A strong surge of purchase-mortgage business helped lift Fannie Mae and Freddie Mac production of single-family mortgage-backed securities in May, according to a new Inside The GSEs analysis. Credit characteristics in May production were relatively unchanged, however. The two GSEs securitized $65.63 billion of single-family MBS last month, a 6.8 percent increase from April’s volume. Most of the gain came from a 23.6 percent jump in purchase-mortgage business as home buying season kicked into gear. Refinance volume was up slightly, and neither ... [Includes two data charts.]
There are benefits to merging Fannie Mae and Freddie Mac with the Department of Housing and Urban Development, according to one conservative think tank opining on the future of the GSEs.The American Action Forum said because the government-sponsored enterprises are being funded in part by taxpayers, and treated as being on the federal budget, the goal should be to align policy with the budget. “This raises an intriguing possibility. Merge Fannie and Freddie into the Department of Housing and Urban Development,” said Douglas Holtz-Eakin president of the AAF and a former director of the Congressional Budget Office in the early 2000’s.
Some banks may be manipulating prices in Fannie Mae and Freddie Mac unsecured debt, according to several investigations launched late last week.The Department of Justice has reportedly opened a criminal investigation while the law firm of Hagens Berman is investigating the potential fraud.They suspect that traders from several banks have engaged in a coordinated attempt to manipulate pricing. Hagens Berman attorneys encourage investors and whistleblowers to report any information about potential antitrust violations and other fraud in the bond trading market to a tip line they recently established. This type of fraud has a large impact on market participants, according to Steve Berman, managing partner of Hagens Berman.
Fannie Mae and Freddie Mac are taking note of the growing number of borrowers earning extra income outside of the traditional weekday, 9-to-5 job and look to make mortgage underwriting more accommodating to this demographic.The gig economy is made up of consumers providing on-demand services such as driving for Uber or Lyft, renting rooms in their homes via Airbnb type outlets, and providing personal services such as handyman tasks or deliveries. A recent survey by Fannie showed that 71 percent of lenders reported having had borrowers with gig employment income apply for a mortgage over the past year and about 89 percent expect this trend to grow over the next few years.
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