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.
Pete Carroll, an executive at CoreLogic, noted that many Democrats in Congress will not support a housing finance reform bill unless such provisions are included.
In January, the government-sponsored enterprises and Ginnie placed their guarantees on $102.48 billion of new single-family MBS, a modest 6.9 percent decline from December.
FHA and VA single-family originations fell in the fourth quarter of 2017 due to a decline in purchase mortgage originations that was offset somewhat by an increase in refinance business. FHA endorsed $237.3 billion in forward single-family mortgages in 2017 notwithstanding an 11.9 percent drop in the fourth quarter. FHA production also dropped 7.1 percent year-over-year. Market observers attributed the decline in FHA originations to high mortgage insurance premiums, stiffer competition from private lenders’ low-downpayment programs, and a more aggressive conventional-conforming mortgage market. A new analysis by Inside Mortgage Finance also found that government-backed lending and the jumbo market saw the biggest production declines from the prior quarter. In particular, IMF’s research found that FHA, VA and U.S. Department of Agriculture rural-housing originations fell ... [Charts]
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