The mortgage and housing sectors expect the Federal Housing Finance Agency to unveil lower GSE loan limits this fall – it’s just a matter of when. A handful of developments are affecting the timing of that decision, including intense lobbying by the National Association of Realtors and National Association of Home Builders, and a growing concern that mortgage bankers are already swamped with implementation deadlines tied to a slew of new rules from the Consumer Financial Protection Bureau.
The Federal Reserve’s relentless acquisition of agency MBS has been the biggest factor in the changing complexion of the MBS investor picture, far outstripping the tortoise-like pace at which the market has expanded this year. The Fed increased its agency MBS holdings by 12.8 percent during the second quarter of 2013, according to a new Inside MBS & ABS profile of investor classes in the mortgage securities market. The central bank added $137.2 billion to its agency MBS holdings during the quarter, and its gross acquisitions totaled $466.6 billion since the beginning of the year. That represented...[Includes two data charts]
The loan limit reduction under consideration by the Federal Housing Finance Agency wouldn’t have a major impact on the volume of agency MBS issuance, but industry analysts say prepayment rates on outstanding agency MBS could slow. Mortgages with loan balances greater than $417,000 accounted for 7.9 percent of the $327.76 billion in Fannie Mae and Freddie Mac production in the second quarter of 2013. And mortgages with balances of between $400,000 and $417,000 accounted for a 7.2 percent share, though a significant portion of those originations were in areas with high-cost loan limits and would likely still be eligible for sale to the government-sponsored enterprises. Analysts at Barclays Capital said...
Investors are eager to get their hands on upcoming risk-sharing deals from Fannie Mae and Freddie Mac even though Freddie’s recent deal was unrated. According to interviews with investors in Freddie’s $500 million Structured Agency Credit Risk bond, 50 different companies bought into the deal with “at least 20 different investors in each tranche,” according to confidential research on the transaction supplied to Inside MBS & ABS. “Word has gotten around...
With mortgage refinance activity flagging in the wake of a spike in interest rates that began months ago, the Federal Housing Finance Agency this week launched a campaign to get more mileage out of the Home Affordable Refinance Program. (Includes one data chart.)
The FHFA’s HARP outreach effort includes public service announcements by Mike Aubrey, a real estate agent based in North Potomac, MD. He stars in a reality TV show, “Power Broker,” that premiered on HGTV in July
Fannie Mae and Freddie Mac are continuing to work on revised eligibility standards for mortgage insurance companies that likely will reduce the 25-to-1 maximum risk-to-capital ratio enjoyed by guarantors that cover their loans. Some type of guidance is expected, at least from one of the GSEs, by the end of October.
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