While the industry continues to debate the merits of allowing Fannie Mae and Freddie Mac to build a capital cushion for “zero day” in 2018, investors in MBS have a different agenda: making sure that whatever the future holds for the government-sponsored enterprises, it had better include a federal guarantee on conventional mortgage securities. Without it, the MBS market would suffer greatly – as would residential lending and the sale of new and existing homes. So far, no one knows...
Purchase-mortgage lending saw a big drop in volume during the first quarter of 2017, but indicators suggest that the sector has been rebounding in recent months and will post a solid gain by the time the year is over. An estimated $205.0 billion of purchase mortgages were originated in the first quarter, a sizable 19.6 percent decline from the previous period. But with an even bigger 44.6 percent slump in refinance lending, purchase mortgages accounted for over half (53.2 percent) of total first-lien originations in the first three months of the year. It was...[Includes three data tables]
The Consumer Financial Protection Bureau last week announced it will assess the effectiveness of its ability-to-repay/qualified-mortgage rule, as per the requirements of the Dodd-Frank Act, and is asking for public input. The CFPB will examine the impact of major provisions of the rule on mortgage costs, origination volumes, approval rates and subsequent loan performance. A special focus is on self-employed borrowers, those with seasonal or part-time income and borrowers with income from assets. Another topic for review is...
With interest rates projected to rise, lenders are putting an increased emphasis on purchase mortgages. A little-used feature in post-crisis originations could help boost purchase-mortgage originations: temporary interest rate buydowns. A temporary buydown can help increase a lender’s “market potential” by offering borrowers lower initial payments and the stability of predictable payment increases, according to Freddie Mac. Temporary buydowns generally last...
The Federal Housing Finance Agency wants to know how Fannie Mae, Freddie Mac and the Federal Home Loan Banks can better help borrowers with limited English proficiency (LEP) throughout the entire mortgage cycle, from lending to servicing. With the numbers of individuals not able to speak English fluently growing in the U.S., the FHFA wants to learn more about some of the procedures and tools that originators, servicers, and other parties in the mortgage lending process currently use to help LEP borrowers. To better understand the challenges, the FHFA issued...
The GSE patch expires either in January 2021, seven years after the effective date of the ATR rule, or when the GSEs are taken out of conservatorship, whichever comes first…
The banking industry again boosted its holdings of single-family MBS during the first quarter of 2017, although results varied significantly among various major players in the market. Banks and thrifts reported $1.762 trillion in held-to-maturity and available-for-sale MBS as of the end of March, a 1.5 percent increase from the previous quarter, according to a new Inside MBS & ABS ranking and analysis of bank call reports. With Federal Reserve MBS purchases in a holding pattern, banks and other investors are in a better position to increase their holdings as the supply of agency MBS slowly grows. The industry held...[Includes two data tables]
Fannie Mae and Freddie Mac both announced new re-performing loan sale transactions this month as the two government-sponsored enterprises look for ways to shed illiquid assets. Fannie began marketing its first re-performing loan sale back in November to help reduce its balance sheet. The program continues to gain more traction with each sale. That first sale totaled $789.2 million in unpaid principal balance. Fannie has since announced...
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