The GSEs simplified their low downpayment mortgage programs and announced updates in their selling guides late last week. The formula to determine a borrower’s eligibility by income limits is the first change aimed at making the application process for Fannie’s HomeReady program easier. “We are simplifying the way that income limits are applied by establishing a single area median income limit of 100 percent,” said Fannie. This is a change from the previous limit, in which the total annual qualifying income could not exceed 80 percent or 100 percent of the area median income, depending on where the home was located.
Freddie Prices $950 Million Multifamily K-Deal. Freddie Mac recently priced a new offering of Structured Pass-Through Certificates (K Certificates), which are backed by underlying collateral consisting of fixed-rate multifamily mortgages with predominantly seven-year terms. The GSE expects to issue nearly $950 million in K-722 Certificates. Borrower Alleges Unfair Post-Bankruptcy Inquiry. A borrower recently filed a lawsuit seeking class-action status against Fannie Mae related to an inquiry made into his credit file after his bankruptcy process was completed. Some attorneys said the case hints at a new type of lawsuit on the horizon stemming from the Fair Credit Reporting Act. The former borrower alleges that the GSE made unauthorized inquiries into his...
Fannie Mae and Freddie Mac saw significant increases in the flow of both refinance loans and purchase-money mortgages during the second quarter of 2016, according to a new ranking and analysis by Inside Mortgage Finance. And for the first time in a long while, nonbank mortgage companies delivered over half of the single-family mortgages securitized by the two government-sponsored enterprises. Fannie and Freddie securitized...[Includes three data tables]
Over the past year, mortgage lenders have been clamoring for pricing breaks from the government-sponsored enterprises as well as the FHA, but so far nothing has changed. But is the industry’s luck about to turn? A handful of GSE watchers interviewed by Inside Mortgage Finance believe there’s a greater likelihood of a cut in FHA premiums before the fall election as opposed to the Federal Housing Finance Agency doing something about loan-level price adjustments or guaranty fees. In general, it’s...
The Federal Housing Finance Agency is looking for ways to expand the credit-risk transfer programs at Fannie Mae and Freddie Mac but showing little interest in a proposal being pushed by the Mortgage Bankers Association and private mortgage insurers. The regulator of the two government-sponsored enterprises recently issued a request for comment on front-end risk sharing without directly discussing the concept of sellers getting reduced guaranty fees for loans that have more than the required level of private MI coverage. It did, however, cite counterparty risk as one of the key issues in credit-risk transfers. As of Dec. 31, 2015, the GSEs had transferred...
Mortgage lenders may get greater clarity on the legal question of just who may sue them for alleged racial discrimination, after the Supreme Court of the United States announced recently it would take on separate lawsuits filed by the city of Miami against Bank of America and Wells Fargo. The city accused the pair of perpetrating discriminatory mortgage lending within its jurisdiction over a long period of time. The city alleged that the banks’ conduct violated the Fair Housing Act in that they intentionally discriminated against minority borrowers and that their conduct had a disparate impact, resulting in an unbalanced number of foreclosures on minority-owned properties. The precise legal issue before the high court is...
New issuance of U.S. residential MBS and non-mortgage ABS revved up significantly in the second quarter, a new Inside MBS & ABS analysis reveals. Based on the best available data, a total of $400.72 billion of new MBS and ABS were issued during the three-month period that ended June 30. That figure could edge slightly higher as more information about end-of-month activity becomes available. Second-quarter MBS and ABS issuance was...[Includes one data table]
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