Economists and real estate executives warn that getting rid of the GSEs’ affordable housing goals, as suggested in some housing-finance reform proposals, will most likely lead to fewer options for underserved borrowers. Currently, Fannie Mae and Freddie Mac have affordable housing goals that work in tandem to their duty-to-serve underserved markets mandates. But a draft reform proposal by Sen. Bob Corker, R-TN, would replace the affordable housing goals with a new fee-based incentive system.“A potential reduction in federal backing for home loans issued to underserved borrowers as a result of ongoing GSE reform efforts is likely to decrease lending in these communities,” said...
CRT Market Better Able to Warn of Downturn. The credit-risk transfer market created in recent years by Fannie Mae and Freddie Mac is better poised to warn of systemic risk than the MBS market was prior to the financial crisis, according to new research by Susan Wachter of the University of Pennsylvania’s Wharton School. The Wharton professor noted that the future structure of the housing-finance market, in particular the number of issuers of government-backed MBS, may change how the CRT market functions.A multiple-guarantor model, with each offering its own CRT deals, may be less liquid than the current market with just two issuers, Wachter suggested. Fannie Hires New Communications VP. Fannie Mae has hired Duncan Burns as vice president of...
Federal Housing Finance Agency Director Mel Watt has less than 11 months left in his term, but already the speculation has begun regarding who the Trump administration might pick to succeed him.
Risk-sharing transactions from the government-sponsored enterprises are experiencing strong demand at issuance as well as in secondary trading. Officials at Fannie Mae and Freddie Mac note that they’re working on further improvements for the Connecticut Avenue Securities and Structured Agency Credit Risk programs.
A few years back, Pinto and AEI unveiled a new mortgage product called the Wealth Building Home Loan, which was intended to provide an affordable mortgage option for low- and middle-income borrowers.
Mortgage repurchases and indemnifications declined significantly in the fourth quarter of last year, according to a new Inside Mortgage Trends analysis of buyback disclosures filed by Fannie Mae and Freddie Mac. Lenders repurchased $230.4 million of single-family loans from mortgage-backed securities guaranteed by the two government-sponsored enterprises during the fourth quarter. That figure – which includes loans for which lenders indemnified ... [Includes two data charts]
Republicans in Congress are using the potential for administrative reform of the government-sponsored enterprises as leverage in negotiations on housing-finance reform legislation, according to industry observers. Passage of reform legislation involving Fannie Mae and Freddie Mac appears unlikely this year and some investors in the secondary market would prefer to keep things as is.
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