Mortgage lenders continue to face persistent repurchase demands from Fannie Mae and Freddie Mac, but a growing share of them end up being withdrawn, according to a new Inside Mortgage Trends analysis of disclosures made by the two government-sponsored enterprises. During the first quarter of 2016, lenders repurchased or replaced $315.0 million of mortgage loans for breaches of representations and warranties. That was a record low for ... [Includes two data charts]
The chance of Fannie Mae/Freddie Mac reform legislation passing Congress this year is virtually nil. But that hasn’t stopped industry trade groups from talking about the topic, or dispensing a barrage of advice for the Federal Housing Finance Agency about the withering capital cushions at Fannie and Freddie. The way things stand today, the largest industry trade organizations – and arguably the most powerful politically – are taking the position of “all or nothing” mortgage-finance ...
Housing industry trade groups and other interests joined forces this week in urging the Federal Housing Finance Agency to lower GSE guaranty fees. Fannie Mae and Freddie Mac are no longer exposed to the credit risk they were at the height of the crisis in 2008, they said in a letter to FHFA Director Mel Watt. The June 22 letter was signed by 25 organizations, including the Consumer Mortgage Coalition, Mortgage Bankers Association and U.S. Mortgage Insurers. It not only called for lower g-fees but also said loan-level price adjustments need to be reduced or eliminated. The groups argue that both fees prevent qualified borrowers from entering the housing market.
The latest white paper on housing finance reform details the governance and capitalization plan of a proposal that replaces the GSEs with a new government corporation. But smaller lenders are still uncertain what their role would be in the plan.In what can be dubbed as part two to the white paper, “A More Promising Road to GSE Reform,” published by the Urban Institute, the authors more closely examine their proposed National Mortgage Reinsurance Corp.The NMRC would take over the assets of Fannie Mae and Freddie Mac going forward, and would transfer all of the “non-catastrophic” risk on future mortgage-backed securities to the private market.
While Fannie Mae scrapped its plans to roll out Desktop Underwriter 10.0 the last weekend in June, Freddie Mac forges ahead with plans for its July 11 release date of Loan Advisor Suite. Fannie and Freddie have both been preparing for big updates to their loan origination tools this year. However, Fannie delayed its June 25 rollout by three months and this week scheduled to release DU 10.0 the week of Sept. 25. Freddie’s Loan Advisor Suite is actually the next generation of Loan Prospector, which it named Loan Product Advisor. The GSE recently reminded its customers of the upcoming change and offered tips on how to prepare for it.
The White House is blocking the release of years- old memos and emails surrounding the Treasury sweep of GSE profits. This month, it formally invoked presidential communication privilege over four documents specifically. But some wonder if it’s just to avoid embarrassment.These particular documents represent communication between former National Economic Council members Brian Deese, Gene Sperling and Jim Parrott. And this is in addition to documents the Treasury has already protected under other executive privilege claims. A judge in the Fairholme Funds, Inc. et. al v. the United States case requested on May 27 that the court view the draft memos and emails. One of the documents is a draft memorandum from...
Fannie Mae and Freddie Mac have now sold credit risk on more than $1 trillion in unpaid balances of single-family mortgages combined. As of the second quarter, Freddie sold slightly more and transferred the risk on $552.7 million, and Fannie sold $550.1 billion. In the second quarter, Freddie’s credit risk transfer transactions amounted to $75.6 million, an increase from $53.7 billion in the first quarter but less than the $98.0 billion transferred in the second quarter of 2015. Fannie transferred the risk on $37.3 billion in the first quarter, down from the $65.9 billion the previous quarter and $46.2 billion a year earlier.
Examiners raised several issues in the Federal Housing Finance Agency’s annual report to Congress detailing the work of Fannie Mae, Freddie Mac and the Federal Home Loan Banks.One critical issue in the report, released last week, was the GSEs’ inability to build capital. Examiners said income reductions from shrinking portfolios, coupled with decreases in income from reserve releases and legal settlements and market-to-market volatility from their derivatives portfolio all increase the likelihood of negative net worth in future quarters. Moreover, the examiners said credit-risk transfer initiatives also impose costs that will reduce the GSEs’ earnings. Fannie’s problem assets continued to decline in 2015, but the examiners...
Freddie Completes $706 Million NPL Sale. Freddie Mac announced this week that it sold a large chunk of a $706 million deeply delinquent loan portfolio to Lone Star Funds’ LSF9 Mortgage Holdings. LSF9 was the winning bidder on four pools and Upland Mortgage Acquisition Company II won one. In total, 2,879 mortgage loans were offered through five separate mortgage pools. The loans have been delinquent for an average of approximately five years. As the company continues to trim its retained portfolio, the new sale marks the GSE’s third nonperforming loan auction of the year. The first was a $1.4 billion sale in March, followed by a $130 million transaction in June. Fannie Announces Latest NPL Sale. Last week Fannie Mae announced its latest sale of non-performing loans, including...
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