The hedging results of Fannie Mae and Freddie Mac – including instruments bought to protect the value of agency MBS – had different results in the third quarter as interest rates unexpectedly declined and stayed low for several weeks. Overall, Fannie booked $2.6 billion of negative charges against the value of its derivatives in the third quarter while Freddie booked a much larger charge on its hedging activities: $4.2 billion. The differential did not pass...
The authors want the Treasury Department to end the quarterly profit sweep and allow Fannie and Freddie to raise about $100 billion in additional capital through several rounds of new common stock sales...
The Securities Industry and Financial Markets Association recently filed an amicus brief in support of the defendants to reverse a case in which the Federal Housing Finance Agency argued that Nomura Holdings sold shoddy MBS to Fannie Mae and Freddie Mac. In the case of FHFA vs. Nomura Holdings, a judge ruled in May, after a three-week bench trial, that Nomura and RBS Securities were liable for the claims brought by the FHFA and knowingly sold bad MBS to the government-sponsored enterprises before the 2008 financial crisis. The MBS were backed by mortgages with an unpaid principal balance of about $2.05 billion at the time of purchase. Nomura appealed...
The Federal Home Loan Banks appear to be eyeing a bigger share of the government-backed lending market with the announcement of a new servicing-release option for FHA, VA and rural housing loans sold into the Mortgage Partnership Finance program. The addition of a servicing-released option from Nationstar Mortgage, a top-10 mortgage servicer, to an already existing servicing-retained execution will give participating lenders greater flexibility in pricing and selling government-backed mortgages they have originated into the secondary market, said Matt Feldman, president of the Chicago FHLB. Previously, program participants were required...
Federal regulators late last month rejected industry requests that swap agreements entered into by securitization vehicles be exempt from new capital and margin requirements. The three federal banking regulators, along with the Federal Housing Finance Agency, finalized a rule that requires covered swap entities to collect and post initial margin to counterparties that are swap entities or financial end users with material swaps exposure of $8 billion or more. The Structured Finance Industry Group had argued...
The Federal Housing Finance Agency probably won’t increase the baseline conforming loan limit in 2016, according to industry analysts. The baseline conforming loan limit of $417,000 hasn’t increased since 2006 as home prices declined significantly shortly thereafter. The FHFA will use its seasonally-adjusted “expanded data” house-price index to set loan limits for the government-sponsored enterprises in 2016. The loan limits are expected to be published ...
The nonprime mortgages held by the government-sponsored enterprises continued a steady decline in the third quarter of 2015, according to a new analysis by Inside Nonconforming Markets. Fannie Mae and Freddie Mac held a combined $153.22 billion in purchased/guaranteed nonprime mortgages as of the end of the third quarter of 2015, according to estimates by Inside Nonconforming Markets. The holdings declined by 3.7 percent ... [Includes one data chart]
Facing the possibility of a potential False Claims Act lawsuit, PHH Corp. is reconsidering its participation in the FHA mortgage insurance program. Though PHH’s FHA segment represents only 3 percent of its mortgage volume over the past 12 months, the company will proceed cautiously as it evaluates the risk-adjusted return of FHA products and programs, said Glenn Messina, PHH president and chief executive.Ranked 50th among FHA lenders as of June 30, 2015, PHH expects more regulatory challenges in 2016 as well as rising compliance costs, said Messina during a third-quarter earnings call. In its latest quarterly filing, PHH disclosed receiving a subpoena from the inspector general of the Department of Housing and Urban Development for documents related to, among other things, FHA loan origination and underwriting practices. Like several other FHA lenders, PHH is ...
The Federal Home Loan Bank System is seeking to boost its share of government-backed lending and the Ginnie Mae market with a new servicing-release option for FHA, VA and rural housing mortgages that are sold into the Mortgage Partnership Finance program. The new feature adds to an existing servicing-retained execution in the MPF Government Mortgage-Backed Securities program. The current servicing-retained component requires participating lenders to service loans they originate and sell into the MPF conduit. The servicing-release option from Nationstar Mortgage, a top-10 mortgage servicer based in Dallas, will provide lenders with greater pricing flexibility so they can become more competitive in the communities they serve, said Matt Feldman, president of the Chicago FHLB. Only FHLBank members that are participants in MPF can use the government MBS program. In order to ...
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