Passage of legislation from Sens. Tim Johnson, D-SD, and Mike Crapo, R-ID, to reform the government-sponsored enterprises would prompt some changes to the multifamily MBS market, according to industry analysts. While the bill’s impact on the multifamily market is expected to be modest overall, according to Moody’s Investors Service, the pricing advantages seen on multifamily MBS from Fannie Mae and Freddie Mac compared with non-agency commercial MBS would likely disappear. The Johnson-Crapo bill, which is scheduled for a markup next week by the Senate Committee on Banking, Housing, and Urban Affairs, calls for risk-sharing structures in the multifamily market already used by Fannie Mae and Freddie Mac for multifamily MBS, potentially limiting any broad disruptive impact to the multifamily market from the bill. Within one year after the bill becomes law, Fannie and Freddie would be required...

In a development with potentially negative implications for lenders, servicers and investors in student loan ABS, the Consumer Financial Protection Bureau released a report this week critical of the “auto-default” practice seen in private student lending. According to the CFPB’s Mid-Year Update on Student Loan Complaints, borrowers say that some lenders demand immediate full repayment upon the death or bankruptcy of their loan co-signer, even in cases when the loan is current. Borrowers also said they confronted bureaucratic barriers to releasing co-signers from their loans, something that could help avoid auto-defaults. “Students often rely...

Government-sponsored enterprises Fannie Mae and Freddie Mac are off to a solid start to the year in terms of their multifamily business in what is expected to be a more competitive year in 2014 than the market saw last year. Whether they can match last year’s levels is an open question. Fannie issued...[Includes one data chart]

At one shop based in the Midwest there’s unconfirmed talk of loan officers who haven’t been paid for months, unpaid leases and top executives who were on vacation as volumes collapsed.

HUD Secretary Shaun Donovan said this week that housing finance reform can no longer be put off, but no more so than for the FHA which continues to play an “outsized role” in the mortgage market as private capital remains on the sidelines. Speaking in New York at an event co-hosted by the Bipartisan Policy Center, Donovan said the Obama administration is squarely behind the legislative proposal by Senate Banking, Housing, and Urban Affairs Committee Chairman Tim Johnson, D-SD, and Ranking Member Mike Crapo, R-ID. “Despite its imperfections, does this bill represent progress? Absolutely,” said Donovan, seeking to win over housing advocacy groups disenchanted with the bill. “When looking for ways to improve [the bill], let’s not lose sight of its potential. Let’s not forget its importance to the housing market and its future.” The Johnson-Crapo legislative proposal calls for a wind-down of Fannie Mae and Freddie Mac and creation of a ...

Fannie Mae Announces Changes in Desktop Underwriter for VA Loans. On April 15, Fannie Mae issued a release note announcing several changes to Desktop Underwriter for VA loans that will take effect during the weekend of May 17, 2014. The DU determination of when a bankruptcy occurred on VA loan case files will be updated. With the May change, bankruptcy information found in publicly accessible segments of the credit report will be used in determining when the bankruptcy occurred. A waiting period requirement will then be applied. The bankruptcy information in the tradeline segment will only be used to determine when the bankruptcy happened if the public records show no such info. However, if the records do reflect a bankruptcy but the date is either blank or invalid, DU will issue a “refer” recommendation. The lender must review the credit report and bankruptcy documentation to ...

So, what does this mean for the industry? Answer: That the Mortgage Mutual Insurance Fund likely will return to health even faster and that maybe there’s room for FHA to cut premiums.

Even in the depths of the financial crisis, the mortgage industry was producing more new loans than it did during the first quarter of 2014, according to new Inside Mortgage Finance estimates. Mortgage lenders generated just $235 billion of new home loans during the first three months of this year. That was down 23.0 percent from the fourth quarter’s estimated $305 billion in originations and it was off 58.0 percent from the first quarter of 2013. It was...[Includes one data chart]

Nonbank mortgage lenders accounted for a hefty 43.2 percent of single-family mortgages securitized by Fannie Mae and Freddie Mac during the first quarter of 2014, according to a new analysis of loan-level data by Inside Mortgage Finance. Nonbanks delivered $55.8 billion of home loans to the government-sponsored enterprises during the first three months of 2014. That was down 17.7 percent from the previous quarter, but overall GSE business was down even more, by 29.1 percent. Both subsets of the nonbank segment – larger companies that ranked among the top 25 lenders overall and smaller mortgage companies – claimed...[Includes one data chart]

Declaring this week that “inaction is simply not an option,” Housing and Urban Development Secretary Shaun Donovan said that the Senate’s pending bipartisan housing finance reform bill represents “the single best chance” to overhaul the mortgage-finance market this decade. Speaking in New York at an event co-hosted by the Bipartisan Policy Center, Donovan said the Obama administration is squarely behind the legislative proposal by Senate Banking, Housing, and Urban Affairs Committee Chairman Tim Johnson, D-SD, and Ranking Member Mike Crapo, R-ID. “Despite its imperfections, does...