Freddie Mac's "low activity fee" will be mostly eliminated. However, it will still apply to originators that have not sold a loan to the GSE in 36 months.
A new “pragmatic” secondary market reform plan released by four housing experts closely resembles the bipartisan legislation being drafted by key members of the Senate, including an ambitious implementation timeline that says the overhaul could be accomplished in about three years. Sponsored by the Milken Institute, the Urban Institute and Moody’s Analytics, the “Pragmatic Plan for Housing Finance Reform” features a new government MBS guaranty that would cover catastrophic losses after private credit enhancement is exhausted. Like the legislation being drafted by Senators Bob Corker, R-TN, and Mark Warner, D-VA, it would create a new Federal Mortgage Insurance Corp. to manage the new government MBS guaranty. Under the proposal, MBS insurers would be...
Wall Street is concerned that the further away a loan is from getting safe harbor protection as a qualified mortgage, the more legal uncertainty and higher costs there will be associated with it.
With the Federal Housing Finance Agency working on a common securitization platform for Fannie Mae and Freddie Mac, market participants are beginning to ask whether the residential finance sector really needs two government-sponsored enterprises. This week, at a policy forum in Washington, MBS co-inventor Lewis Ranieri and former GSE regulator James Lockhart suggested that the industry doesn’t need both Fannie and Freddie. The thinking is that a common securitization platform will facilitate the transition to a standardized GSE MBS, with slight variations, that would eliminate the current pricing differentials between Fannie and Freddie MBS. Speaking at the Bipartisan Policy Center, Lockhart noted...
The Mortgage Bankers Association called for the Federal Housing Finance Agency to update standards for representations and warranties provided to the government-sponsored enterprises and asked for more transparent underwriting standards. “Confusion and uncertainty around representations and warranties standards continue to cause lenders to add their own overlays to the existing GSE credit standards,” said Bill Cosgrove, the MBA’s vice chairman. “As a result, lenders are only offering mortgages to those with the most pristine credit for fear that any borrower default will trigger costly repurchase requests.” The MBA detailed...
Fed Chairman Ben Bernanke indicated that the central bank is leaning toward scaling down its MBS purchases later this year, and that rapidly rising mortgage interest rates don’t pose a major threat to the fledgling housing recovery.
Private MBS investors will likely see reduced competition from the Federal Reserve later this year if the central bank begins to slow down its purchases of agency MBS, but there is also likely to be a sharp drop in new MBS supply at the same time. The Federal Open Market Committee made no changes in its policy of adding $40 billion a month to its massive $1.165 trillion portfolio of agency MBS, in addition to reinvesting payments from its agency debt and MBS holdings. It also promised to closely monitor economic and financial developments and stands prepared to increase or decrease its MBS purchases. But Fed Chairman Ben Bernanke later indicated...[Includes two data charts]
The Supreme Court of the United States announced this week that it will hear a legal dispute that would determine whether the Fair Housing Act – and perhaps, by extension, the Equal Credit Opportunity Act – permit claims under the “disparate impact” theory of discrimination. “The threshold issue on appeal is whether plaintiffs may use disparate impact to allege a violation under the Fair Housing Act rather than proving liability by demonstrating an actual intent to discriminate,” explained attorneys with the Dykema Gossett law firm. In Township of Mount Holly, New Jersey v. Mt. Holly Gardens Citizens in Action, the plaintiff citizen group is challenging...
The amount of home mortgage debt outstanding continued its post-crisis downward spiral in the early months of 2013, although the agency servicing market grew slightly, according to a new analysis and ranking by Inside Mortgage Finance. The Federal Reserve reported total home mortgage debt outstanding of $9.868 trillion as of the end of March, down 0.6 percent from the previous quarter. Under pressure from falling house prices and the collapse of the non-agency market, the supply of MDO has been in steady decline since peaking at its all-time high of $11.195 trillion at the end of 2007. Single-family servicing associated...[Includes two data charts]
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