The mortgage securitization rate through the first half of 2012 was down a few ticks from the record level reached in the first quarter of the year, but the market remained dominated by lending for Fannie Mae, Freddie Mac and Ginnie Mae MBS programs. A huge 91.5 percent of new mortgage originations were financed through the agency MBS programs during the first half of 2012, according to a new Inside MBS & ABS analysis. Thats down from the 95.8 percent securitization rate achieved in the first quarter, but its comfortably ahead of the securitization rates posted since the financial crisis of 2008. The sky-high securitization rate is partly due...[Includes one data chart]
Legislation was introduced this week in the House of Representatives that would effectively neutralize a proposal for local governments to use eminent domain powers to seize underwater mortgage loans and perform controversial modifications. Rep. John Campbell, R-CA, has introduced The Defending American Taxpayers from Abusive Government Takings Act, which would prohibit the FHA and VA from originating, insuring or guaranteeing a mortgage loan in jurisdictions that have invoked the power of eminent domain to seize a loan within the last 10 years. Fannie Mae and Freddie would be subjected to ...
Mortgage industry officials are lauding the Federal Housing Finance Agencys long-awaited move toward clarity on repurchase demands made by Fannie Mae and Freddie Mac based on lenders representations and warranties. Part of a broader series of FHFA strategic initiatives called seller-servicer contract harmonization, the new rep and warranty framework on GSE mortgages sold or delivered on or after Jan. 1, 2013, aims to clarify lenders repurchase exposure and liability on future deliveries, according to FHFA Acting Director Edward Demarco. Lenders want more certainty about their risk exposure and the enterprises want...[Includes two data charts]
Fannie Mae and Freddie Mac both saw substantial declines in deliveries of home mortgages with balances exceeding $417,000 during the second quarter, offsetting a significant increase in FHA originations of conforming jumbo loans. Combined, the three agencies did $24.1 billion in conforming jumbo mortgage business loans on single-unit properties in the lower 48 states that exceed the old $417,000 loan limit. That was down 16.3 percent from the first three months of 2012 at a time when overall mortgage origination volume fell 5.2 percent. Meanwhile, originations of non-agency jumbo loans rose...[Includes two data charts]
A growing challenge for Fannie Mae and Freddie Mac is the increasingly vigilant role of the Federal Housing Finance Agency Office of Inspector General, according to an industry expert. The FHFA Inspector General, like most IGs, takes his responsibilities seriously, but tends to view things as, if theyre not 100 percent right, then theyre wrong, said Bob Bostrom, a partner at the SNR Denton law firm. He has, I believe, had a chilling effect on the willingness of the enterprises, and the FHFA in some cases, to make business decisions, the former Freddie official said during the American Mortgage Conference sponsored by the North Carolina Bankers Association. The best example of that occured at year-end 2010, when Fannie and Freddie both reached...
What started as a battle between investors has spread to include lenders, borrowers and servicers. Proponents of plans to use eminent domain for principal reduction warn that the government-spon-sored enterprises and lenders could be subject to redlining and other consumer protection regulations for opposing the evolving scheme. No county or municipality has implemented a wide-scale eminent domain plan, though a number of areas are considering the option. Non-agency mortgage-backed security investors have strongly opposed eminent domain proposals, claiming they are unconstitutional, among other issues. This unprecedented use of eminent domain law, if successful, would...
Fannie Mae will retain an equity interest in the nearly 700 real estate owned properties the government-sponsored enterprise has sold off to be managed as rentals as part of the pilot program to move GSE-held foreclosures off the books. The Federal Housing Finance Agency this week announced the first winning bidder in its REO pilot initiative. San Diego-based Pacifica Companies LLC paid $12.3 million for a share in a joint-venture with Fannie for 699 properties in Florida, resulting in an estimated transaction valuation to Fannie of $78.1 million or 95.8 percent of the properties estimated value, according to the transaction summary. Fannie Mae sold...
The Federal Housing Finance Agency incorrectly piggybacked and failed to independently verify Fannie Maes and Freddie Macs mandated assurances or covenants that the GSEs were in compliance with the Treasury Departments terms in exchange for taxpayer support during conservatorship, according to a recent report by the FHFAs official watchdog. The FHFAs Office of Inspector General noted a gap in the Finance Agencys compliance with the terms of the preferred stock purchase agreement with the Treasury.Until June 2012, FHFA did not provide Treasury with a certification that the enterprises filings and related documents were free of materially false or misleading statements, said the OIG report, issued in August.
Fannie Mae and Freddie Mac are obligated to comply with recently enacted Massachusetts law requiring creditors to take commercially reasonable steps to avoid foreclosure, according to a letter to the GSEs conservator from state Attorney General Martha Coakley. The AGs Aug. 23 letter to Federal Housing Finance Agency Acting Director Edward DeMarco puts the agency on notice about a law signed Aug. 3 by Gov. Deval Patrick, D, An Act to Prevent Unnecessary and Unreasonable Foreclosures, which mandates loan modifications when they make economic sense.
The GSEs continued to reduce their footprint in global debt markets during the second quarter of 2012, with new issuance and debt outstanding down from the previous quarter and from the same period a year ago. Fannie Mae, Freddie Mac and the Federal Home Loan Banks issued a combined total of $622.3 billion in new debt during the second quarter, a 12.1 percent decrease from the first quarter and a 14.3 percent decline from the second quarter of 2011. GSE debt outstanding at $1.942 billion fell 14.7 percent from the first quarter and was down 10.4 percent from the same period a year ago.