Freddie CEO Don Layton warns that staffers “at all levels” would flee the secondary market giant amid the five-year transition period, citing several provisions of the bill that are detrimental to employees.
Based on what Freddie's Layton said, one might think that going forward, the GSEs might barely break even. Maybe that’s why the GSEs – and not necessarily Mel Watt – want to hike their guaranty fees…
Fannie Mae and Freddie Mac securitized just $11.1 billion of refinance mortgages with high loan-to-value ratios during the first quarter of 2014, a sign that the Home Affordable Refinance Program is slowing down significantly. The first-quarter high-LTV refi market was down 37.1 percent from the fourth quarter of 2013 and off a hefty 78.5 percent from the $51.4 billion of business the two government-sponsored enterprises did back in the first three months of last year, according to a new Inside MBS & ABS analysis. Production was...[Includes one data chart]
The first-quarter high-LTV refi market was down 37.1 percent from the fourth quarter and off a hefty 79 percent from the $51.4 billion of business the two GSEs did back in the first three months of last year.
There’s a growing concern among participants in the secondary market that legislation in the Senate to reform the government-sponsored enterprises won’t be able to allow the to-be-announced market to function. The latest anxieties were raised by officials at Fannie Mae and Freddie Mac, whose securities flourish in the TBA market. Legislation in the Senate from Sens. Tim Johnson, D-SD, and Mike Crapo, R-ID, calls for the preservation of the TBA market but doesn’t provide any roadmap for how the proposed Federal Mortgage Insurance Corp. should accomplish that feat. “Unless the FMIC sets...
The housing finance reform legislation authored by Sens. Tim Johnson, D-SD, and Mike Crapo, R-ID, will result in higher guaranty fees and less cross-subsidization than the current Fannie Mae and Freddie Mac fee structure, according to the government-sponsored enterprises. The Johnson-Crapo bill, which was abruptly pulled from a scheduled markup before the Senate Banking, Housing and Urban Affairs Committee this week, would establish a new type of MBS with an explicit government backstop that requires private capital to absorb the first 10 percent of losses. “There is...
Johnson-Crapo requires 12 percent mortgage insurance if the LTV exceeds 80 percent but is no more than 85 percent; 25 percent MI if the LTV exceeds 85 percent but no more than 90 percent; and 30 percent MI if the LTV exceeds 90 percent.
Several big banks are in various phases of negotiation with the federal government to resolve alleged violations of federal and state securities laws in connection with legacy non-agency MBS. Bank of America is in new settlement talks with the Department of Justice over residential MBS backed mostly by faulty loans stemming from BofA’s acquisition of Countrywide Financial Corp. and Merrill Lynch & Co., which securitized the loans and sold the bonds to investors. The tentative talks could cost...
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