Just because a GSE uses a third-party vendor to assess the risk of seller/servicers as counter-parties that doesn’t mean the GSE – or their management – is off the hook if something goes awry.
All three mortgage-production channels generated solid increases in new origination volume during the third quarter of 2014, but the correspondent market had a measurably bigger gain, according to a new Inside Mortgage Finance ranking and analysis. An estimated $105 billion of home loans were produced by correspondent originators during the third quarter, up 14.1 percent from the previous quarter. That lifted the correspondent share of new originations to 30.4 percent for the quarter, and 30.3 percent on a year-to-date basis. Correspondents are...[Includes four data charts]
The Obama administration noted this week that it is less than keen on the idea of taking up an outgoing Democrat senator’s call to end the six-plus year conservatorships of Fannie Mae and Freddie Mac. Last week, Senate Banking, Housing and Urban Affairs Committee Chairman Tim Johnson, D-SD, suggested the GSEs’ conservatorship be ended if legislative reform is not forthcoming.
As the Federal Housing Finance Agency prepares a new guaranty fee framework to unveil in early 2015, a report issued by the FHFA last week noted that big g-fee increases in 2013 were not spread evenly across the market. According to the FHFA’s sixth annual study, average mortgage-backed security g-fees charged by Fannie Mae and Freddie Mac jumped from 36 basis points in 2012 to 51 bps last year.
The Federal Housing Finance Agency this week unveiled a policy alteration that would potentially allow a foreclosed homeowner to purchase a home – including one he/she lost due to arrears – from the real estate owned inventory of Fannie Mae or Freddie Mac. The change will permit Fannie and Freddie to sell existing REO properties to any qualified purchaser at the property’s fair-market value, as determined by the GSE, according to the FHFA.
Both Fannie Mae and Freddie Mac, at the direction of the Federal Housing Finance Agency, last week rolled out changes to their selling representation-and-warranty frameworks in an effort to reduce lenders’ concerns about when they might be asked to repurchase a loan. The GSEs noted that some lenders were concerned about repurchase risk and other market factors causing an increase in credit overlays, which has limited access to credit for potential creditworthy borrowers.
Fannie Mae and Freddie Mac guarantee fee pricing disparities were dramatically leveled out in 2013, according to data released by the Federal Housing Finance Agency. In 2010 and 2011, small lenders typically paid about 10 basis points more in g-fees to the government-sponsored enterprises than did the five largest lenders in the market, the report shows. In 2012, the disparity fell to about 6 bps. Last year, it was down to 2 bps. Small lenders – defined as those that ranked outside the top 100 GSE sellers – paid an average of 53 bps, while the top five sellers paid 51 bps. Three more lender groups based on size that fell between the two extremes paid average fees of 51 or 52 bps....
The majority of mortgage industry executives believe a proposal to raise Fannie Mae and Freddie Mac guaranty fees will hurt lenders, raise origination costs and lead to fewer loans being made, according to a survey by Genworth U.S. Mortgage Insurance. “The survey findings were in line with expectations and highlight the need for continued dialog on regulatory reform and credit access,” said Rohit Gupta, president/CEO of the company. An estimated 53 percent of executives believe raising the g-fees would result in fewer loans being closed. And 23 percent of executives said higher fees for the government-sponsored enterprises would increase demand for FHA loans. While 13 percent said an increase would limit industry competition, 11 percent said it would stoke competition. ...
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