One of the government-sponsored enterprises appears likely to test a form of credit-risk transfer that mortgage bankers have been clamoring for: transactions that allow mortgage sellers to pay lower MBS guarantee fees on loans that have deeper mortgage insurance coverage than is required by the GSE charters. Robert Schaefer, vice president for credit enhancement strategy at Fannie Mae, said there is “a high probability that we will do an MI deal later this year that addresses the pain points” the GSE sees in the deeper MI concept. “We are talking...[Includes one data table]

The Federal Reserve Bank of New York’s Open Market Trading Desk this week conducted the first of two small-value agency MBS sales operations, “for the purpose of testing operational readiness.” The second test is slated for June 1, 2016. The total current face value of sales across the two operations will be less than $150 million, according to the bank. The first transaction, which involved four Fannie Mae MBS currently valued at approximately $120 million, occurred in the middle of this week. The settlement date is June 13, 2016. Meanwhile, the June 1 operation will involve...

The share of new home mortgage originations packaged into MBS drifted slightly lower in the first quarter of 2016, a new Inside MBS & ABS analysis reveals. Some $255.7 billion of newly originated mortgages were pooled in MBS in the first three months of the year, representing a paltry 67.3 percent of the estimated $380 billion of first-lien originations in the primary market. For the purposes of calculating securitization rates, loans aged more than three months and modified loans are excluded from agency MBS issuance figures. Fannie Mae and Freddie Mac securitized...[Includes one data table]

Investors who are suing the government over the terms of the conservatorships of Fannie Mae and Freddie Mac said the 53 documents recently made public solidify their claim that the government-sponsored enterprises had plenty of capital and a government bailout was unnecessary. The Treasury Department provided the documents to plaintiffs last week as part of a court case in Kentucky. “The newly de-designated documents also suggest...

Wells Fargo reported an 11.7 percent increase in its conventional-conforming originations during the first quarter, but the company’s GSE loan sales fell 12.2 percent on a sequential basis – quite a differential.

The Texas portion of the receivables has been measured at 60.5 percent with Colorado a distant second at 13.6 percent.

Let's face it: most banks are just chicken to hold mortgages in portfolio unless they're jumbos...

California remained the top state for Fannie Mae and Freddie Mac activity in the first three months of 2016 with volume reaching $36.18 billion, three times as much as Texas, which trailed in second place with $12.43 billion in volume. However, GSE activity in California saw a 23.8 percent decline from the previous quarter while volume in Texas was up by 5.2 percent, according to a new Inside The GSEs analysis. In California, the average Fannie and Freddie loan was $307,302 in line with the state’s 2015 average of $310,185. That number followed only Hawaii, which had an average loan size of $362,236 and the District of Columbia, which was $336,268.

Bank of America escaped having to pay $1.2 billion in penalties when a federal appeals court dismissed the Federal Housing Finance Agency’s allegations of fraud this week. The appeal stemmed from a 2013 verdict stating that Countrywide Home Loans, a subsidiary of BofA, was liable for damages caused by selling bad loans to Fannie Mae and Freddie Mac during the financial crisis. Whether or not a breach of contract can also support a claim for fraud was the argument and primary factor in the judge’s decision. It seems that even if a loan seller is guilty of an intentional breach of contract, it’s not considered fraud.

Top single-family executives at Fannie Mae and Freddie Mac described new technology upgrades and the success of their credit-risk transfer programs during remarks at last week’s secondary market conference sponsored by the Mortgage Bankers Association. Andrew Bon Salle, executive vice-president for single-family business at Fannie, said the GSE is working to enhance the customer experience and make doing business with the company simpler and more certain. He said customers are reporting sharp gains in efficiency from Fannie’s collateral underwriting tool, and a new version of Desktop Underwriter will be rolled out next month. A key feature in version 10.0 of DU is the inclusion of trended credit data.