Over the next 10 months upwards of $15 billion in nonperforming residential loans could hit the auction market – and some of that product will come from Fannie Mae and Freddie Mac. Investment bankers and loan sale advisors familiar with the matter told Inside The GSEs that Fannie could come to market with a multi-million dollar package of residential NPLs before the end of March. One trader told IGSEs that Fannie’s announcement was imminent, but at press time no such proclamation had been made.
California continued to be the leading source of new single-family Fannie Mae and Freddie Mac mortgages during 2012, according to a new Inside The GSEs analysis. A total of $296.1 billion of home loans in the Golden State were securitized by the two GSEs during the 12 months ending on Dec. 31, 2012, accounting for 23.1 percent of their total business for the year. That was up 51.9 percent from total California Fannie/Freddie production back in 2011, while the overall GSE market rose 50.1 percent from a year ago. Although fixed-rate mortgages continued to dominate the GSE market throughout 2012, California produced $11.0 billion in adjustable-rate mortgages – 26.5 percent of the national total. ARMs accounted for just 3.2 percent of total GSE volume.
Although the GSEs ended 2012 with $20.11 billion of pending and disputed buybacks on their books, the halcyon days of loan repurchase disputes may be behind the two, causing both Fannie Mae and Freddie Mac to reconsider their employment of outside due diligence vendors. According to executives who work for these vendors and serve as consultants to the GSEs, over the past several months Fannie Mae has slashed contracts with at least two outside firms…
The mortgage industry remains on guard and is fully prepared to rebuff further attempts by lawmakers to squeeze Fannie Mae and Freddie Mac guaranty fee revenue to fund non-government-sponsored enterprise related pet projects, experts say. Congress’ passage in early 2012 of a payroll tax cut extension bill set a dangerous precedent and emboldened lawmakers to look to the GSEs as a piggy-bank by mandating an increase and using the funds to offset the costs of other programs, according to Robert Zimmer, head of external affairs at the Community Mortgage Lenders of America. “I’m shocked that I’m not hearing anything right now on diverting g-fees to other parts of the federal budget,” said Zimmer. “I think there has been some hardening in town that this is a bad idea but when [Congress is] desperate for money, anything can happen.”
Many mortgage bankers are bracing for a slowdown in originations this year, but they have an even larger concern on their hands: whether Fannie Mae and Freddie Mac will hike their net worth minimum currently set at $2.5 million. The GSEs and their regulator have said little on the subject, but there is rampant speculation that it’s only a matter of time before higher net worth minimums are introduced – it’s just a matter of when,…
The top Democrat of the House Financial Services Committee has “concerns” and wants answers from Fannie Mae’s regulator as to why it pulled the plug on the GSE’s plans to lower the cost of force-placed insurance. Rep. Maxine Waters, D-CA, the committee’s ranking member, dispatched a letter this week to Federal Housing Finance Agency Acting Director Edward DeMarco seeking an explanation as to why the Finance Agency abruptly shut down a plan pushed by Fannie…
Conventional conforming mortgage originations – mostly financed by Fannie Mae and Freddie Mac – accounted for a record 66.8 percent of total single-family lending last year, according to a new market analysis and ranking by Inside Mortgage Finance. Mortgage lenders originated a whopping $1.273 trillion in conventional conforming mortgages in 2012, the highest level since the all-time record of $2.460 trillion was set back in 2003. Volume in the sector started strong and kept building throughout the year, including a 19.1 percent jump from the third to the fourth quarter. For the year, conventional conforming originations were...[Includes two data charts]
A new mortgage reform proposal drafted by a blue-ribbon panel gives a fairly prominent role to private credit enhancement as a key feature in a new mortgage securitization system. While the plan released this week by the Bipartisan Policy Center’s Housing Commission – like all others that came before it – calls for a smaller government role in the mortgage sector, it remains to be seen whether it will get the reform process off the ground in a stalled political environment. The commission, comprised of former lawmakers and cabinet officials, both Republican and Democrat, calls for phasing out the government-sponsored enterprises in favor of a new federal entity that explicitly acts as a backstop of last resort after the private sector. It would replace Fannie Mae and Freddie Mac over a five- to 10-year period with a new “Public Guarantor,” a wholly government entity that would provide an explicit, but limited guaranty on mortgage-backed securities. “The government would cover...
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