Federal Housing Finance Agency lawsuits over pre-crisis non-agency MBS are winding down with one of the last holdouts, Royal Bank of Scotland, reaching a settlement this week for $5.5 billion. In 2011, the agency filed charges against 18 issuers and underwriters alleging securities law violations and fraud regarding non-agency MBS sold to Fannie Mae and Freddie Mac. JP Morgan Chase settled for $4.0 billion, Deutsche Bank for $1.9 billion and Goldman Sachs for $1.2 billion. Most of the cases were settled in 2013 and 2014. The two government-sponsored enterprises purchased...
The average daily trading volume of agency MBS reached $209.9 billion in June, the second highest reading of the year and a sign that liquidity is picking up, according to figures compiled by the Securities Industry and Financial Markets Association. The increase in trading comes despite the fact that Fannie Mae, Freddie Mac and Ginnie Mae issued a total of $317.7 billion of new MBS in the second quarter, a 6.1 percent decline from the first quarter. For the six-month period, 2017 holds the edge with volume up 3.5 percent. But it hasn’t been...
As talks intensify on how to get Fannie Mae and Freddie Mac out of limbo, smaller lenders are clamoring to make sure they have a say in how housing-finance reform plays out. Nearly all sides agree that small lenders should continue to have access to the secondary market; how that’s accomplished is a different matter. The Main Street GSE Reform Coalition – an umbrella group made up of small-lender and community-advocacy groups – wants the government-sponsored enterprises to begin rebuilding capital buffers by suspending their dividend payments to the Treasury Department. It also wants...
The proposal to restructure the credit-risk transfer debt-note programs at Fannie Mae and Freddie Mac to make them more attractive to real estate investment trusts likely won’t have a negative impact on the credit risk and quality of those deals, Morningstar said in a new report. The proposed changes to Fannie’s Connecticut Avenue Securities and Freddie’s Structured Agency Credit Risk programs would characterize them as real estate mortgage investment conduits. This would allow REITs and some overseas investors to participate more broadly in the programs. Currently, the structure of the government-sponsored enterprises’ popular CRT programs doesn’t meet...
According to Fairholme’s math, the GSEs earn over $15 billion a year, and taxpayers own 80 percent of the companies (via the senior preferred). Berkowitz values the senior stock at $100 billion…
Two companies that were created earlier in the decade to buy mortgage servicing rights at rock-bottom prices are headed in different directions these days: Seneca Mortgage Servicing is exiting the business, while Pingora Loan Servicing is slated to change hands for the second time in a year. As Inside Mortgage Finance went to press this week, investment banker Houlihan Lokey was involved in direct negotiations to sell Seneca’s $53.6 billion servicing portfolio, which is considered pristine in nature. Investment banking sources said...
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