Cowen: “We continue to believe the Senate Banking Committee must release a legislative plan in 2017 for Fannie and Freddie if it is to be enacted in the 115th Congress.”
Most servicers of Fannie Mae and Freddie Mac single-family mortgage-backed securities saw growth in their servicing portfolios during the third quarter, but a handful of top banks continued to buck the trend.A new Inside The GSEs analysis of MBS disclosures shows $4.629 trillion of Fannie/Freddie servicing outstanding at the end of September. That was up 1.8 percent from the previous quarter, with Fannie (up 2.1 percent) gaining market share on Freddie (up 1.3 percent). Ginnie Mae servicing remained a faster-growing market, with $1.749 trillion outstanding, up 2.2 percent from the end of June. Large banks continued to show tepid interest in the GSE servicing market.
Fannie Mae and Freddie Mac are poised to report robust earnings for the third quarter, likely blowing past results of the prior two periods, according to an analysis by Inside The GSEs. The only question now is this: Just how good will it be? “And most of that money will be swept into the Treasury,” noted Tim Rood, a former Fannie Mae executive who now heads The Collingwood Group. Not only did the GSEs benefit from a strong origination and MBS issuance market in 3Q17, but a previously announced legal settlement with Royal Bank of Scotland will finally hit the books.
Federal Housing Finance Agency Director Mel Watt said the likelihood of a draw from Treasury is growing fast in a reply letter to the 15 trade groups that wrote late last month advocating for legislation instead of recapitalization. Watt reiterated his position in the Oct. 12 letter and said while he appreciates their views, he has expressed “repeatedly and publicly” that the declining capital buffers leave Fannie Mae and Freddie Mac with no ability to absorb potential losses. “FHFA is concerned that in the absence of a sufficient buffer, normal operating losses, such as from interest rate volatility and the accounting treatment of...
Freddie Mac teamed up with a financial technology company in a pilot program aimed at helping low and moderate-income borrowers with their loan payments. Last week, the GSE announced its partnership with EarnUp, a platform that assists consumers with making their payments on time and gives personal recommendations on paying down their debts. Freddie and EarnUp believe that borrowers are more likely to stay current on their loan payments if they are given a quick and easy option to do so. By working with one of three non-profit housing counseling organizations, Freddie said that consumers can take advantage of EarnUp for 12 months with no cost.
Since the Federal Housing Finance Agency Office of the Inspector General was launched in 2013, the OIG said it has made more than 375 recommendations to the FHFA to improve efficiency and reduce fraud. To keep track of its long-running list of recommendations, including those that are currently opened and those that were rejected and not implemented by the agency, the OIG published a compendium of recommendations that covers up to Oct. 1, 2017. “OIG typically relies on materials and representations from the agency to close its recommendations and may close some recommendations based on the agency’s representations as to the corrective actions it has...
Freddie Mac and Fannie Mae will have a new evaluation process for determining whether a borrower is eligible for a conventional mortgage loan modification as of July 1, 2018. The GSEs noted that the new imminent default evaluation process was designed to simplify the process for servicers and borrowers to better identify those who need assistance. This new evaluation process was developed at the direction of the Federal Housing Finance Agency and it will replace the current Imminent Default Indicator test introduced by Freddie in 2010. In order for a borrower’s monthly payment to be considered in imminent default for eligibility...
The FHA could be in position to become a much bigger rival to Fannie Mae and Freddie Mac, according to one analyst, basing his observation on U.S. Department of Housing and Urban Development Secretary Ben Carson’s comments late last week. Jaret Seiberg, analyst with the Cowen Washington Research Group, said implications Carson made in regards to the False Claims Act and premium cuts led him to believe that the FHA may give the GSEs a run for their money competition wise. During his testimony before the House Financial Services Committee, Carson said that the Trump administration is working to change the False Claims Act policy...
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