This spring, Fannie provided Invitation Homes with a $1 billion financing vehicle, which gave the real estate investment trust a cheaper cost of funds than tapping the MBS market.
Fannie Mae and Freddie Mac saw a 13.1 percent drop in new business in their flagship single-family mortgage-backed securities programs during the second quarter, according to an exclusive analysis and ranking by Inside Mortgage Finance. The two government-sponsored enterprises issued a combined $189.70 billion of single-family MBS during the April-June cycle. It was their weakest quarter since early last year, although year-to-date volume was still up 4.3 percent from the first half of 2016. As widely predicted, the decline was...[Includes three data tables]
An analysis of non-qualified mortgages suggests that many of these borrowers have credit qualities strong enough to qualify for a mortgage that could be delivered to the government-sponsored enterprises. However, issues involving credit events and income documentation can disqualify such borrowers from conventional mortgages. According to an analysis by Morningstar Credit Ratings, the weighted-average loan-to-value ratio for securitized non-QMs is 75.2 percent and the average debt-to-income ratio on the loans is 36.6 percent. The rating service noted that QMs (including agency and non-agency mortgages) have an average LTV ratio around 69.0 percent and an average DTI ratio around 32.3 percent. In addition to showing that certain characteristics don’t differ much between QM borrowers and non-QM borrowers, the analysis suggests...
“In a normal [commercial] bank acquisition, senior managers usually get a big payday,” said former FHLBank Chicago President Alex Pollock. “But in this case, if you merge [with another FHLB] you could lose your job.”
The rating service said investors should have access to the reviewer’s findings or access to other information that would help determine if a breach should be pursued.
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