Fannie Mae and Freddie Mac rolled into their eighth year of government conservatorship pushing forward the two major reforms they can accomplish under their existing charters: selling off a significant portion of the credit risk on their current business and building a new MBS platform. Top officials from the two government-sponsored enterprises urged the industry to be patient about the launch of the common securitization platform and, a little further down the road, the single security for GSE to-be-announced MBS. “It will happen...
A number of factors are making new MBS in the to-be-announced market less attractive to investors than MBS issued a few years ago, according to a report from Deutsche Bank Securities. “Aggressive servicers keep picking up market share, credit quality keeps softening and loan balances edge up,” the analysts said. “It adds up to declining quality for TBA MBS.” While those trends certainly aren’t new, Deutsche Bank said...
The trade group for private mortgage insurers this week said Fannie Mae and Freddie Mac programs that would allow sellers to obtain deeper MI coverage, up to 50 percent of the home’s value, could help lower guaranty fees charged by the two government-sponsored enterprises. U.S. Mortgage Insurers said greater front-end risk sharing almost doubles the amount of loss protection to the GSEs and allows them to reduce their committed capital for this risk by about 75 percent. As a result, the group noted...
Government-sponsored enterprises Fannie Mae and Freddie Mac will likely exceed their regulator-mandated cap on multifamily support in the aggregate, with Fannie already topping its cap and Freddie lagging a bit in comparison. Fannie already has exceeded its scorecard cap for 2015, with three months of the year yet to go. For the first three months of 2015, Fannie issued $32.2 billion in multifamily MBS, according to figures compiled by Inside MBS & ABS. In the third quarter, Fannie issued...
Although some lenders love having a desk in a high-volume Realtor’s office, others loathe the practice. “I lost so much business to those places over the years,” he said. “I refused to pay $5,000 for a desk…”
Fannie Mae said that next year lenders would be able to verify a borrower’s income electronically and find ways to lend to customers with nontraditional credit histories. Fannie announced during the Mortgage Bankers Association convention this week changes to extend credit access to potential borrowers who typically have trouble finding a mortgage. Among those changes announced this week and set to take place in 2016, the GSE will require lenders to use trended credit data when underwriting single-family borrowers through its Desktop Underwriter program. The data, provided by Equifax and Transunion, will allow a more detailed analysis of the borrower’s credit history, according to Fannie. Currently, reports only indicate the outstanding balances and if a borrower has been...
Mel Watt, director of the Federal Housing Finance Agency, dished on several GSE-related issues, including the common securitization platform and expanding access to credit, at the Mortgage Bankers Association conference in San Diego this week. After announcing last month that the CSP and single security will be launched in two stages, with no confirmation of an exact timeline yet, Watt said, “We realize that there is a degree of impatience and a desire to see all these efforts completed right away. While not in a position to give you specific dates right now, I can confirm that we plan to announce the Release 1 timeline in 2016.” He added that the FHFA also hopes to be able to announce the...
It’s been an active week of GSE announcements with new initiatives, partnerships and increased competition between the duo. This appears to be an acknowledgment that GSE reform is not anywhere in the short-term plan and Freddie Mac, along with Fannie Mae, are taking matters into their own hands to help right the market. Freddie unveiled a partnership with Quicken Loans to modify some of the underwriting guidelines on its low-downpayment mortgage program, Home Possible. While not many details were available, Brad German, Freddie’s spokesman, said, “We're at the start of a work in progress to jointly develop products specifically aimed at the housing needs of millennials, first-time buyers, the middle class and other eligible borrowers.”
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