Fannie Mae and Freddie Mac are soliciting industry feedback on a proposal designed to make their mainstay credit-risk transfer deals more accessible for real estate investment trusts and, to a lesser extent, overseas investors. REITs have nibbled at the CRT debt notes issued by the two government-sponsored enterprises over the past few years, but restrictions on their holdings of so-called non-REIT assets have limited their involvement. The GSEs, with the backing of the Federal Housing Finance Agency, have come up...

Federal Housing Finance Agency Director Mel Watt is prepared to allow Fannie Mae and Freddie Mac to build some type of capital buffer to avoid a Treasury draw that could weaken investor confidence. But some lawmakers vehemently disagreed with his views during a hearing in the Senate Banking, Housing and Urban Affairs Committee this week. Watt reiterated his concern about the declining capital buffer, which is scheduled to reach zero by 2018 under the preferred stock purchase agreements that set the terms of the conservatorships of the two government-sponsored enterprises. With no capital buffer, Fannie and Freddie would be forced...

Fannie Mae and Freddie Mac continued to shrink their retained investment portfolios in the first quarter of this year by focusing on paring their MBS holdings. The two government-sponsored enterprises held a combined $560.04 billion in their retained mortgage portfolios at the end of March. That was down 1.9 percent from the previous period and 16.7 percent below year-ago levels. At their current pace, Fannie and Freddie are...[Includes one data table]

Nonprime mortgages held by the government-sponsored enterprises continued a gradual decline in the first quarter of 2017, according to an analysis by Inside Nonconforming Markets. Fannie Mae and Freddie Mac held nonprime mortgages with a total unpaid principal balance of $133.89 billion at the end of the quarter, down 5.3 percent from the end of 2016 and down 22.1 percent from the first quarter of last year. The holdings are largely ... [Includes one data chart]

A former Congressman, Watt knows full well that by allowing Fannie and Freddie to build capital once again it will set off a political firestorm...

The key factor for the greater MI penetration was the relatively stronger performance of purchase-mortgage lending compared to refinance activity…

Overall, Arch MI wrote coverage on $12.66 billion of home mortgages in the first quarter, of which 81.9 percent were monthly premium policies…

During the hearing Thursday, Sen. Bob Corker, R-TN, called “the whole issue of them running out of resources” baseless.

Federal Housing Finance Director Mel Watt this week expressed strong reluctance to allow Fannie Mae and Freddie Mac to be forced to take another draw on their Treasury line of credit. “FHFA has explicit statutory obligations to ensure that each enterprise ‘operates in a safe and sound manner’ and fosters ‘liquid, efficient, competitive and resilient national housing finance markets,’” Watt testified in a hearing at the Senate Banking, Housing and Urban Development Committee. “To ensure that we meet these obligations, we cannot risk...

BlackRock this week joined with most other industry participants recommending that housing-finance reform include an explicit government guarantee for mortgage-backed securities backed by conventional home loans. The asset manager also highlighted the need to respect the rights of investors, ensure fungibility of the existing government-sponsored enterprise MBS in any new system and provide transparency at all levels. “This includes transparency regarding loan origination, securitization, and access to the secondary market,” said BlackRock. “We believe the role of Fannie Mae and Freddie Mac as they exit conservatorship should be clearly defined in any new housing finance system.” The firm suggested...