Fannie Mae and Freddie Mac have drummed up little support for their controversial proposal to pay mortgage servicers a flat fee for performing loans, but one top-tier lender has stepped forward to publicly endorse the idea. Ally Financial in a comment letter to the Federal Housing Finance Agency said it supports the so-called fee-for-service proposal, combined with a policy that would provide for the separation of excess interest-only cash flows from the underlying mortgage servicing rights. The company, which ranked as the fifth-largest servicer in the market as of the end of September, did...
Bulk sales of real estate owned properties by Fannie Mae, Freddie Mac and the FHA that would become rental properties may help relieve pressure from an excess of inventory for sale, but it will require a change in how the agencies have traditionally handled their foreclosure inventory. The Federal Reserve earlier this month made a strong case for an REO-to-rental strategy, arguing that even if it costs the agencies a little more in foreclosure losses it could help the broader housing market by firming up prices and shifting more units to meet growing demand for rental housing. Many private...
Servicers will be able to approve unemployed borrowers with Fannie Mae and Freddie Mac owned- or guaranteed-loans for six months of forbearance without prior approval from the GSEs under new policies announced last week. Freddie’s new forbearance option, rolled out at the direction of the Federal Housing Finance Agency, takes effect Feb. 1 and makes unemployed borrowers potentially eligible for up to 12 months of forbearance.
The Federal Reserve is calling for the design of a large-scale rental program of government-owned foreclosed properties as the best bet to moderate the inflow of unsold homes even as the Federal Housing Finance Agency shapes the eagerly awaited government REO reduction initiative.The Fed white paper, disseminated among the leaders of the Senate Banking and House Financial Services committees last week, recommends that the GSEs work to convert foreclosed properties into rental housing.The paper states that a government-facilitated REO-to-rental program could take many forms.
The Federal Home Loan Banks continue to show an investment preference for Fannie Mae and Freddie Mac mortgage-backed securities during the third quarter of 2011, posting a modest increase from the previous quarter, according to a new analysis by Inside The GSEs based on data from the Federal Housing Finance Agency.Ginnie Mae securities, meanwhile, remained popular within the FHLBank system during the three-month period ending Sept. 30, 2011.GSE MBS accounted for 68.9 percent of combined FHLBank MBS portfolios, up 1.7 percent from the second quarter of 2011. The Finance Agencys data do not separately break out Fannie and Freddie volume or share.
PHH Corp. over the last month has felt the pinch of being the largest mortgage banking business not associated with a depository institution as it faced some setbacks in lining up financing for its operations. The company this week priced a $220 million offering of 6.00 percent convertible senior notes that is being co-managed by JPMorgan Securities and BofA Merrill Lynch. That was up from the $150 million offering originally announced, and PHH gave the underwriters the option to purchase an additional $30 million. PHH will use the money to pay off $250 million of 4.00 percent convertible senior...
The Federal Reserve is urging government policy makers to consider more aggressive responses to the housing debacle, including a government-backed program to transform much of the real estate owned overhang into rental housing. In a white paper sent to Congress, the Fed suggested that a government-facilitated REO-to-rental program can boost the housing market and improve loss recoveries on REO. Such a program could take many forms, the Fed noted. The REO holder could rent the properties directly, sell the properties to a third-party investor who would rent the properties, or enter into a joint...
Fed Governor Sarah Bloom Raskin late last week stumped for creating an effective enforcement system to deal with shortcomings in the mortgage servicing industry that have come to light since the foreclosure crisis, as state officials pressed to expand a potential settlement over past abuses. The law is not a scarecrow where the birds of prey can seek refuge and perch to plan their next attack, Raskin said in a speech to a group of attorneys. The Fed governor said its important for servicers to have transparent, enforceable and sensible rules, adding that deferring to standard industry...
Mortgage industry groups are urging the U.S. Supreme Court to pay close attention to the wording of the Fair Housing Act specifically phrasing thats not in the 1968 law in deciding whether fair lending charges can be brought on the basis of disparate impact. In an amicus brief filed in the case of Magner v. Gallagher, mortgage trade groups said the Fair Housing Act requires proof of intentional discrimination and does not envision a violation based on disparate impact. The brief was filed by K&L Gates on behalf of the Independent Community Bankers of America, the Consumer Mortgage...
Refinance activity has represented more than half of home loan originations every year since 2006, and housing sales have been in a slump for the past five years. But individual mortgage lenders continue to carve out their own production strategies, including in some cases a devotion to the smaller purchase-mortgage sector. A new Inside Mortgage Finance analysis of loans originated under the four major agency mortgage programs through the first nine months of 2011 shows that many of the top overall producers beefed up their market share by aggressively originating...(Includes one data chart)