Freddie Mac is rolling out a new version of an old mortgage security product designed to distribute the credit risk of borrowers paying back their mortgages to the private markets. The government-sponsored enterprise has begun marketing a new product, the Structured Agency Credit Risk security, which is designed to lay off credit risk to the private capital market on a scalable basis without impacting the TBA market or increasing counterparty risk. Freddie attempted a similar product in 1998 before deciding it was a failure. A Freddie spokesman said...
Rep. Mel Watt, D-NC, did himself no favors nor did he appear to win any new votes by turning in a lackluster performance at his confirmation hearing last week, but industry observers say President Obama’s nominee to head the Federal Housing Finance Agency could yet win Senate confirmation … with time. Both in his prepared testimony and during questioning by members of the Senate Banking, Housing and Urban Affairs Committee, Watt placed a heavy emphasis on his biographical details, but he was light on mortgage-finance policy specifics. Republicans, as expected, politely hammered the Congressman on his technical qualifications, as well as his political independence, to serve a five-year term as the FHFA’s first permanent director.
Sponsors of the highly anticipated, bipartisan Senate legislation intended to reform the mortgage-finance system without Fannie Mae and Freddie Mac unveiled their final proposal last week.But with reform of the FHA more politically urgent and a more radical House bill waiting in the wings, even the Senate bill’s most avid industry supporters don’t expect the measure to gain much political traction in the near term.
Fannie Mae and Freddie Mac saw a marked decline in refinance business during the second quarter of 2013, but a strengthening housing market helped offset some of the lost volume. The two government-sponsored enterprises securitized $256.0 billion of single-family refinance loans during the second quarter, according to the Inside Mortgage Finance GSE Seller Profile, a quarterly statistical report based on loan-level, mortgage-backed securities disclosures. That was down 13.6 percent from ... [Includes two data charts]
Mortgage banking remained highly profitable during the first quarter of 2013, but the hefty margins earned in secondary market activity declined and production volume tapered off, according to the Mortgage Bankers Association’s quarterly performance report. The average firm participating in the survey generated $3.65 million in pretax income during the first quarter, off 22.5 percent from the previous period, the MBA said. That was still well above the $2.33 million in average earnings for the ...
Citigroup this week unveiled a $968 million legal settlement with Fannie Mae to cover current “potential future repurchase claims” for breaches of representations and warranties on 3.7 million first liens originated between 2000 and 2012. According to a statement issued by the nation’s sixth largest home lender, almost all of the money that will be paid to the GSE is “covered by Citi's existing mortgage repurchase reserves.”
To implement sustainable cost reductions, lenders and servicers should address four critical elements, according to analysts at PricewaterhouseCoopers. PWC said executives addressing consumer lending costs should develop a strong foundation, create breathing space, look at the system as a whole and embed a cost-conscious culture. “To create sustainable reductions in cost requires a comprehensive review of the organization, its strategic positioning and the underlying ...
Although it appears that the rate on the benchmark 10-year Treasury has finally stabilized, most mortgage professionals are operating under the assumption that the days of ultra-low rates are over. That may be the “bad” news. But there is good news in rising rates in the form of higher values attached to mortgage servicing rights. As FBR Capital Markets points out in a recent note to investors: “MSR holders are the clear winners” when it comes to higher rates. In its report, FBR lays out the basic ...
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