Freddie Mac announced this week it has obtained insurance to cover some $285 million of losses on a pool of home loans as part of a risk-sharing effort encouraged by the government-sponsored enterprises’ regulator. The performance of these deals has been “stellar,” according to one analyst. The policies, tied to loans the GSE bought or guaranteed in the second quarter of 2013, were obtained under Freddie’s Agency Credit Insurance Structure. First rolled out in November 2013, this week’s most recent ACIS deal – the largest to date – demonstrates...
Securitization, particularly non-agency securitization of subprime and Alt A mortgages, has been widely blamed for the recent financial crisis, although less-studied home-equity loans also may have contributed, according to a government working paper. Results suggested that securitized home-equity loans have higher default risk and produce greater loss severity than similar loans held in portfolio by lenders, according to authors Michael LaCour-Little, a professor of finance at California State University at Fullerton, and Yanan Zhang, a financial economist at the Office of the Comptroller of the Currency. The authors sampled...
Fannie Mae and Freddie Mac issued $141.83 billion of single-family MBS during the second quarter, an encouraging 9.4 percent increase from the dreary levels recorded in the first three months of 2014.
One MI CEO, who we called, said this: “Thanks for reaching out. We, along with the other MIs are currently in confidential discussions with FHFA and the GSEs regarding the new standards. Unfortunately, we cannot comment until they are public.”
The sale of mortgages by banks took it on the chin in the first quarter. Lower originations is one explanation but are banks keeping more of their own production?
Then again, there are different definitions of what constitutes a “re-performing” mortgage. Most of the loans trading in this market are modified loans that have six to 12 months of seasoning and a clean cash-flow history.
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