As the Federal Housing Finance Agency works to prepare the industry for the single security and common securitization platform, officials are keeping a close eye on consistency in prepayment speeds between Fannie Mae and Freddie Mac. The single security and CSP are on target for implementation in 2019, according to a new FHFA progress update released in December. In that report, the FHFA described in more detail the processes it has in place to minimize variance in prepayment speeds between Fannie and Freddie mortgage-backed securities that have the same coupon, maturity and issuance cohort.
The GSEs’ low downpayment programs are gaining some traction among first-time homebuyers. According to an analysis by Inside The GSEs, 97 percent loan-to-value mortgages now represent close to 15 percent of first-time homebuyer mortgages sold to the GSEs. The high LTV programs have grown gradually, but steadily, since they were introduced. But they were slow to catch on. By the end of 2015, the high LTV programs represented 5 percent of the FTHB market, which grew to nearly 10 percent at the end of last year. They represented approximately 14 percent of first-timer mortgages in the third quarter of 2017. The top three banks originating these low downpayment loans are...
Private mortgage insurers aren’t backing down on their push for the GSEs to take on more front-end credit-risk transfers. During a recent House Financial Services subcommittee hearing, it was the private sector’s turn to discuss housing-finance reform. While lawmakers and panelists mostly agreed that Fannie Mae and Freddie Mac, or their replacements, should tap multiple forms of credit-risk transfer, they disagreed on the type that future guarantors of mortgage-backed securities should utilize. Front-end transactions involve deeper coverage by private MIs. Advocates argued that with the more common back-end transactions, such as Fannie’s Connecticut Avenue Securities and Freddie’s Structured Agency Credit Risk deals, the GSEs still hold a significant first-loss exposure.
Fannie Mae and Freddie Mac sold more than 82,359 nonperforming loans through June 30, 2017, according to the Federal Housing Finance Agency’s fourth report highlighting nonperforming loan sales and borrower outcomes. And close to half the NPLs sold had been resolved. That number is up from the FHFA’s last report, in which 72,502 NPLs had been sold through December 2016. This represents about 10,000 in NPLs sold during the first six months of the year. The latest report shows that NPL sales through June represented a total unpaid principal balance of $16 billion, and had an average current loan-to-value ratio of 97 percent. The average delinquency of pools sold was 3.3 years.
The Mortgage Bankers Association wants to make sure that Fannie Mae and Freddie Mac aren’t infringing on the primary market as they take on new technology-based mortgage initiatives. The MBA noted that the “bright line” between the primary and secondary markets is crucial.For example, the trade group expressed some concern that Fannie’s Day 1 Certainty initiative is the type of program that may have unintended consequences on the primary market. Officials with the MBA told Inside The GSEs that Day 1 Certainty’s roll-out relied on a single vendor for each component, even though the technology was not new. “Several other vendors offered similar products,” the group noted.
After exploring the single-family rental market for the better half of a year, Freddie Mac an-nounced a $161 million pilot deal with CoreVest American Finance Lender. The government-sponsored enterprise said its foray into the market is aimed at providing affordable housing for low-income and working families.
Mortgage repurchase activity was up sharply at Freddie Mac during the third quarter, while buybacks were down at Fannie Mae, according to an Inside Mortgage Trends analysis of disclosures filed by the two government-sponsored enterprises. Loan sellers repurchased or made other indemnification related to $142.43 million of loans sold into Freddie mortgage-backed securities during the third quarter, a sharp 48.3 percent increase from ... [Includes two data charts]
Drivers for ride-sharing companies and other participants in the so-called gig economy largely work the jobs to earn extra money. But even with the supplemental earnings, many in the gig economy don’t expect to purchase a home any time soon, according to a survey by Fannie Mae. The lack of demand for mortgages from workers in the gig economy is significant because 16 percent of adults in the U.S. work in the sector, including ride sharing, food delivery, handyman services ...
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