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.
Examiners did not meet the requirements for making sure that one of the GSEs corrects serious deficiencies, according to the Federal Housing Finance Agency’s Office of Inspector General. In a recent report, the OIG said that there were certain instances where FHFA’s guidance “fell short.” The report noted that when the OIG reviewed whether examiners followed FHFA policy regarding an issue opened by a GSE in 2013, 30 months later the Matter Requiring Attention (MRA) remained unresolved. Among the shortcomings identified were the examiner’s acceptance of the GSE’s proposed remediation plan despite the fact it failed to address all of the issues in the division of enterprise regulation and not preparing an internal procedures plan to...
Fannie Mae and Freddie Mac mortgage-backed securities remained the preferred investment choice of the 11 Federal Home Loan Banks during the fourth quarter of 2015 and for the year, according to a new ranking by Inside The GSEs based on data from the Federal Housing Finance Agency. There was a slight 0.9 percent quarterly decline, but a generous 34.7 percent increase from a year earlier. GSE MBS accounted for 77.9 percent of combined MBS portfolios. The FHFA data does not separately break out Fannie and Freddie volume or share.Meanwhile, Ginnie Mae investments accounted for 11.7 percent and non-agency investments were 10.4 percent.
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