The average daily trading volume for agency MBS fell to a yearly low of $149.2 billion in December, as trading desks from coast to coast continued to assess how to make money in what’s become a business of tight profit margins. Late this week, Barclays Bank unveiled a massive restructuring of its MBS and whole-loan trading business, cutting the number of employees in the division – including traders – down to 50 from roughly 100. As a structural matter, the bank is moving...
MBS backed by multifamily mortgage loans would be exempt from a proposed rule that would establish margining requirements for multifamily agency finance. Had it been implemented as originally proposed, the rule would have amended the Financial Industry Regulatory Authority’s Rule 4210 to establish margin requirements in the single-family “to-be-announced” (TBA) market. At the same time, it would have also scoped in the multifamily housing programs of Fannie Mae and FHA/Ginnie Mae, according to the Mortgage Bankers Association. FINRA filed...
Redwood Trust, which a few years back branched out into buying GSE loans, announced this week that it was throwing in the towel on that business, cutting 25 percent of its workforce in the process.Although it will no longer buy Fannie Mae and Freddie Mac mortgages from correspondent originators, it will remain a buyer of jumbo product. As one source close to the company noted: Redwood “just couldn’t make the math work” in that line of business. At Sept. 30, the publicly traded real estate investment trust employed 221 full-time workers. The layoff will claim roughly 54 jobs, most of them in Denver where its GSE acquisition initiative was based.
Trade groups concerned about privacy violations in the proposed collection of data in the National Survey of Existing Mortgage Borrowers voiced their concerns to the Federal Housing Finance Agency last week. The FHFA has been seeking comments on the proposed voluntary survey of borrowers who have a first mortgage loan secured by a single-family home. Everything from the borrower’s name and address to financial records, mortgage and credit card information and race and household composition will be addressed in the approximately 80-question survey. While the 10 trade groups, including the American Bankers Association, Housing Policy Council, Independent Bankers of America and Mortgage Bankers Association, agree with...
Fannie Mae and Freddie Mac have implemented a new appraisal sharing feature in the Uniform Collateral Data Portal to help correspondent lenders. When it launches Feb. 7, correspondent lenders will be able to share appraisal information with their aggregators within the portal so they can get real-time results for their correspondents’ appraisals. The GSEs said this ensures that they will have the most up-to-date appraisal information when selling a loan to aggregators.The correspondent will be able to share individual appraisals with specific aggregators and delve into more details when they retrieve the appraisal. The aggregator can access the status, funding and submission summary report for the correspondent-shared appraisals.
After the Federal Housing Finance Agency filed a motion in November to dismiss a case introduced by two GSE shareholders over the summer, the shareholders have opposed the motion to dismiss and are demanding a jury trial. The original complaint stated that with Fannie chartered under Delaware law and Freddie under Virginia’s jurisdiction, the preferred stock of a corporation cannot be given a cumulative dividend right equal to all the net worth of the corporation “in perpetuity.” In a nutshell, shareholders David Jacobs and Gary Hindes argue that the net worth sweep in which Treasury takes the bulk of the GSEs’ profits is illegal under state law.
Democrats and Republicans in Congress want to know what it will take to expand real estate investment trust participation in GSE credit risk transfers. They wrote the Securities and Exchange Commission last week asking it to help alleviate the regulatory challenges REITs face when it comes to participating in credit risk transfers. “Specifically, we are requesting your expertise in unlocking a meaningful amount of capital in the form of mortgage real estate investment trusts to participate in these transactions,” said the letter from the 13 congressman.They cited the FHFA’s goal to grow the credit risk-sharing program with an expanded investor base and said that mortgage REITs would be a likely candidate if the obstacles were removed.
Fannie Mae and Freddie Mac have been targeting a portion of their nonperforming loans to nonprofit organizations, but reaching those groups can be a challenge. So far, each has sold one pool to two different nonprofit groups in New Jersey. Freddie Mac announced its very first NPL sale to a nonprofit buyer back in late December. It sold $18.4 million in loans to the Community Loan Fund of New Jersey, a non-profit, private and minority and women-owned business. There were 103 loans in the Florida-based pool with an average balance of $178,300 and they were about 33 months delinquent on average. The transaction is expected to settle in February.
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