A relatively small – even microscopic – percentage of loans securitized by Fannie Mae and Freddie Mac in the past three years have been subject to a repurchase demand, according to a new Inside Mortgage Trends analysis.
Fannie Mae and Freddie Mac have made progress in improving their corporate governance structure and managing credit risk, but they still face significant headwinds, according to the FHFA’s annual report to Congress.
Fannie Mae is looking to reduce its footprint in the Dallas region as the number of mortgage delinquencies continues to decline. The GSE’s southwestern regional office at the International Plaza II includes more than 400,000 square feet of office space spread out among three buildings.
Fannie Mae and Freddie Mac both reported sharp declines in mortgage repurchases during the first quarter of 2015, according to a new Inside The GSEs analysis of public disclosures by the two. There was, however, a sharp increase in the volume of unresolved buyback demands. The GSEs reported a combined $491.3 million in mortgage repurchases during the first three months of 2015, a 30.8 percent decline from the fourth quarter of last year. It was also the lowest quarterly buyback figure since Fannie and Freddie began filing repurchase activity reports with the Securities and Exchange Commission back in early 2012. Fannie’s repurchase volume fell 45.8 percent from the previous quarter while Freddie’s was...
Freddie Mac announced its first non-performing loan auction that primarily caters to smaller investors was sold last week to Corona Asset Management XII, LLC. Freddie marketed the Extended Timeline Pool Offering of 157 deeply delinquent NPLs in April and it sold on June 3.The EXPO gives smaller investors who may need more time to secure funds for bidding a longer timeframe to do so.Having smaller pool sizes and a longer marketing timeframe differentiates the EXPO initiative from Freddie’s standard pool auctions. The loans were all based in Miami-Dade County, FL, and have an aggregate unpaid principal balance of $31 million. Freddie said the loans had been delinquent for close to four years on average.
Credit quality has improved over the last two years, according to Chris Mock, vice president of single-family quality control for Freddie Mac, but there is still plenty of room for improvement. These days he said the top three common defects are missing documentation, insufficient funds to close, and insufficient income. “The first one is we are unable to calculate income and match it to the income the lender calculated on the loan file,” he said in an interview with Inside The GSEs. “And that one is mainly driven by documentation that is missing when the customer sends us a file.” Mock said that Freddie shares a list of the top 10 missing documents with lenders...
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