Fannie Mae and Freddie Mac securitized just $29.95 billion of single-family mortgages with private mortgage-insurance coverage during the first quarter of 2014, a 30.9 percent decline from the previous period, according to a new Inside Mortgage Finance analysis and ranking. The steepness of the private MI downturn was in line with the 29.1 percent downturn in overall business at the two government-sponsored enterprises from the fourth quarter of 2013. And the flow of private MI loans in early 2014 was down 40.2 percent from the first quarter of last year, a less severe drop than the 63.7 swoon in the overall GSE market over that period. The biggest decline in MI-insured business was in underwater mortgages that were refinanced while keeping their existing coverage under the Home Affordable Refinance Program...[Includes two data charts]
Early indicators suggest that mortgage originations slumped by about 23 percent in the first quarter of 2014, a harbinger of tough times to come for companies that are running on fumes. According to a new Inside Mortgage Finance analysis of loan-level data in Fannie Mae and Freddie Mac first-quarter securitizations, primary market originations for the first three months of the year totaled about $235 billion. Unless the pace picks up, 2014 could fail to reach $1 trillion for the first time since 1998. Lender surveys, which are the major factor in Inside Mortgage Finance originations estimates, are underway. Weak origination volume is...
An array of advocacy groups – both well established and newly formed – have stepped up their lobbying efforts as the Senate Banking, Housing and Urban Affairs Committee moves toward a scheduled markup of increasingly controversial mortgage-finance reform legislation. A lot of the noise is coming from disenfranchised investors in Fannie Mae and Freddie Mac junior preferred stock and common stock who want to scuttle the bipartisan reform bill put together by Sens. Tim Johnson, D-SD, and Mike Crapo, R-ID. Their legislation is silent on the fate of public stockholders of the two government-sponsored enterprises, and it leaves intact the conservatorship arrangement that strips virtually all the capital from the two GSEs every quarter. In a press conference called by Investors Unite, a group of individual GSE shareholders, and consumer advocate Ralph Nader’s Shareholder Respect, CapWealth Advisor CEO Tim Pagliara predicted...
It will be difficult to tell whether the Dodd-Frank Act is driving waves of small lenders out of the mortgage market or whether a severe drought in new production is an equally weighty factor, but community lenders may be gaining some ground among policymakers. At a hearing in the House Financial Services Committee this week, Chairman Jeb Hensarling, R-TX, read at some length from a letter he received from a small mortgage banker in central Texas who said his firm is being forced out of the market because of the cost and complexity of regulatory compliance. The major culprit is the wave of mortgage regulations imposed by the Consumer Financial Protection Bureau under the Dodd-Frank Act. Hensarling did not reveal the company’s name. Rep. Shelley Moore Capito, R-WV, who chairs the Financial Institutions and Consumer Credit Subcommittee, reiterated...
The price of agency MBS has been rising since early April, which can only mean good things for publicly-traded real estate investment trusts that own the asset class. However, REIT share prices haven’t improved much of late, with some companies such as Annaly Capital Management continuing to trade closer to their 52-week lows than their highs. Late this week, for instance, Annaly – one of the largest MBS investing REITs – was trading at $11.30 compared to a 52-week high of $15.98 and a low of $9.66. But better days may be...
The chairman and CEO of CapWealth Advisors – a private equity firm with stakes in the GSEs – was critical of all the housing reform bills introduced so far and the premise that Fannie and Freddie need to be wound down to affect reform.
Since late last year, the FHFA has decreed that it must approve any GSE servicing sale of 25,000 loans or more, which translates into roughly $5 billion of product.
Why doesn’t the MBA, NAHB and National Association of Realtors just come out and say what they really mean, which is this: Leave Fannie and Freddie alone, return them to their shareholders and they’ll never buy another ALT A or subprime mortgage again.
“Not only will FHA continue to go after the big banks, but they’re going after the mid-sized banks as well,” said Andrew Henscel, whose firm defends originators.
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