Two prominent GSE multifamily lenders cut production in the fourth quarter as they adjusted to the new investment limits set for Fannie and Freddie. The new caps are unlikely to constrain GSE business in 2020.
Many analysts anticipated the implementation of CECL would balloon the loan loss reserves of the GSEs. Last week, though, both enterprises downplayed CECL’s potential impact on first-quarter earnings.
For the first time, Freddie was able to charge a higher average g-fee for new single-family business during the fourth quarter of 2019. Pricing disparity was a key driver in the development of the uniform MBS.
Issuance of single-family MBS backed by newly originated loans rose 12.3% from the third to the fourth quarter, while primary-market production was up just 7.9%. (Includes data chart.)
The increase in agency MBS from December to January came from the Ginnie program, which has a slower securitization process than Fannie and Freddie. And some loans may have been held back to benefit from higher loan limits. (Includes two data charts.)