GSE mortgage sellers repurchased a slightly larger volume of defective single-family mortgages during the first quarter of 2018, according to a new Inside The GSEs analysis.During the first three months of the year, lenders repurchased or made other indemnification on $240.91 million of home loans sold to the GSEs, a 4.6 percent increase from the record low set in the fourth quarter of 2017. Buybacks of Fannie loans were up 27.2 percent, but ... [Includes one data chart.]
Just as optimistic talk of GSE reform was fading, in a surprise move late this week the Trump administration revealed a proposal to end the 10-year conservatorship. The gist of it is to reduce the GSEs’ footprint in the housing market through more competition and provide an explicit U.S. guarantee on conventional mortgage-backed securities that is separate from the federal support for low- and moderate-income borrowers.The three-page proposal, billed as a reorganization plan, is part of a larger “Delivering Government Solutions for the 21st Century” publication revealed on June 21. “This proposal would reorganize the way the federal government delivers mortgage assistance and go beyond...
The Treasury Department wants to reduce the GSEs’ footprint in the mortgage market, according to Treasury Counselor Craig Phillips. He also reiterated, about a week before the administration formally published its thoughts on reform (see story page 3), that ultimately the goal is to take Fannie Mae and Freddie Mac out of conservatorship. He said that at 70 percent the federal share of housing is clearly far too high. The Treasury official spoke at a Bank of America Merrill Lynch mortgage and housing finance conference in New York last week that was closed to the press. BAML provided a report on his remarks.
Fannie Mae and Freddie Mac are both working on upgrades to the servicing marketplaces they operate that facilitate the sale of flow servicing rights into the secondary market. The goal is to make the MSR sales process quicker, seamless and more transparent – and at no cost to the loan seller. On the surface it all sounds good, but a handful of investment banking executives told Inside The GSEs they’re worried about the future direction of the servicing marketplaces and want to make sure they don’t encroach on their turf. None of the firms that broker the sale of MSR were willing to go on the record regarding their gripes.
The Federal Housing Finance Agency’s proposed new risk-based capital requirements for the GSEs released last week has some industry participants asking the regulator to take it a step further. Although the $180.9 billion combined capital requirement won’t go into effect now and is merely an example of what would be if Fannie Mae and Freddie Mac were not in conservatorship, the FHFA is seeking comment on the proposal. Capital requirements for the duo have been suspended since the 2008 conservatorship, but FHFA Director Mel Watt said it’s important for the regulator “to articulate our views on capital requirements and to start a healthy discussion about the amount of capital the enterprises should have to appropriately shield taxpayers from assistance.”
Freddie Mac launched a program to help financially strapped borrowers find jobs in underserved regions, such as the middle Appalachia, that lack employment opportunities. The program is part of the GSE’s three-year duty-to-serve plan. The GSE collaborated with NextJob to create an initiative aimed at both current Home Possible borrowers as well as borrowers looking for a better income to qualify for a loan. Home Possible specifically targets first-time homebuyers and low- to moderate-income borrowers. Borrowers who have lost their jobs, had their hours reduced or face other employment challenges that threaten timely mortgage payments will be able to...
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