Fannie Mae and Freddie Mac are not conducting loan-level reviews for compliance with the CFPB’s integrated disclosure, and that threatens investors in the pair’s future credit-risk transfer transactions with the possibility of some modest losses because of lender compliance violations, according to a recent report from Moody’s Investor Service. “We expect overall losses on these transactions owing to TRID violations to be fairly small, despite our expectations that the frequency of violations will be high, at least initially,” analysts at the rating service said. “Furthermore, lender representations and warranties and the government-sponsored enterprises’ ability to remove defective loans from the transactions will likely mitigate some of these losses.” Damages for TRID violations are less significant for a securitization transaction compared ...

In another sign that the mortgage market continues to heal, consumer complaints to the CFPB about their residential mortgages continued to fall broadly during the first quarter and on an annual basis, according to a new ranking and analysis by Inside the CFPB. The latest data from the bureau’s consumer complaint database show that total gripes about mortgages are down 6.7 percent from the fourth quarter, and off 4.1 percent from year-ago levels. Borrower kvetching about loan modification issues was even better, down 9.8 percent and 13.9 percent, respectively, for the two periods...

This week, a judge removed the protective order on seven documents related to the U.S. Treasury’s sweep of GSE profits, revealing what shareholders and industry groups have been arguing for years: that Fannie Mae and Freddie Mac were in a position to post profits on a sustained basis. In a whirlwind of court activity over the past month involving GSE shareholders, Court of Federal Claims Judge Margaret Sweeney decided on April 12 to release certain documents that appellants in Fairholme Funds, Inc. et. al. v. United States and Perry Capital v. Lew, moved to be made public. This is ahead of the D.C. Circuit schedule oral argument for the Perry case on April 15 and it intensified talks of government corruption and false claims of protecting taxpayers via the sweep.

The Department of Justice helped lead other federal and state entities in a $5.06 billion settlement with Goldman Sachs. The settlement announced this week involves non-agency MBS underwritten by Goldman between 2005 and 2007. The charges were centered on representations made by Goldman to investors in about 530 non-agency MBS. The offering documents for the MBS stated that mortgages in the deals were originated “generally in accordance with the loan originator’s underwriting guidelines,” other than possible situations where “when the originator identified ‘compensating factors’ at the time of origination.” Findings by third-party due diligence firms helped...

The Federal Housing Finance Agency this week announced a limited principal reduction option for certain nonperforming, underwater borrowers with Fannie Mae or Freddie Mac home mortgages. The agency characterized the program as the “final crisis-era modification program [and] a last chance for seriously delinquent underwater borrowers to avoid foreclosure.” The program is limited...

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]