CFPB Director Richard Cordray appeared before credit union representatives recently and touted the performance of their industry’s mortgage operations under the bureau’s mortgage rules. “Our first set of mortgage rules have been in place for over two and a half years, and we are seeing great progress,” Cordray told the National Association of Federal Credit Unions. “In 2014, the first year of our ability-to-repay rule on mortgage origination, owner-occupied home purchase mortgages increased by 4 percent, according to HMDA data, and growth was even stronger last year: home purchase mortgages increased by an estimated 13 percent to 14 percent.” In fact, as it turns out, the mortgage industry overall actually did slightly better than Cordray said. According to analysis of ...
“We hope that you will help us to push back on current efforts to gift the proprietary infrastructure of Fannie Mae and Freddie Mac to the big banks,” the clergymen write.
The Federal Housing Finance Agency recently redrafted the proposed indemnification payments rule to make it easier to understand. The proposed rule looks to replace a provision concerning indemnification payments by regulated entities in conservatorship with one that clearly states that the regulation does not apply to such entities. This issue has been brewing since 2008 when the FHFA published an interim final rule on severance agreements and indemnification payments. It then re-proposed the proposed amendment on indemnification payments in 2009. Now the agency said it wants to clarify the fact that it does not consider indemnification payments to be subject to FHFA rules and procedures related to compensation.
Roughly a quarter of the single-family business that passed through Fannie Mae and Freddie Mac during the first half of 2016 resulted from special treatment bestowed on the GSEs following the housing market collapse. The biggest factor is the so-called GSE patch, which exempts Fannie and Freddie from underwriting restrictions on “qualified mortgages” that are part of the ability-to-repay rule promulgated by the Consumer Financial Protection Bureau. For mortgages to get QM status, the debt-to-income ratio has to be 43 percent or less. However, the CFPB rule waives that requirement for Fannie and Freddie as long as they remain in conservatorship, up to a point.
The Federal Housing Finance Agency ordered Fannie Mae and Freddie Mac to require minimum guaranty fees on their mortgage-backed securities because of concerns about buying market share through pricing. The GSEs were required to charge the same “minimum” guaranty fee for single-family guaranty commitments issued on or after Aug. 1. For 30-year mortgages, the minimum fee is 44 basis points, and it’s 30 bps for 15-year loans, according to documents obtained by Inside MBS & ABS, an affiliated newsletter, under the Freedom of Information Act. The minimum g-fees apply only to Fannie and Freddie swap business and not their cash windows. Inside MBS & ABS estimated that roughly 60 percent of single-family MBS issuance is through swaps.
Fannie Mae’s implementation of its updated loan origination tool, Desktop Underwriter 10.0, this week, represents the first widespread use of trended credit data in the mortgage industry and mortgage bankers are optimistic. It was one of the most anticipated changes in the rollout and was designed to give lenders a better understanding of a potential borrower’s creditworthiness...
The Federal Housing Finance Agency’s risk assessments were not a proper follow-up to targeted risk, according to the FHFA’s Office of the Inspector General. The IG noted that between 2012 and 2015, the examiners’ assessments often had little to do with the high-priority risk they are supposed to be supervising. …
The third quarter is about to end and most GSE watchers can agree on one thing: Fannie Mae and Freddie Mac should turn in stellar earnings for the period. According to preliminary estimates from Inside The GSEs, all lenders could wind up funding $570 billion in 3Q, compared to $510 billion and $380 billion in 2Q and 1Q, respectively. The higher production figures should translate into a jump in guaranty fee income, which will feed the coffers of the GSEs. The “wild card” in their performance will be the yield on the 10-year Treasury, which was slated to close 3Q16 at 1.57 percent, 9 basis points higher than June 30.
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