie Mac. And while oversight of these counterparties is important to the safety and soundness of the GSEs, the FHFA argued that oversight can only happen now through contractual provisions.

The GSEs recently released their plans to improve the mortgage process for borrowers who have a limited proficiency of English and some point to disclosures as being a critical element of the plan. The Federal Housing Finance Agency has asked Fannie Mae and Freddie Mac to identify language barrier obstacles for potential borrowers, and come up with possible solutions. The agency’s plan established milestones with start dates this year through 2020. Fannie and Freddie are spending the first half of 2018 defining roles and responsibilities for both a resource clearinghouse and a language access working group consisting of housing representatives to work with consumer groups that support LEP consumers.

GSE shareholder litigation activity continues into mid-year with two new cases being filed in the past week. Joshua Angel, a corporate restructuring lawyer and owner of junior preferred stock, filed a lawsuit this week to sue Fannie Mae, Freddie Mac and their respective board of director members who were serving on Aug. 17, 2012, when the Treasury sweep was formalized. Angel seeks to recover damages from the defendants for his pro-rated share of the $10 billion dividend entitlement loss he and other junior preferred shareholders have incurred to date.

Housing-finance reform may want to take some cues from the mortgage-finance system in Denmark, according to the Federal Reserve Bank of New York in a new report comparing and contrasting the two systems. In fact, the creditor-friendliness of the Danish system means that relatively more price risk is borne by the homeowner. One of the bases for NY Fed’s recommendation is that, unlike in the U.S., the Danish system remained stable and solvent during the 2007-2009 financial crisis. And, despite falling home prices, the Danish system didn’t require government intervention or funding. The authors chose that system because they said it’s most similar to the model in the U.S.

Treasury Official Sees Major Impact from Single Security. A key Treasury Department official suggested that issuers of non-agency MBS may someday participate in the common securitization platform being developed by Fannie Mae and Freddie Mac. Craig Phillips, counselor to the Treasury, said the industry has made a lot of progress toward the launch of the single security that is scheduled for June 2019. “Industry preparedness is about an eight or nine on a scale of 10,” he said during remarks at this week's secondary market conference sponsored by the Mortgage Bankers Association in New York. Phillips characterized the...

Independent mortgage bankers lost money on loan production during the first quarter of 2018, according to preliminary figures reported by the Mortgage Bankers Association at the group’s annual secondary market conference in New York this week. Respondents to the quarterly mortgage banking performance survey reported, in aggregate, a negative margin in the “mid to high single digits” for the first quarter, said MBA Chief Economist Mike Fratantoni. Researchers are still putting together the ...

While numerous concerns have been raised about how capital requirements impact bank holdings of mortgage servicing rights, few banks are selling MSRs because of capital requirements or regulatory issues, according to an American Bankers Association survey. In 2017, 5.0 percent of banks sold MSRs due to regulatory requirements or capital treatment, up from a 2.0 percent share in 2016. And 12.0 percent of banks said they’re contemplating selling MSRs due to new regulatory ...

Servicers, lenders and other industry participants are starting to introduce artificial intelligence services to borrowers and use the technology internally. Late last week, Bank of America launched what it claims is “the first widely available AI-driven virtual financial assistant.” The assistant can help the bank’s customers complete tasks, including checking loan balances and scheduling mortgage payments. The assistant is being rolled out to the 25 million customers who use BofA’s mobile application ...

Homebuyers in Tampa, Kansas City (MO), Portland and New York saw the biggest mortgage rate savings by shopping around for home loans compared to buyers in other US cities, according to a new study by LendingTree. The rate spreads in the four cities are the largest for purchase-mortgage loans overall, while New Orleans, Salt Lake City and Indianapolis have the largest differences in refinance mortgage rates, the study found. Also, due to the large loan sizes, California borrowers ...