Mortgage financing as it exists today might have to go through significant changes if the impact of climate change worsens, particularly in areas most exposed to the risk, according to new research from Freddie Mac. While flood insurance makes it possible for borrowers to obtain home loans in areas of high flood risk, other fallout from climate change – rising sea levels, changing weather patterns, increasing temperatures – may not be insurable. “As a result, some important features ...

This week, Fannie Mae announced it will start to securitize re-performing loans held on its balance sheet during the second half of the year. Loans that have been modified and are now performing and loans that have become current without a modification program will be included. Securitizing the once delinquent loans will help manage Fannie’s risk while dwindling down its portfolio, according to Fannie’s Bob Ives, vice president of retained portfolio asset management. “Over the long run, these securitizations can benefit investors, Fannie Mae and taxpayers.” Just weeks earlier the Federal Housing Finance Agency revealed a principal reduction program for Fannie and Freddie Mac loans.

Capital matters, according to Fannie Mae CEO Timothy Mayoupolos, who reflected on lessons learned during the crisis. In a recent speech in Washington, he noted that while Fannie was meeting its statutory capital requirements heading into the crisis, it was clearly not enough to weather the storm. “We are a mono-line company. We are restricted in diversifying our business,” he said. “So any broad disruption in housing was going to affect us. And it did,” he said, recounting the growing number of default borrowers during that time. Although he stopped short of commenting on what amount the GSEs should be recapitalized at, he did say that there is not enough capital today.

There were just two comments regarding the Federal Housing Finance Agency’s American Survey of Mortgage Borrowers and both were generally supportive but suggested ways to enhance the survey’s usefulness. The FHFA issued a request for comment last month about the proposed survey to collect information from borrowers. The information will be used in a report highlighting the GSEs’ mortgage activities. The comment period closed this week. The National Association of Home Builders said the practical utility of information collected by the ASMB is clear and will allow for a more in-depth analysis of the mortgage market. While some argue that the information collected is duplicative of other available data, the...

Freddie Sets Date for First Quarter Results. Freddie Mac announced that it plans to report its first quarter 2016 financial results before the U.S. financial markets open on Tuesday, May 3, 2016. Fannie Completes 10th CIRT Transaction to Date. Fannie Mae completed its latest Credit Insurance Risk Transfer transaction last week and it’s 10th deal since the program’s inception in 2013. This deal, CIRT 2016-3, shifts a portion of the credit risk on a pool of single-family loans with an unpaid principal balance of approximately $5.7 billion to a single insurer. The covered loan pool consists of 30-year fixed- rate loans with...

Quicken Loans, for example, reported a 4.9 percent increase in total originations compared to 4Q15. An estimated 81.0 percent of the nonbank’s production in 2015 was refinance loans…

Mortgage lenders that have excelled at originating refinance loans posted steady and improving originations during the first quarter of 2016 while competitors that are more focused on the purchase-mortgage market generally saw declining production levels. A new Inside Mortgage Finance analysis and ranking shows that first-lien mortgage originations totaled an estimated $380.0 billion during the first three months of 2016, down slightly from the fourth quarter of last year. That estimate could change as more information becomes available, especially from major nonbank lenders that have not yet reported first-quarter originations data. Agency indicators were...[Includes two data tables]

Having agreed to pay billions of dollars in damages for underwriting allegedly faulty FHA mortgages, the nation’s megabanks could be pondering a better idea: Creating a portfolio product that accomplishes the same task as a low-downpayment, government-backed loan. According to industry officials who claim to have knowledge of the situation, Wells Fargo and at least one other top-five ranked lender are working on such a concept, but it remains to be seen whether they will ever get there, and if they do, whether such a creation can amass any type of volume. When asked whether Wells was working on an FHA-like portfolio loan, a spokesman did not dismiss...

The New York State Supreme Court recently reversed a ruling in a foreclosure case, providing a favorable decision for lenders and servicers. New York Community Bank v. Daphne McClendon involved a foreclosure that was initiated in 2012. The mortgage in question was originated in 2008 by AmTrust Bank for $544,000. The note accompanying the mortgage was signed by electronic signature. The borrower challenged...

Underserved markets will suffer by not allowing Fannie Mae and Freddie Mac to retain capital, according to Rep. Mike Capuano, D-MA, who urged the Federal Housing Finance Agency and Treasury Department to re-examine the terms of their conservatorship. Under the current plan, the government-sponsored enterprises are not allowed to build capital and by January 2018 their reserves are expected to be wound down to zero. Capuano said...