Secondary market reform legislation formally introduced in the Senate this week provides more detail on key elements of an ambitious proposal to replace Fannie Mae and Freddie Mac with a new government MBS program, but it’s still widely seen as a starting point in a long process. The Housing Finance Reform and Taxpayer Protection Act of 2013, introduced by Sens. Bob Corker, R-TN, and Mark Warner, D-VA, includes a new section that would protect investors in MBS that carry guaranties from the Federal Mortgage Insurance Corp. from civil liability under federal and state law. Under the bill, S. 1217, the FMIC would sell...
The recent rapid rise in interest rates has some market participants talking about margin calls on MBS investors, but so far all the chatter appears to be speculative – although there still could be red ink out there, somewhere. At press time, the yield on the benchmark 10-year Treasury had stabilized at 2.54 percent. In mid-May the rate was 1.70 percent. That’s a run-up of 84 basis points. One secondary market official told...
Over the past two weeks, mortgage lenders have seen their application volumes and origination pipelines get whipsawed by rising interest rates. But it’s not the run-up in rates, per se, that set off alarm bells in the industry. It’s how fast rates climbed. As Inside Mortgage Finance went to press this week, the yield on the benchmark 10-year Treasury was at roughly 2.60 percent. On a historical basis, that’s an attractive rate – and as many lenders have pointed out: consumers can still obtain a 30-year fixed-rate conventional loan at 4 percent, depending on the points paid. But a month ago, the 10-year Treasury was...
The revised ranking for the first quarter shows that the top retail lender, Wells Fargo, produced $60.4 billion through this channel, or 12 percent of total originations for the period.
The Department of Housing and Urban Development is seeking additional authority from Congress to transfer FHA mortgage servicing in order to facilitate loss mitigation. The change would allow the FHA to require specific actions when a servicer is underperforming or has a low score on HUD’s Tiered Ranking System, including the transfer of servicing to an FHA-designated special servicer or requiring a servicer to enter into a sub-servicing agreement. With expanded powers, the FHA also may require a servicer to engage a third-party to assist in loss mitigation services. Such authority would enable the FHA to better avoid losses due to poor servicing and, thus, protect the MMI Fund, HUD said. Testifying before a Senate appropriations subcommittee, FHA Commissioner Carol Galante noted...
Closely-watched market share calculations for the retail mortgage channel have been recalculated by Inside Mortgage Finance. In the past, Inside Mortgage Finance has calculated retail market shares by dividing each firm’s retail originations by the total volume of loans originated during the period with no involvement by third-party originators, either mortgage brokers or loan correspondents. Observers have pointed out...[Includes two data charts]
Servicers appear to have won a battle with consumer advocates regarding state adoption of servicing requirements that exceed those established by the Consumer Financial Protection Bureau. The Council of State Governments this weekend decided against recommending California’s “Homeowner’s Bill of Rights” as model legislation for states, according to a spokesman for the CSG. The Mortgage Bankers Association had warned that piecemeal adoption of California’s bill would increase costs and create confusion. California’s Homeowner’s Bill of Rights included...
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