Capital matters, according to Fannie Mae CEO Timothy Mayoupolos, who reflected on lessons learned during the crisis. In a recent speech in Washington, he noted that while Fannie was meeting its statutory capital requirements heading into the crisis, it was clearly not enough to weather the storm. “We are a mono-line company. We are restricted in diversifying our business,” he said. “So any broad disruption in housing was going to affect us. And it did,” he said, recounting the growing number of default borrowers during that time. Although he stopped short of commenting on what amount the GSEs should be recapitalized at, he did say that there is not enough capital today.

Rep. Mike Capuano, D-MA, wants the Federal Housing Finance Agency and Treasury Department to re-examine the policy that prevents Fannie Mae and Freddie Mac from building capital to avoid disrupting affordable housing initiatives.Before being placed into conservatorship, Fannie and Freddie were equipped to invest in affordable housing and underserved markets, he said, adding that in today’s environment, the underserved markets will suffer the most from the net worth sweep. Capuano wrote in a letter to the agencies that the lack of stability and strength caused by eliminating the GSEs’ capital buffer has “particularly serious consequences” for the residents of underserved markets across the country.

Returning to the “originate-and-hold model” or replacing the GSEs with a financial market utility are a couple of the ideas being floated around in two recent essays published on the Housing Finance Policy Center’s new Housing Finance Reform Incubator. Patricia Moser, director of a new initiative on central banking and financial policy at Columbia University, said that the proposed utility would be a regulated private firm mutually owned by lenders, focused exclusively on securitization of standardized residential mortgages. “The utility pools mortgages into pass-through securities and provides a credit guarantee,” she said, adding that it would allow mortgage credit markets to function or restart even in times of market,,,

There were just two comments regarding the Federal Housing Finance Agency’s American Survey of Mortgage Borrowers and both were generally supportive but suggested ways to enhance the survey’s usefulness. The FHFA issued a request for comment last month about the proposed survey to collect information from borrowers. The information will be used in a report highlighting the GSEs’ mortgage activities. The comment period closed this week. The National Association of Home Builders said the practical utility of information collected by the ASMB is clear and will allow for a more in-depth analysis of the mortgage market. While some argue that the information collected is duplicative of other available data, the...

The Federal Housing Finance Agency issued guidance stating that a Federal Home Loan Bank can make changes to a previously approved internal market risk model only after properly notifying FHFA. Each of the model change notifications should include the signatures of a bank officer and be sent to the manager, risk model branch, FHFA division of regulation. Depending on the conditions, whether or not the model plans to supplement or replace another model, the FHFA can be notified in one of two ways. When implementing a significant model change without replacing an existing market risk model, the bank must meet four conditions.

Freddie Sets Date for First Quarter Results. Freddie Mac announced that it plans to report its first quarter 2016 financial results before the U.S. financial markets open on Tuesday, May 3, 2016. Fannie Completes 10th CIRT Transaction to Date. Fannie Mae completed its latest Credit Insurance Risk Transfer transaction last week and it’s 10th deal since the program’s inception in 2013. This deal, CIRT 2016-3, shifts a portion of the credit risk on a pool of single-family loans with an unpaid principal balance of approximately $5.7 billion to a single insurer. The covered loan pool consists of 30-year fixed- rate loans with...

Quicken Loans, for example, reported a 4.9 percent increase in total originations compared to 4Q15. An estimated 81.0 percent of the nonbank’s production in 2015 was refinance loans…

Molly Boesel, a senior economist at CoreLogic, noted that in judicial states, servicers must provide evidence of delinquency to the courts in order to move a borrower into foreclosure.

The publicly traded servicer/originator took in $330.7 million in revenue, a 35.2 percent decline from 1Q15. Its origination revenue was a meager $23.2 million…

Underserved markets will suffer by not allowing Fannie Mae and Freddie Mac to retain capital, according to Rep. Mike Capuano, D-MA, who urged the Federal Housing Finance Agency and Treasury Department to re-examine the terms of their conservatorship. Under the current plan, the government-sponsored enterprises are not allowed to build capital and by January 2018 their reserves are expected to be wound down to zero. Capuano said...