Housing-finance reform may want to take some cues from the mortgage-finance system in Denmark, according to the Federal Reserve Bank of New York in a new report comparing and contrasting the two systems. In fact, the creditor-friendliness of the Danish system means that relatively more price risk is borne by the homeowner. One of the bases for NY Fed’s recommendation is that, unlike in the U.S., the Danish system remained stable and solvent during the 2007-2009 financial crisis. And, despite falling home prices, the Danish system didn’t require government intervention or funding. The authors chose that system because they said it’s most similar to the model in the U.S.
The Federal Housing Finance Agency is seeking feedback regarding the level of paperwork burden placed on it when it comes to making sure that appraisal management companies meet the minimum reporting and record keeping requirements. A 2015 regulation made it mandatory that states with appraisal management companies, intermediaries between appraisers and lenders, establish a minimum registration and supervision program. And within that requirement, states are to review and approve or deny any application for registration.The FHFA noted that this burden is divided equally among the Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, the Board and the FHFA.
Treasury Official Sees Major Impact from Single Security. A key Treasury Department official suggested that issuers of non-agency MBS may someday participate in the common securitization platform being developed by Fannie Mae and Freddie Mac. Craig Phillips, counselor to the Treasury, said the industry has made a lot of progress toward the launch of the single security that is scheduled for June 2019. “Industry preparedness is about an eight or nine on a scale of 10,” he said during remarks at this week's secondary market conference sponsored by the Mortgage Bankers Association in New York. Phillips characterized the...
Credit characteristics continue to vary greatly between the two government-sponsored enterprises in the conventional market and Ginnie Mae. During the first quarter, the average credit score at Fannie Mae was 741.15, slightly below the average 744.73 at Freddie Mac. But the average score for Ginnie business was just 686.91. Purchase mortgages typically have higher credit scores – along with higher debt-to-income ratios – than refinance loans ... [Includes two data charts]
Sen. Bob Corker, R-TN, said passing legislation this year “evidently is not going to happen” and his sense is that Fannie Mae and Freddie Mac will stay in conservatorship “for some time.”
It doesn’t look likely that the Federal Housing Finance Agency is going to take up a call by community mortgage lenders to look into allegedly unfair volume discounts made by private mortgage insurers to large mortgage lenders.
The FHFA said reviews have helped align GSE prepayment speeds in the past few years while helping to make sure MBS investors’ interest are considered in the equation.
Most of the decline in FHA business was in purchase-mortgage lending while VA business took a hit due to reductions in the Interest Rate Reduction Refinance Loan program.
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