A wide range of mortgage industry participants cautioned the Federal Housing Finance Agency that increasing the guaranty fees charged by Fannie Mae and Freddie Mac won’t necessarily prompt an increase in non-agency activity. In June, the FHFA solicited public input about what g-fee level would prompt investors in non-agency mortgage-backed securities to find it profitable to enter the market or prompt banks to hold conforming-balance mortgages in portfolio. “Policymakers should not assume that increases in g-fees alone will lead to a significant increase in private-label securities issuance,” said the Securities Industry and Financial Markets Association, which stressed that a number of factors beyond the pricing of agency mortgages are limiting non-agency activity.
“If g-fee increases were being used to build up enterprise reserves, instead of being swept under the Treasury agreement, we would be more open to such increases,” said the CHLA.
Non-agency jumbo mortgage originations accounted for a historically high 19.4 percent of new lending during the first half of 2014, and the sector is steadily gaining ground, according to a new Inside Mortgage Finance analysis of big-ticket mortgage activity. During the second quarter of 2014, lenders originated an estimated $59.0 billion of mortgage loans that were too big to be financed through Fannie Mae, Freddie Mac or the FHA. That was up 34.1 percent from the first quarter, a noticeably bigger increase than the 25.5 percent jump in total mortgage originations for the period. Compared to last year, jumbo lending was...[Includes three data charts]
The Federal Housing Finance Agency should abandon its proposed increase in guaranty fees charged by Fannie Mae and Freddie Mac, according to a number of industry groups. The Mortgage Bankers Association said in a comment letter that it opposes hikes in g-fees and loan-level price adjustments, noting that g-fees have become attractive to Congress as cash cow means for funding non-housing programs. “Clearly, the GSEs were undercapitalized...
A Congressional Budget Office conclusion that the leading bipartisan mortgage-reform bill could save the government a lot of money likely won’t bring the legislation back to life in this Congress, but it could bolster a similar approach down the road. The CBO estimated that replacing Fannie Mae and Freddie Mac with a new securitization program that couples a first-loss position for private capital with back-end government insurance could reduce “direct spending” by $60 billion over the 2015-2024 period. The Housing Finance Reform and Taxpayer Protection Act of 2013, S. 1217, drafted by Senate Banking, Housing and Urban Affairs Committee Chairman Tim Johnson, D-SD, and Ranking Member Mike Crapo, R-ID, would establish...
Although the Federal Reserve has tapered its agency MBS purchases significantly, the central bank continued to grow its holdings during the second quarter.
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