Freddie Mac CEO Donald Layton said in a phone interview with Inside The GSEs last week that the phrase “front-end risk sharing” is not well understood. He said almost all of the credit-risk transfer transactions can be referred to as front end because the terms are front end. “The risk-transfer mechanism is back end, the risk-transfer arrangement is front end,” he said. “If the loan comes to us and is put in one of our mortgage-backed securities, it is in fact a back-end risk transfer,” he said, explaining that if the loan goes bad the owner of the MBS takes the loss and looks to...

Marketplace lender Social Finance this month received seller/servicer approvals from Fannie Mae, but it remains to be seen just how active it will be in the secondary mortgage market. According to a spokesman for the privately held “SoFi,” the nonbank is now funding roughly $100 million per month in non-agency jumbos. According to firms that have done business with SoFi, it has sold the loans to OneWest Bank and Wells Fargo. To date, the online lender has yet to issue any ...

The MBS holdings of 16 top mortgage REITs were down 0.3 percent from the fourth quarter...

One observer noted: “Talk about a government takeover! This feels third-world to me…”

The GSEs are preparing big updates to their loan origination tools and one of the most noticeable changes will be Fannie Mae’s use of trended credit data to help more consumers qualify for a mortgage. Fannie will be rolling out Desktop Underwriter 10.0 during the weekend of June 25. Trended credit data relies on expanded information on borrowers’ credit history that shows the balance, minimum payment due and amount that is generally paid to determine if the consumer regularly pays off debt or carries a revolving balance. By using trended credit data in the risk assessment, Fannie said it allows for a more thorough analysis of the borrower’s credit history and is a “powerful predictor” of risk.

While many applaud the Flood Insurance Market Parity and Modernization Act that passed the House unanimously late last month, one mortgage group says the bill could cause problems for Fannie Mae and Freddie Mac. Currently, homeowners can only get coverage from the National Flood Insurance Program. The bill, H.R. 2901, expands flood insurance options by including private flood insurance, and requires the GSEs to accept any private flood insurance company a borrower chooses, as long as the company is financially sound. It also lifts certain federal restrictions placed on insurance companies and gives states more flexibility to license and regulate private flood insurance. Rep. Dennis Ross, R-FL, who co-sponsored H.R. 2901 with Rep. Patrick Murphy, D-FL, said the...

Although the GSEs are reviewing loans to make sure the new TRID forms are being used, not for technical compliance, Fannie Mae’s survey of lenders on the impact of TRID showed vendor coordination and communication with key players have been the biggest challenges.More than three quarters of the lenders surveyed cited challenges when it comes to managing and coordinating third-party technology vendors and communication with buyers, sellers and loan officers. In addition, smaller lenders said they feel more burdened since the rule took effect in October. Fannie said many small- to-midsized lenders indicated that they don’t have the same resources as larger institutions which can easily invest in upgrading systems and have in-house compliance resources to...

In almost 19 months, the capital cushions at Fannie Mae and Freddie Mac will fall to zero, which means if either government-sponsored enterprise (or both) suffers a net loss in a quarter, Uncle Sam will need to step in and supply cash to get the afflicted party back to zero. Depending on whom you talk to in the mortgage industry, a capital draw from Treasury could set off irrational behavior on the part of Congress or it’s much ado about nothing. …

Freddie Mac reduced its portfolio to $339.9 billion at the end of the quarter, a 2.0 percent drop. Like Fannie, the biggest decline in percentage terms was in non-agency MBS…

Investor Unite’s Tim Pagliara said that a stay would prejudice him under Virginia law, where the case is to be “expedited” and could be resolved on the merits…