The mortgage servicing market maintained its steady growth pattern during the second quarter of 2017, inching up 0.7 percent to $10.430 trillion, according to new Federal Reserve data. That was the biggest number for mortgage debt outstanding since the first quarter of 2011, when the market stood at $10.439 trillion. Most of the growth has been in Fannie Mae, Freddie Mac and Ginnie Mae servicing but portfolio holdings of whole loans are also on the upswing. There was...[Includes two data tables]
Mortgage lenders that sell loans to Fannie Mae and Freddie Mac saw a modest increase in the volume of loans they repurchased from the GSEs during the second quarter of 2017, according to a new Inside The GSEs analysis of disclosure reports filed with the Securities and Exchange Commission. During the second quarter, lenders repurchased or made indemnifications on $244.44 million of single-family loans pooled in Fannie and Freddie mortgage-backed securities. That was up 2.5 percent from the first three months of the year. On a year-to-date basis, seller buybacks totaled $483.01 million, a 14.5 percent drop from the first six months of 2016.
Despite reports showing that many homeowners lack required flood insurance policies, Fannie Mae and Freddie Mac said data show that most of their loans do have the appropriate coverage. Recent hurricanes in Houston and Florida revealed that borrowers either never had coverage or let their policies lapse. Flood insurance is a requirement for GSE loans in designated flood areas and the mortgage giants say that servicers are responsible for enforcing the policies. Nevertheless, getting to the root of the disconnect is complicated. Although the GSEs said it’s up to servicers to evaluate whether loans meet flood insurance requirements, they said they also have their own systems in place to help ensure compliance.
Fannie Mae’s most recent reperforming loan sale of 10,700 loans went to Goldman Sachs subsidiary, MTGLQ investors. It was the GSEs’ fourth reperforming loan sale transaction of 2017. The loans were divided into three pools and totaled $2.4 billion in unpaid principal balance. MTGLQ won all three pools and is expected to close on Oct. 26. The largest pool consisted of 4,482 loans with an unpaid principal balance of $9.9 billion and average loans size of $220,626. Another pool had 4,200 loans with a UPB of $9.8 billion and average loan size of $234,433. And, the last included 2,001 loans with an aggregate UPB of $4.6 billion and an average loan size of $230,751.
Freddie Mac has decided to buy mortgages with appraisals made by trainee appraisers. The GSE made the announcement in a recent bulletin updating appraisal requirements. Freddie said it made the change in response to seller inquiries. “We are also specifying that an unlicensed or trainee (or similar classification) appraiser may perform a completion report as long as a supervisory appraiser also signs the completion report,” said Freddie. The Loan Product Advisory tool has already been updated to reflect the change. The appraisal shortage likely played a role in that decision as Realtors and lenders complained about a lack of qualified appraisers and out-of-town appraisers not familiar with local market conditions incorrectly valuing homes.
RSS