Analysts commenting on the settlement note that while JPM did not admit any violations of law, it acknowledged in a “statement of facts” section that employees did not comply with company underwriting guidelines and representations.
The purchase mortgage share of originations is expected to increase significantly, from 30 percent in 2012 to 79 percent in 2015, according to Freddie Mac.
Freddie Mac projects that interest rates on 30-year fixed-rate mortgages will hit 5.00 percent by the end of 2014, with little impact on affordability.
Speaking at a housing finance forum sponsored by the Urban Institute and CoreLogic, Gene Sperling, a White House economic advisor, said the Obama Administration believes the “risks are simply too great and that this would recreate the problems of the past.”
Mortgage professionals who work the M&A trade contend that interest in residential finance is not waning in the least, but potential buyers are being a bit more choosey these days.
The Federal Housing Finance Agency has directed the two GSEs to accelerate their portfolio trimming by focusing on “less-liquid” assets other than their own MBS.
A Miami-based investment management firm, one of the largest junior preferred shareholders of Fannie Mae and Freddie Mac, this week offered to buy and operate the MBS guaranty businesses of the two government-sponsored enterprises with $52 billion of private capital and “a business plan that is sustainable with or without a federal reinsurance plan.” In a four-page letter to Federal Housing Finance Agency Acting Director Edward DeMarco, Bruce Berkowitz, chief investment officer of Fairholme Capital Management, proposed to form two new state-regulated insurance companies to own and operate the assets of Fannie and Freddie “that are relevant to the continuing insurance business.” Under the Fairholme plan, the new MBS guarantors would be capitalized...
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