Fannie Mae and Freddie Mac are watching with some concern the growing role of nonbank servicers, and their regulator is drafting new standards for these counterparties. “The shift from depository to non-depository servicers poses additional risks to us,” Fannie said in its third-quarter 10-Q filing. “Non-depository servicers may have a greater reliance on third-party sources of liquidity and may, in the event of significant increases in delinquent loan volumes, have less financial capacity to advance funds on our behalf or satisfy repurchase requests or compensatory fee obligations.” The fast growth of many of these nonbank servicers poses “increased operational risk, which could negatively impact their ability to effectively manage their servicing portfolios,” Fannie said. Nonbank servicers – especially “specialty” companies – are ...
SEL 2014-15. Dec. 8. Fannie announced expanded loan-to-value ratios for purchase and limited cash-out refinances. The GSE also updated its loan-level price adjustment matrix. The program requires use of Fannie’s Desktop Underwriter version 9.2, which will be implemented over the Dec. 13 weekend. It is available for both MyCommunityMortgage and standard business. For MCM, Fannie now allows borrower reserves to come from gifts. Bulletin 2014-22. Dec. 8. Freddie introduced the Home Possible Advantage product, which allows loan-to-value ratios up to 97 percent under the Home Possible program.The loans can be manually underwritten or processed through Freddie’s Loan Prospector. At least one borrower must get homeownership counseling. The program effective date is March 23, 2015. DU Spring 2015 Update. Dec. 5. ...
The key factor is that some mortgage originators, the megabanks especially, are keeping conventional loans in portfolio that might otherwise be securitized by Fannie and Freddie.
Rep. Ed Royce of California: "Money coming in from the GSEs should go to the taxpayers instead of a slush fund for ideological housing groups to play around with.”
Jumbo mortgage lending and securitization remained one of the bright spots in the home-loan business during the third quarter of 2014, according to a new Inside Mortgage Finance analysis. A total of $81.8 billion in mortgages exceeding the traditional $417,000 conforming loan limit were produced during the third quarter, up 15.4 percent from the second quarter of 2014. Total mortgage originations were up 11.3 percent over the same period. Total jumbo activity included...[Includes three data charts]
Quicken Loans, the nation’s largest nonbank lender, recently offered a lender-paid mortgage insurance “sale” through loan brokers, committing $100 million to the effort and wrapping up the promotion in roughly 60 hours. According to Tod Highfield, vice president of loan production at Quicken, the sale wasn’t designed to hit any volume targets per se, but was meant to heighten the firm’s profile among certain segments of the origination market, namely brokers, credit unions and community banks. The offer was pitched...
Fannie Mae and Freddie Mac this week officially announced 97 percent loan-to-value ratio programs to a mixed industry response. Fannie’s low-downpayment option will be available through its MyCommunityMortgage program, as well as for refinances and other non-MCM mortgages. Freddie will offer its 3 percent downpayment product as a purchase or no-cash-out refinance in its Home Possible Advantage program. The biggest difference between the two is...
Democrats in Congress and consumer advocates remain concerned about tight underwriting standards for mortgages, particularly due to overlays established by lenders. However, at a hearing this week by a subcommittee of the Senate Committee on Banking, Housing and Urban Affairs, there was a lack of consensus on what causes underwriting overlays. “Instead of matching the creditworthy borrower at the lower end of the distribution with affordable loans, these borrowers are being cut out of the market entirely,” said Sen. Robert Menendez, D-NJ, chairman of the Banking Subcommittee on Housing, Transportation and Community Development. Sen. Elizabeth Warren, D-MA, suggested...
The migration of mortgage servicing rights from “more tightly to less tightly regulated parts of the financial system” should be addressed by regulators, according to the Treasury Department’s Office of Financial Research. The OFR, which was created by the Dodd-Frank Act to serve the Financial Stability Oversight Council, said Basel capital requirements have created incentives for banks to sell MSRs to nonbanks. In its annual report, the OFR cautioned that nonbanks aren’t as well regulated as banks. “Mortgage servicing activity and the accompanying risks appear...
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