Fannie Mae and Freddie Mac this week reported a combined $15.1 billion in net income during the second quarter of 2013, as the two government-sponsored enterprises came closer to having paid the government as much in dividends as they have taken in bailout funds. Fannie reported $10.1 billion in net income, the company’s sixth consecutive quarterly profit. During the first quarter, Fannie posted $58.7 billion in net income, boosted by its release of $50.6 billion in deferred tax assets. Under the revised conservatorship arrangement, any GSE net worth exceeding $3.0 billion is forked...
Some servicers have retroactively applied losses to non-agency MBS from principal forbearance completed long ago even after suggesting that such losses were unlikely. Analysts warn that further losses are likely, at the expense of investors in the senior tranches of non-agency MBS. In May, some 170 non-agency MBS serviced by Ocwen Financial took combined losses of more than $1.0 billion due to accounting for principal forbearance that occurred before July 2012. The retroactive losses should have been reported at the time of the loan modification, according to guidelines for the Home Affordable Modification Program. The losses were included in remittance reports for May after servicing on the deals transferred from Homeward Residential to Ocwen. Later, 231 non-agency MBS serviced by Nationstar Mortgage took...
The Federal Housing Finance Agency, after months of interviewing executive search firms, has hired the Washington-based Spencer Stuart to find a chief executive to man the helm of the “common securitization platform” project being developed by the two government-sponsored enterprises. According to sources familiar with the regulator’s plans, the starting salary for the job is in the range of $450,000, plus benefits. Sources say FHFA has handed...
Fannie Mae said that, assuming publication of the CFPB final rule comes in the fall, more information will be available later in 2013 on implementation plans.
The Federal Deposit Insurance Corp. would be prohibited from repudiating covered bonds when resolving a failed banking institution under the provisions of a controversial housing reform bill put together by the Republican leadership of the House Financial Services Committee and passed out of committee last week. That prohibition would go a long way toward resolving the long-standing hurdles that have thwarted development of a covered bond market in the United States. But it also amps up the level of controversy associated with H.R. 2767, the Protecting American Taxpayers and Homeowners Act of 2013, introduced by Committee Chairman Jeb Hensarling, R-TX, and Rep. Scott Garrett, R-NJ, the architect of a covered bonds bill introduced in the 112th Congress. The relevant provisions in the PATH Act are...
The four private mortgage insurers that survived the housing market collapse reported a combined $38.3 million in net income during the second quarter of 2013, the first positive result for the group since the second quarter of 2007, according to a new Inside Mortgage Finance analysis. Over that time, the four firms racked up a staggering $19.23 billion in losses, watched three competitors go down the drain, cobbled together various regulatory compliance strategies to stay in business and saw a huge chunk of the market get gobbled up by the FHA. But one new entrant gained...[Includes two data charts]
Fannie Mae, Freddie Mac and mortgage-backed securities trustees representing investors in non-agency MBS sued the city of Richmond, CA, this week to stop it from further implementing a plan to use eminent domain authority to seize and purchase performing underwater mortgages. Wells Fargo and Deutsche Bank, acting as trustees for a group of investors that includes BlackRock, Inc., Pacific Investment Management and the government-sponsored enterprises, filed the lawsuit in federal court in San Francisco at the behest of certificate holders. The plaintiffs are asking the court to declare the “Richmond Seizure Program” unconstitutional and in violation of California laws, and to order city officials to end the program. Securitizers and investors are...
Three months ago, CashCall President Paul Reddam said he was open to offers on his refinance shop, but that was before a jump in interest rates signaled a downturn in refi lending. At the midway point in 2013, CashCall ranked as 26th in mortgage originations, according to Inside Mortgage Finance, and refi loans accounted for virtually all of its business. These days Reddam isn’t returning telephone calls and competitors and investment bankers that specialize in mortgage acquisitions say that of late, they’ve heard little about CashCall’s situation. “I’m getting resumes from some of their employees,” said one mortgage CEO who is based in the same Southern California market as CashCall. “We’re seeing a lot of resumes from refi shops.” This executive, who focuses on purchase lending and spoke on the condition his name not be used, said...
Given the complexity of the 3 percent points-and-fees cap for qualified mortgages under the ability-to-repay rule and the imperative of getting it right, mortgage lenders could still find themselves outside the compliance box if they ignore the fair lending implications of their business practices. “Fair lending is definitely something we have to take into consideration in every decision we make and every rule we come across,” said Ginger Moore, the compliance officer at PrimeLending, during a webinar last week sponsored by Inside Mortgage Finance. One example is...
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