With Fannie Mae and Freddie Mac doing only surface checks for TRID regulatory compliance and not complete reviews, future credit-risk transfer deals from the two government-sponsored enterprises could be at risk from lender compliance violations, according to Moody’s Investors Service. Numerous challenges have arisen in the non-agency secondary market because of concerns about liability for errors in the new mortgage disclosures. But since TRID became effective on Oct. 3, 2015, Fannie and Freddie are only checking to make sure that the correct forms are being used. This lack of diligence for TRID violations may amount...

More loans securitized by Fannie Mae, Freddie Mac and Ginnie Mae are carrying mortgage insurance, either private MI or coverage through government-insured programs, according to a new Inside Mortgage Trends analysis of mortgage-backed securities data. The trend toward more insured loans has been gradual over the past two years. In 2014, purchase-money loans with no mortgage insurance accounted for 39.9 percent of new MBS issued by ... [Includes one data chart]

Fannie Mae did a slightly better job than Freddie Mac in fending off the seasonal slump in new single-family mortgage business during the first quarter of 2016, according to a new analysis and ranking by Inside The GSEs. A stiff 11.6 percent decline in purchase-mortgage business was the major reason why total GSE production of single-family mortgage-backed securities fell 3.4 percent from the fourth quarter of 2015. Fannie and Freddie securitized $90.18 billion of refinance loans during the first three months of the year, a 1.8 percent uptick. Freddie’s total business was down 4.6 percent from the fourth quarter, while Fannie’s was off 2.5 percent. It was Fannie that boosted its refi production, by 3...

The Federal Housing Finance Agency decided to roll out a principal reduction plan for certain Fannie Mae and Freddie Mac loans as its last post-crisis effort to help struggling borrowers. It estimates that 33,000 homeowners could benefit from the program that will expire at yearend.The plan was given the go-ahead this week by FHFA Director Mel Watt, after a multi-year analysis by the agency. The FHFA said the program will provide seriously delinquent borrowers a final opportunity to address negative equity, avoid foreclosure and help stabilize neighborhoods that have not recovered from the foreclosure crisis. According to a press statement on the effort, only a select group of troubled borrowers will be...

Mortgages produced through lenders’ retail channels accounted for 60.2 percent of home loans securitized by Fannie Mae and Freddie Mac during the first quarter of this year, according to a new Inside Mortgage Trends analysis of mortgage-backed securities data. The retail share was up slightly from 59.9 percent for all of last year and 59.5 percent in the fourth quarter. Sales of retail-originated loans fell 3.9 percent from the previous period, the smallest ... [Includes one data chart]

A recent study by the U.S. Governmental Accountability Office recommended that Congress consider granting the Federal Housing Finance Agency more authority to examine third parties, such as nonbanks, that do business with Fannie Mae and Freddie Mac.Although nonbank servicers are subject to oversight by federal and state regulators and monitoring by Fannie and Freddie, the GAO wants to see greater regulation. It said in light of recent nonbank growth, the FHFA’s indirect oversight of third parties that do business with the GSEs is not enough.“FHFA lacks statutory authority to examine these third parties to identify and address deficiencies that could affect the enterprises.

Lawmakers speaking at the Mortgage Bankers Association’s advocacy conference this week touted the accomplishments of past housing finance reform efforts but agreed more needs to be done to keep the conversation going and come up with a concrete solution. Sen. John Tester, D-MT, said while progress was made with the “Jumpstart GSE Reform Act” introduced by Sens. Bob Corker, R-TN, and Mark Warner, D-VA, reform seems to have dropped off the radar in this election year. “There’s a huge amount of uncertainty across the country,” he said. The Federal Housing Finance Agency is taking many of the steps that were laid out in the Corker/Warner bill, according to Corker, who...

With Fannie Mae and Freddie Mac only checking that the new TRID forms are being used on its loans, a lack of due diligence for completely complying with TRID rules exposes the GSEs’ credit-risk transfers to some incremental losses, according to Moody’s Investors Service.This is especially true for CRTs with an “actual loss” structure, said Moody’s. The rating service added that it will be a credit negative for the transactions since there’s no transparency in how many loans in future GSE-sponsored CRT transactions will contain material TRID violations. In October, the GSEs issued guidance noting that they expect seller/servicers to make good faith efforts to comply with the TRID rule.

Freddie Mac wants to help more borrowers sustain homeownership through counseling. Last week, the GSE invested in a modernized platform to streamline the process and partnered with Hope Loan Port, a nonprofit aimed at sustaining homeownership through its technology solutions. The new platform, available now, will automate several key processes, including collecting, analyzing and reporting client data, assessing client readiness to buy a home, and referring clients who are ready for successful homeownership to lenders, seamlessly. A dedicated software-as-a-service (SaaS) based platform highlights the modernization initiative and will provide the participating Borrower Help Centers with the tools to work with consumers, connect with lenders and share sensitive data securely.

The battle over where to hold court continues with GSE shareholders challenging the Federal Housing Finance Agency’s request to transfer and consolidate the cases. Since the FHFA’s March filing to transfer lawsuits initiated by Fannie Mae and Freddie Mac shareholders to a new court, a number of plaintiffs have filed motions opposing the transfer, arguing that the cases are substantially different from one another. But now, in response to that challenge, lawyers for the FHFA filed a court document on April 13 that said the cases all involve plaintiffs with the same interests asserting the same claims arising out of the same transactions against the same defendants.