Fannie Mae, Freddie Mac and their government overseer are considering adding new features to the common securitization platform in addition to the major components in the initial design, according to officials speaking at the Mortgage Bankers Association Secondary Market Conference in New York this week. A potential addition to the project would include “life flow data” about the mortgage transaction, said Manoj Singh, associate director in the Federal Housing Finance Agency’s Office of Strategic Initiatives. The common securitization platform, or CSP, has been focused on the securitization function, but feedback from the industry has raised the prospect of expanding it to house all the data points that could be needed over the life of the loan, including foreclosure disposition, if it comes to that. Once the government-sponsored enterprises start...
Most mortgage industry observers expect the Federal Housing Finance Agency to raise Fannie Mae and Freddie Mac guaranty fees by about 20 basis points this year, but many are convinced that the impact on market practices may be bigger than the magnetic effect on private capital. The FHFA has said it wants to raise g-fees to the point that private capital comes into the market, according to Paul Mullins, a senior vice president and interim head of single-family at Freddie Mac. During remarks at the secondary market conference sponsored by the Mortgage Bankers Association this week, he said “The odds are reasonably good you will see higher guaranty fees.” Already around 50 bps and twice their historic level, the fees charged...
The mortgage industry has a window of opportunity to improve the secondary market without having to wait years for Congress to deal with Fannie Mae and Freddie Mac, according to the leadership of the Mortgage Bankers Association, which this week announced a three-prong agenda that doesn’t depend on new legislation. The conservatorships of the two government-sponsored enterprises, which will be five years old in October, were intended to be a short “time out,” and there is still no endgame in sight or any plan for transition, said MBA President and CEO David Stevens, during the group’s secondary market conference in New York this week. Stevens outlined...
Raising capital for privately held nonbank lenders that want to grow their holdings of residential mortgage servicing rights – or get into the market – has been mostly a dormant business since the housing bust of 2008, but Steadfast Capital hopes to change all that. And the newly launched company isn’t just raising capital through equity and structured debt offerings – it plans to invest alongside the lenders it’s working for. “We have a willingness to invest in every deal,” said Steadfast president, CEO and founder David Fleig. “It’s important to us.” Presently, Steadfast is talking...
Fannie Mae and Freddie Mac this week reported a combined $63.3 billion in net income during the first quarter of 2013, which represents a huge dividend to taxpayers on the total $189.4 billion capital infusion they received since going into conservatorship. Together, the two government-sponsored enterprises will have paid $131.6 billion to the Treasury by the end of the second quarter, when the government “sweep” of excess net worth takes place. Under the terms of their bailout, the GSEs never pay down their Treasury draws, regardless of how much they pay in preferred stock dividends or net-worth sweeps. But Fannie and Freddie are...
Expanding Fannie Mae’s and Freddie Mac’s loan modification policy to include principal forgiveness under the Home Affordable Modification Program would generate fewer than 60,000 additional modifications and avoid up to 100,000 defaults, according to the Congressional Budget Office. The Congressional numbers-cruncher concluded that reaching additional borrowers “would require a significant departure” from HAMP’s current eligibility rules. In 2010, the Treasury Department expanded...
Lenders, already facing the legal risks due to the Consumer Financial Protection Bureau’s ability-to-repay rule, may face further problems trying to make sure loans originated for sale to Fannie Mae and Freddie Mac can actually be delivered to the government-sponsored enterprises. The Federal Housing Finance Agency this week said the GSEs will be prohibited from buying anything other than qualified mortgages, as that term is defined by the ATR rule. The directive rules out interest-only loans – Fannie has purchased a smattering of these loans but Freddie shut down its IO program a while ago – and mortgages with terms exceeding 30 years, a product neither GSE buys. The troublemaker in the policy is...
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