Mortgages that allow buyers to make low downpayments are making a quiet comeback, according to a recent analysis from Deutsche Bank. But do they have the staying power? So far, seven lenders have partnered with Fannie Mae and Freddie Mac in special programs to offer loans requiring anywhere from no money down to 3 percent down. Although the government-sponsored enterprises cap their high loan-to-value product at 97 percent, some lenders step in and subsidize the extra funds needed to make up the difference. The GSEs began...
Large depository institutions continued to let their servicing portfolios of loans pooled in Fannie Mae and Freddie Mac mortgage-backed securities slowly decline in the second quarter of 2016. A new Inside The GSEs analysis shows that banks, thrifts and credit unions still accounted for the lion’s share of GSE MBS servicing at the end of June. Depositories serviced $2.778 trillion of Fannie and Freddie single-family loans tied to MBS, or 66.6 percent of the total market. But that was down 0.9 percent from the previous quarter during a period when the total servicing of GSE single-family MBS edged slightly higher. Nonbanks, however, .... [includes two charts]
This week, the Republicans adopted their official platform and called the GSE conservatorship a “corrupt” way of doing business. The GOP said the Great Recession devastated the housing market and caused taxpayers to pay billions of dollars to rescue Fannie Mae and Freddie Mac. They blame Democrats in Congress and the Obama administration for preventing efforts to reform the GSEs since they’ve been in conservatorship. “Their corrupt business model lets shareholders and executives reap huge profits while the taxpayers cover all loses,” the platform said. While vague in taking a stance on what should be done with Fannie and Freddie, the platform simply stated that the utility of both agencies should be “reconsidered.”
The Federal Housing Finance Agency remains resistant to taking on Property-Assessed Clean Energy loans despite this week’s announcement that the FHA will allow PACE loans.PACE programs provide financing for home energy improvements and water conservation, repaid through an assessment added to the property’s tax bill. FHA’s new guidance addresses state programs where the PACE obligation is treated like a property tax with priority over an FHA mortgage lien.However, like other mortgage industry critics of PACE loans, FHFA Director Mel Watt, said he continues to have “serious concerns” with how PACE programs are financed.
Trade groups and a long list of Congressmen are crying foul and urging the Federal Housing Finance Agency to not include a question asking borrowers’ language preference on its new Uniform Residential Loan Application. The FHFA, along with Fannie Mae and Freddie Mac, are considering adding the question as a last- minute addition to the URLA. However, in June, nine trade groups, including the American Bankers Association, Consumer Mortgage Coalition and Mortgage Bankers Association, wrote FHFA Director Mel Watt to voice their concerns, many of which focused on compliance and discrimination issues. They argued that a language preference question requires lenders to ask borrowers sensitive questions before...
Last week, the Federal Housing Finance Agency released a map highlighting eligible borrower locations for its principal-reduction program and instructed servicers to begin soliciting borrowers. The interactive map highlights where the most eligible borrowers are located for its new principal reduction option for loan modifications. The number of borrowers eligible to take advantage of the program has declined some. When it was announced in April, the FHFA estimated that 33,622 borrowers would be eligible, but it has since lowered that estimate to 30,000. The FHFA attributes the reduction to a “continuously evolving housing market” that may have improved in some areas.
A growing number of lenders are partnering with Fannie Mae and Freddie Mac to offer low downpayment products requiring as little as 1 to 3 percent down. Many were announced without much fanfare and this has created a quiet comeback of sorts, according to Deutsche Bank.So far, seven lenders, including three large traditional banks, have introduced programs this year. Although the GSEs cap their high loan-to-value products at 97 percent, some lenders step in and subsidize the extra funds needed to make up the difference to help cash-strapped borrowers.The GSEs began offering their 97 percent LTV programs in late 2014 after they phased it out several years earlier.
Most voters are not happy with housing and mortgage access and favor more government intervention, according to a national housing poll of 1000 likely voters released last week by Investors Unite. More than half of those familiar with Fannie Mae Freddie Mac, 55 percent, had a favorable view of the mortgage giants. The survey was done in late June by Douglas Schoen, founder of Schoen Consulting,a pollster and democratic campaign consultant. It included views on homeownership, housing policies and the GSEs. He said the desire for policy change is “widespread and urgent.”
The Federal Housing Finance Agency is seeking to prevent GSE shareholder and director of Investors Unite, Tim Pagliara, from inspecting the corporate records of Fannie Mae and Freddie Mac.Pagliara filed a lawsuit in state courts in March hoping to gain access, as an individual stockholder, to the GSEs’ records to determine the circumstances surrounding the sweep. Fannie, incorporated in Delaware, and Freddie, incorporated in Virginia, both denied his request to review the records earlier this year. Pagliara then argued that his rights as a shareholder were denied for “no legitimate basis.” This week, the FHFA filed a motion to substitute itself for Pagliara and remove...
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