Bank of America’s mortgage division posted $297 million in residential income for 3Q compared to $267 million in 2Q and $290 million in the third quarter of last year.
Freddie names NPL winners while Fannie announces another NPL sale. With all Message Manager reports now available on Fannie Mae Connect, the old system is about to sunset. The FHLBanks report on their 2015 low-income housing activity. FHFA tapped into social media for a last-ditch effort to make sure struggling homeowners knew about its principal modification program before deadline passed. Fannie's economists score a repeat award victory. And New York clergy speak out against GSE reform.
In the latest round of housing reform proposals, the Milken Institute recommends the best way forward is to just amend the charters of the GSEs, Federal Housing Finance Agency and Ginnie Mae. This is a different twist on the Urban Institute’s proposal earlier this year, which suggests completely merging Fannie Mae and Freddie Mac into a government corporation that pushes its credit risk into the private market. Authors Michael Bright, director in the Milken Institute’s Center for Financial Markets, and Ed DeMarco, senior fellow at the institute and former FHFA acting director, said those amendment changes include turning the GSEs into mutuals owned and operated by their seller-servicers and making Ginnie Mae a stand-alone government corporation.
Reversing at least temporarily a long-running trend in the mortgage market, the four biggest banks in the U.S. expanded their presence in the GSE single-family market in the third quarter of 2016. Together, Wells Fargo, Chase, Bank of America and Citigroup delivered $61.88 billion of single-family loans into Fannie Mae and Freddie Mac mortgage-backed securities during the third quarter, according to a new Inside The GSEs analysis and ranking. That was up a hefty 45.0 percent from the second quarter, well above the 29.7 percent increase in overall MBS issuance by the two GSEs. The four megabanks, all with over $1 trillion in assets, expanded their combined GSE footprint by 2.2 percent from the second quarter.
The ruling handed down this week that concluded the structure of the Consumer Financial Protection Bureau is unconstitutional has led to industry chatter that the Federal Housing Finance Agency, which is similarly structured, could be more closely examined. In PHH Corp. v. Consumer Financial Protection Bureau, a DC Circuit Court judge found that the bureau’s single-director structure was unconstitutional and dismissed a $109 million penalty against PHH for violations of the Real Estate Settlement Procedures Act. Robert Maddox, financial services litigation attorney with Bradley Arant Boult Cummings LLP, told Inside The GSEs, “While the court did not address the constitutionality of FHFA, the framework of FHFA may possibly lend itself to the same constitutional scrutiny as the CFPB.”
The comment period on credit risk transfers ended Oct. 13 and letters from industry groups have been pouring in this week, with many primarily focusing on the issue of front-end versus back-end credit-risk transfers. While some advocate for more front-end risk- sharing deals, instead of the back-end ones that account for more than 80 percent of CRTs to date, others warned that “winners and losers” should not be picked. Back in June, the FHFA asked for industry feedback on various aspects of its CRT program. It also extended the deadline from August to October because industry stakeholders wanted more time to evaluate the questions raised in the request for input.
Documents revealed to plaintiffs’ attorneys in a prominent GSE shareholder case is causing some to question what President Obama was told about Fannie Mae’s and Freddie Mac’s profitability when the Treasury sweep took place in 2012. Judge Margaret Sweeney released her 80-page opinion last week and it gave more insight into her decision. While only a short summary sentence of each of the 56 documents is available now, it does show communication between high-level officials at the Treasury Department, Federal Housing Finance Agency and the White House regarding the Treasury’s sweep of Fannie and Freddie profits.Investors Unite, a GSE shareholder group, noted that the government might have been trying to keep the documents hidden because...
Fannie Mae and Freddie Mac securities remained the preferred investment choice of the 11 Federal Home Loan Banks during the first half of 2016, according to a new ranking by Inside The GSEs based on data from the Federal Housing Finance Agency. GSE MBS accounted for $110.6 million of the total $138.4 million in business. There was a 2.0 percent quarterly increase from the first to the second quarter. GSE MBS accounted for 79.9 percent of combined MBS portfolios. The FHFA data does not separately break out Fannie and Freddie volume or share.
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