The Federal Reserve’s Open Market Committee this week fulfilled the expectations of roughly half the Wall Street participants and economists surveyed by financial news organizations and opted to hold the line on interest rates, and to maintain the status quo when it comes to the Fed’s massive balance sheet holdings of agency residential MBS and debt. “We recognize that there has been a great deal of focus on today’s policy decision,” Fed Chair Janet Yellen said in her press conference after the FOMC’s two-day meeting concluded Thursday afternoon. “The recovery from the Great Recession has advanced sufficiently far, and domestic spending appears sufficiently robust, that an argument can be made for a rise in interest rates at this time. We discussed this possibility at our meeting. “However, in light of the heightened uncertainties abroad, and a slightly softer expected path for inflation, the committee judged...

In an analysis of Fannie Mae and Freddie Mac loan-level loss data, Fitch Ratings concluded that while similar, there are differences between loss severities among loans with similar profiles. Fannie disclosed its loan-level loss data in late July to increase transparency to the market as it plans for an actual-loss credit offering in the fourth quarter. Fannie’s loan-level loss data was comparable to historical loss severities for its liquidated mortgages and the fixed loss-severity schedules used in its Connecticut Avenue Securities risk-transfer deals, said the Fitch report this week. All CAS risk-sharing transactions have passed...

If the CEOs of Fannie and Freddie get their raises reversed, what will they do?

With a lack of consensus from industry participants, let alone members of Congress, regarding how to reform the government-sponsored enterprises, the risk-sharing transactions implemented by the GSEs in recent years are seen as one possible model for increasing private capital investment in the mortgage market. Stanford Kurland, chairman and CEO of PennyMac Financial Services, suggested that the predominant risk-sharing transactions used by Fannie Mae and Freddie Mac have significant limitations. In an opinion piece published last week in the American Banker, Kurland said front-end risk-sharing “should be a bridge to long-term reform.” The main risk-sharing efforts completed by the GSEs are...

The Common Securitization Platform currently under development for use by the government-sponsored enterprises has seen some twists and turns regarding potential use for non-agency mortgage-backed securities. Various officials working on the CSP stressed this week at the ABS East conference in Miami that the focus for the platform is activity by Fannie Mae and Freddie Mac. “The platform is adaptable, but our focus is on the enterprises,” said David Applegate, CEO of Common Securitization Solutions, the Fannie Mae/Freddie Mac joint venture that is developing the CSP. At the conference produced by Information Management Network, he noted...

Officials from the Consumer Financial Protection Bureau, Wells Fargo and other industry players are set to provide an update on qualified mortgages and other CFPB initiatives...

One standout: FHA, where jumbo production soared in the second quarter, more than doubling to $6.8 billion.

What do Fannie/Freddie officials say about the walk-out? They were amused at the effort but declined to comment on-the-record.

Originations of jumbo mortgages rose sharply during the second quarter of 2015, including loans in high-cost housing markets that are eligible for agency mortgage-backed securities, according to a new Inside Mortgage Finance ranking and analysis. During the second quarter, the market produced a whopping $127.6 billion of home mortgages that exceeded the $417,000 benchmark conforming loan limit, a 33.1 percent increase from the first three months of the year. Jumbo mortgages accounted for 28.7 percent of second-quarter originations, the highest ratio since “emergency” high-cost limits were set back in 2008. Most of the jumbo production was...[Includes three data tables]

Now that interest rates have stopped falling – at least, for now – the servicing acquisition market has shifted into high gear with talk of a steady stream of both flow and bulk transactions through the remainder of 2015. “This could turn out to be one of the best quarters of the year for sales,” said Mark Garland, president of MountainView Servicing Group, Denver. “If it’s not the best, it could be close.” Tom Piercy, managing member of Interactive Mortgage Advisors, noted...