The GSEs continued to reduce their footprint in global debt markets during the second quarter of 2012, with new issuance and debt outstanding down from the previous quarter and from the same period a year ago. Fannie Mae, Freddie Mac and the Federal Home Loan Banks issued a combined total of $622.3 billion in new debt during the second quarter, a 12.1 percent decrease from the first quarter and a 14.3 percent decline from the second quarter of 2011. GSE debt outstanding at $1.942 billion fell 14.7 percent from the first quarter and was down 10.4 percent from the same period a year ago.
The Federal Housing Finance Agency is suing a unit of Deutsche Bank demanding the bank repurchase loans backing now toxic mortgage securities. Acting as conservator to Freddie Mac, the FHFA filed suit on Aug. 24 in New York State Supreme Court in Manhattan against DB Structured Products Inc. The Finance Agency alleges that DBSP breached promises about loans that were pooled and securitized and failed to repurchase the loans as required, according to the agency’s court filing.
The average fee charged by Fannie Mae and Freddie Mac to lenders rose last year, while payments collected on the Home Affordable Refinance Program dropped off, according to the Federal Housing Finance Agency.The fourth-annual FHFA study found that the average total guaranty fee charged by Fannie and Freddie on single-family mortgages was 28 basis points in 2011, compared to 26 bps in 2010. When HARP and flexible refinance loans were excluded, the FHFA said the total average g-fee increased to 26 basis points in 2011 from 24 basis points in 2010. “That change reflects increases in both the average ongoing fee and the average upfront fee,” the FHFA report said.
Given that Fannie Mae and Freddie Mac were a “primary cause” of the housing crisis, the two GSEs should be “wound down in size and scope,” according to the Republican party platform. Unveiled last week during the GOP convention in Tampa where former Massachusetts Governor Mitt Romney was confirmed as the party’s presidential nominee, the platform made mention of the Republican position on principal reduction, noting that “taxpayer dollars should not be used to bail out borrowers and lenders by funding principal write-downs.”
The Federal Housing Finance Agency has failed to implement its initiative to dispose of GSE and government-held real estate-owned properties in an “open and transparent manner” in the Golden State, according to the California Association of Realtors. Two weeks ago CAR renewed its vocal opposition to the FHFA’s implementation of an REO bulk sales pilot initiative in California, accusing the Finance Agency of advancing the program in a “highly secretive manner” despite the “negative economic impact” the trade group says it will have on the state’s housing market.
Fifth Third Bank received the highest ranking among servicers ranked by Fannie May during the first half of 2012, the GSE recently announced. In 2011, Fannie rolled out its Servicer Total Achievement and Rewards (STAR) program, designed to encourage customer service improvements and better foreclosure prevention outcomes for homeowners by rating servicers on their performance in those areas.
Mortgage repurchases and indemnifications by Fannie Mae and Freddie Mac seller-servicers increased during the second quarter of 2012, but the inventory of pending and disputed buyback demands continued to grow. A new Inside Mortgage Trends analysis of repurchase disclosures made by the two government-sponsored enterprises reveals that lenders repurchased some $3.03 billion of home loans, or otherwise indemnified the GSEs for losses on these loans, during the second quarter. That was ... [Includes one data chart]
New issuance of single-family agency MBS pass-through securities increased by 12.2 percent from July to August, pushing the market over the $1 trillion mark for the year with plenty of gas still in the tank. A new Inside MBS & ABS ranking and analysis reveals that all three agencies saw solid gains in MBS issuance last month, largely based on increased refinance activity. Agency MBS production climbed to $149.2 billion in August, the highest monthly production level since March. Ginnie Mae posted the biggest gain, a 15.1 percent increase from July levels, but Freddie Mac (13.5 percent) and Fannie Mae (10.3 percent) also saw healthy increases in production volume. Total agency issuance for the first eight months of 2012 was...[Includes one data chart]
Last month’s surprise move by the Treasury Department to revise the preferred stock purchase agreements with Fannie Mae and Freddie Mac definitively settles the question of “when” not “if” the two government-sponsored enterprises are to be wound down but it also removes any remaining sense of urgency to push a legislative solution to GSE reform, according to industry analysts. On Aug. 17, Treasury announced it will require Fannie and Freddie to turn over any profits they earn to the government. Rather than continue to borrow from the Treasury to make a 10 percent dividend payment to the Treasury, the revised PSPA implements a “full income sweep” of GSE profits. Additionally, Treasury’s announcement calls...
The Homeownership Protection Program Joint Powers Authority Board, a partnership between California’s San Bernardino County and two of its local communities, unanimously directed staff to develop a request for proposals that would invite interested parties with any kind of formal plan to assist underwater families in the JPA area to submit those plans for board consideration. The JPA is examining local government solutions to the negative-equity issues many homeowners in the two participating communities of Fontana and Ontario are having, with the goal of keeping families in their homes, reducing defaults and foreclosures, and enhancing the economic health of the communities. “Presently, the board has not received...
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