Commercial banks and savings institutions continued to load up on residential MBS during the second quarter of 2016, pushing their investment in the sector to a new high, according to a new analysis and ranking by Inside MBS & ABS. Banks and thrifts reported MBS holdings of $1.684 trillion as of the end of June, a 1.4 percent increase since the previous quarter. These are long-term holdings in banks’ held-to-maturity and available-for-sale portfolios. The industry held another $46.02 billion of MBS in their trading accounts. Not surprisingly, all of the gain came in agency MBS, particularly pass-through securities issued by Fannie Mae and Freddie Mac. The industry’s aggregate holdings of these securities, $867.64 billion, were up 4.1 percent from the ...
The average daily trading volume in agency MBS totaled $219.3 billion in July, the best reading in 18 months, according to the Securities Industry and Financial Markets Association. However, the sequential improvement was a mere 3.30 percent. Then again, any gain is better than none. For all of 2016, the worst reading came in March at $189.4 billion. The strong showing (relatively speaking) comes as the primary market has produced a better-than-expected $890 billion for the first six months of 2016. Some industry executives believe loan originations could top $2 trillion this year, which would increase the supply of outstanding MBS. For the past few years there has been a debate in the industry about the significance of lower trading ...
While the homeownership rate for people 25 to 34 years old remains well below the levels seen for that age group before the financial crisis, analysts at Fannie Mae note that the homeownership rate for millennials is starting to increase. Fannie defined millennials as those born between 1981 and 2000. Patrick Simmons, director of strategic planning in Fannie’s economic and strategic research group, turned to the Census Bureau’s American Community Survey to ...
Fannie Mae has re-claimed some lost market share in the prized first-time homebuyer market during the first half of 2016, according to a new Inside The GSEs analysis and ranking. Fannie securitized $41.70 billion of first-time buyer purchase loans in the first six months of this year. That represented 28.4 percent of the total FTHB business securitized by the three agencies, up from 27.8 percent for all of last year. Freddie Mac, however, is still playing catch-up. The GSE accounted for 17.0 percent of the agency FTHB market, compared to 17.8 percent in 2015. The top securitizer of first-timer loans remained Ginnie Mae, with a 54.6 percent share of the sector.
Freddie Mac recently formed a Manufactured Housing Initiative Task Force as the result of manufactured housing advocates pushing for greater support from the GSEs, especially in the form of chattel lending. The group met for the first time in late July in Reston, VA. The meeting came after a comment letter from the Manufactured Housing Institute on the Federal Housing Finance Agency’s duty-to-serve rule, which was followed by an invitation from MHI to discuss chattel loans at an MHI meeting in May. In December, the FHFA issued a proposed rule to implement the “duty-to-serve” provisions included in the Housing and Economic Recovery Act of 2008.
Although the Federal Housing Finance Agency’s recent stress test results showing that the GSEs could need up to $125 billion in a severe economic crisis, quarterly earnings continue to show a profitability that cancels out the need for a bailout. Required annually by the Dodd-Frank Act, the test of severely adverse scenario is based on Fannie Mae and Freddie Mac portfolios as of Dec. 31, 2015. …
A personal relationship between Fannie Mae CEO Tim Mayopoulos and Heather Russell, the chief legal officer for Fifth Third Bancorp, caused the bank to terminate its top lawyer because of conflict of interest concerns. Both Mayopoulos and Russell are separated from their spouses, and both revealed the relationship to their respective companies. “Mr. Mayopoulos previously disclosed the relationship to Fannie Mae’s Office of Compliance and Ethics. The Office of Compliance and Ethics provided appropriate direction to Mr. Mayopoulos, and he followed it,” according to a spokesman for Fannie. “Further, Mr. Mayopoulos has no involvement in Fannie Mae’s relationship with Fifth Third Bank. Quite simply, there is no conflict of interest under Fannie Mae’s corporate policies,” said the spokesman.
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