Firms hoping that new guaranty fee and loan-level price adjustments promulgated by the Federal Housing Finance Agency might boost the jumbo MBS market were sorely disappointed when the final details were released by the agency late last week. One executive who works for a real estate investment trust that issues jumbos said it’s clear to him that Fannie Mae and Freddie Mac are continuing to “misprice” their g-fees. He would love...
The news that Fannie Mae and Freddie Mac won’t be changing their base guaranty fees and will no longer charge a 25 basis point “adverse market” fee hit late last week when the Federal Housing Finance Agency released its decision on the issue that many have speculated about for weeks.The adverse market fee was eliminated for all loans but loan-level pricing adjustments were raised for certain mortgages. The changes will become effective for all loans purchased by Fannie and Freddie beginning Sept. 1, 2015. The base guaranty fee announcement came as no surprise as most expected there wouldn’t be a change. “The FHFA finds no compelling economic reason to change the general level of fees,” the agency said.
The Federal Housing Finance Agency announced new changes to private mortgage insurer eligibility rules on April 17 and the GSEs said the revisions will play a role in helping to reduce the risk to taxpayers by making sure the MIs are financially and operationally strong. During the financial crisis, some MIs couldn’t fully pay their claims, resulting in losses to the GSEs and taxpayers. The FHFA hopes the revised requirements will help lessen the chances of falling back into the same boat should there be another crisis. United Guaranty, the highest-rated GSE-approved mortgage insurer, said PMIER revisions are “a critical and necessary step that will allow the entire mortgage insurance industry to move forward by incorporating lessons learned during the financial crisis.”
Freddie Mac, announced this week its first non-performing loan auction this week that primarily caters to smaller investors. The Extended Timeline Pool Offering of deeply delinquent NPLs gives investors who may need more time to secure funds for bidding a longer timeframe to do so. The loans for sale, all based in Miami-Dade County, FL, have an aggregate unpaid principal balance of $35 million.Having smaller pool sizes and a longer marketing timeframe differentiates the EXPO initiative from Freddie’s standard pool auctions. “This is intended to provide smaller investors extra time to secure funds to participate in Freddie Mac NPL auctions,” said the GSE. Qualified buyers have until June 2, 2015, to bid on the loans and the...
In an ongoing attempt to offer lenders more clarity and reduce buybacks, Fannie Mae has taken its new Collateral Underwriter program to the next phase and integrated it with other loan-processing systems.After introducing Collateral Underwriter in January, Fannie announced on April 20 that it incorporated the tool with Desktop Underwriter, an automated underwriting system, and Early Check, the company’s pre-delivery loan eligibility and data evaluation tool. The GSE said this will provide a better view of risk on a loan across multiple applications, allowing lenders to address potential issues prior to loan delivery. CU, Fannie’s proprietary appraisal analysis application that gives lenders access to analytics, public records and other data when...
Fannie Mae recently launched a new program to help first-time homebuyers purchase a home while alleviating any possible confusion surrounding the buying process. As part of the HomePath Ready Buyer Education Program, qualified buyers could receive up to three percent closing cost assistance once they complete an online education course. The class is an important component of the program, according to Fannie. “Purchasing your first home can be an overwhelming process,” said Fannie’s Jay Ryan, vice president of REO Sales. “We developed the HomePath Ready Buyer program to provide first-time homebuyers with the knowledge to make informed decisions as they navigate the complexities of the homebuying process.”
The GSEs have provided multifamily financing for more than two decades, but their dwindling role has some worried that it has adverse effects on the underserved and low-income segment of the multifamily market. Although the Federal Housing Finance Agency said it is working to slow the decline, an April brief by the Urban Institute pointed out that with the increasing demand and costs of renting, the agency may need to do more in maintaining or increasing the GSE role in multifamily. In the past 25 years, the dollar volume of GSE multifamily financing has grown from $4.5 billion in 1990 to more than $57 billion at the end of 2014. But recent declines show that Fannie’s and Freddie’s
Treasury Counselor Michael Stegman said despite the inability to recapitalize, Fannie Mae and Freddie Mac, as well as the housing market in general, are better off under the current conservatorship plan. He pointed to lower bowering costs as one of the advantages. The Preferred Stock Purchase Agreement, in which the Treasury gets the bulk of the GSEs profits, has been a source of frustration for some. However, Stegman, speaking at a Financial Services Roundtable event in Washington last week, said he wanted to “correct the record.” “The dividends that Treasury receives are not a repayment for the capital support and backstop that Treasury has provided,” he said. “The fact is that the PSPAs provide tremendous value to the GSEs. Market participants continue to have confidence...
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