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.”
A proposed rule that was touted to give Federal Home Loan Banks more flexibility in allocating their affordable housing funds is catching heat from many industry stakeholders. In fact, many deemed the proposed rule, issued on March 14, too complex to digest during the initial 60-day comment period and asked for an extension. One of the groups, the National Association of Home Builders, said, “The complexity and magnitude of the revision make the 60-day comment period an extremely difficult timeframe in which to assess and respond to the proposal.”The comment period was extended by 30 days and closed last week. There were 404 comments in all and more than 100 came in on June 12, the last day to offer input.
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...
Rep. Maxine Waters, D-CA, introduced a bill last week that would require the Federal Housing Finance Agency to supervise servicers that do business with Fannie Mae and Freddie Mac. Waters said H.R. 6101, the Homeowner Mortgage Servicing Fairness Act of 2018, was drafted to better protect homeowners facing foreclosure. Just two months ago, the ranking member of the House Financial Services Committee also introduced a bill to prevent foreclosures on certain FHA borrowers. She argued that despite the lessons learned during the foreclosure crisis, bad behavior by mortgage servicers continues. “Borrowers can’t choose their servicer, so it’s especially important that Congress provide strong protections to prevent servicers from taking advantage of borrowers and to protect borrowers from...
Banks and thrifts reported holding $554.0 billion of Federal Home Loan Bank advances at the end of March, a quarterly decrease of 4.9 percent and the lowest volume of advances since the first quarter of 2017 when they stood at $522.5 billion, according to an Inside The GSEs analysis.On a year-over-year basis, that represents a 6.0 percent increase in advances overall. While JPMorgan Chase remains in the number one spot with $56.9 billion in advances, that number continues to represent a downward spiral from the previous four quarters. In the first quarter, Chase had $60.6 billion in advances.
Fannie Mae introduced a program this month to boost manufactured home ownership by giving manufactured housing properties the same advantages as site-built homes. Manufactured housing under the MH Advantage initiative is designed to meet specific construction, architectural and energy efficiency standards that are more in line with site-built homes.Fannie explained that the specific architectural and aesthetic features include a higher pitch roofline, lower profile foundation, garages or carports and dormers. The MH should also be built with more durable siding materials and energy efficiency standards. One of the goals is to encourage more consumers to consider manufactured homes and help bridge the gap in affordable housing.
Fannie Mae and Freddie Mac recently updated their servicing guides with a new consolidated forbearance plan to help servicers assist struggling borrowers. There will now be one single policy for forbearance plans. Fannie noted that the goal was to make it easier for servicers to assist borrowers who are experiencing a short-term hardship and to simplify servicing by making it more efficient. The plan covers challenges related to unemployment, unique hardships, military service, and disaster events. This also helps simplify the GSEs’ policies on disaster assistance. Under the new requirements, the servicer may approve forbearance plans that last up to six months and may offer consecutive forbearance plans of up to 12 total months without requiring a Borrower Response Package.
Fitch Accepts GSE Valuation Tools in New RMBS Criteria. Fitch Ratings updated its residential mortgage-backed securities criteria to allow Fannie Mae’s Collateral Underwriter and Freddie Mac’s Loan Collateral Advisor to be used as third-party support of original appraisal in U.S. RMBS transactions. This allows for use of CU or LCA in support of appraisals for conforming and non-conforming loans that are less than two years old and are secured by one-unit single-family properties. FHFA’s Fifth NPL Sales Report. Fannie Mae and Freddie Mac sold 90,921 nonperforming loans with a total unpaid principal balance of $17.4 billion through Dec. 31, 2017, according to the most recent NPL sales report. NPLs sold had average...
MBS guarantee fees currently charged by Fannie Mae and Freddie Mac are at levels sufficient to meet capital requirements recently proposed by the Federal Housing Finance Agency, according to industry analysts. The proposal could also bring attention to cross-subsidization in g-fee pricing, especially under a new FHFA director.
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