New housing finance structures created to increase private capital would leave borrowers with slightly higher interest rates but greatly reduce federal costs, according to a new report from the Congressional Budget Office. The report examined several structures, ranging from a fully federal guarantee on mortgage-backed securities to a largely private market. On a “fair value” basis, it will cost the federal government $19 billion over the next 10 years to backstop an estimated $12 trillion in Fannie Mae and Freddie Mac mortgage-backed securities. The CBO notes the cost “represents the estimated amount that the government would have to pay private guarantors to bear the credit risk of the new guarantees.”
John Anzalone of Invesco Mortgage: “In particular, there are a few very aggressive large buyers out there that get a lot of attention and have caused quite a bit of spread compression…”
Increases to interest rates on mortgages are prompting changes in the types of refinances that are being originated. The cash-out share of refi business is increasing and credit quality is declining, according to an analysis by CoreLogic. Frank Nothaft, an executive and chief economist at CoreLogic, projects that the cash-out share of refi business will be near 40.0 percent this year. He said that would be the highest share for cash-out refis since 2005. In 2017, around 25.0 percent of refis ...
Sam Khater, chief economist at Freddie Mac, said some prospective homebuyers didn’t complete transactions this summer due to a limited supply of homes for sale…
Despite calls by the industry to improve and clarify the process, the FHA has yet to make a move to meet industry demands for a more detailed defect taxonomy…
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