Actual GSE sales volume for the top five was down 2.2 percent from the second quarter, but overall Fannie/Freddie business was down slightly more, 3.8 percent.
Wall Street remains concerned about the level of standardization of Fannie Mae and Freddie Mac operations in a single-security environment where investors would be expected to treat them as completely interchangeable. The Structured Finance Industry Group this week reiterated its concern about the Federal Housing Finance Agency’s plan to avoid “complete alignment” of the two government-sponsored enterprises’ operations. In a May 2015 update on the single security, the FHFA said it would carefully assess business decisions that could lead to different prepayment speeds, but that buy-out and removal policies at the two GSEs are essentially the same. That isn’t...
Banks, thrifts and credit unions increased their agency mortgage-backed security issuance by 0.9 percent from the second to the third quarter, while nonbank issuance was down 1.3 percent.
“Greater up-front harmonization of the GSEs’ policies and procedures is not only necessary, but fundamental to the success of the single-security initiative,” according to the Structured Finance Industry Group.
New business in Fannie Mae and Freddie Mac mortgage-backed securities operations fell slightly during the third quarter of 2015, including larger declines among nonbanks and small depository institutions. Fannie and Freddie securitized $223.5 billion of single-family mortgages during the third quarter, a 3.8 percent drop from the previous period, according to a new Inside The GSEs ranking and analysis. Through the first nine months of 2015, GSE MBS issuance was 42.2 percent higher than the same period last year, although the annual total is likely to fall short of the $900 billion mark when the year ends. The nonbank share of GSE business fell slightly from the second quarter, snapping a long period of growth for independent mortgage bankers.
Reforming Fannie Mae and Freddie Mac is likely not in the cards for this Congress. Speaking at a housing finance forum sponsored by the Bipartisan Policy Center in Washington this week, Sen. Bob Corker, R-TN, said he doesn’t expect any changes over the short term. “It’s going to be a while. It’s not going to happen over the next year and four months,” he said. “Both sides don’t want to address a tough issue.” The Republican from Tennessee added that lawmakers from both sides of the aisle are avoiding the issue. Sen. Mark Warner, D-VA, also speaking at the event, said while there may not be any legislation in the near future, he’s hopeful for some type of incremental movement.
Fannie Mae and Freddie Mac released a new policy this week in hopes of providing clarity on correcting loan origination defects and solutions to the mortgage buybacks that have plagued lenders over the years. Based on input from lenders, the GSEs took the next step to lessen loan buyback risk and will now categorize defects in terms of “findings, price-adjusted loans, and significant defects.” Under the new “origination defects and remedies framework,” findings will not require a correction or a remedy from the seller as they are negligible defects that had no effect on whether the loan was acceptable to Fannie or Freddie. Those mortgages with one or more defects that are labeled price-adjusted loans would have been eligible for sale to the GSEs if...
After a long, steady decline in their combined market share, the top five sellers of home mortgages to Fannie Mae and Freddie Mac posted a modest increase during the third quarter of 2015. The top five sellers delivered $67.66 billion of loans to the two government-sponsored enterprises during the period for a 30.3 percent share of the market, according to a new Inside Mortgage Trends analysis. That was up from 29.8 percent in the second quarter and ... [Includes two data charts]
Sellers/servicers of Fannie Mae and Freddie Mac will get a reprieve from immediately meeting the technical requirements associated with the Truth in Lending Act Real Estate Settlement Procedures Act Integrated Mortgage Disclosure Rule that took effect Oct. 3. Just a few days after the rule went into effect both GSEs issued guidance intended to reach anyone concerned about quality- control reviews while lenders absorb TRID into their business routines, said Brad German, spokesman for Freddie. The letter noted that in recognition of some seller/ servicers continuing to work toward implementing technical requirements of the rule, the GSEs won’t conduct routine post-purchase loan file reviews for technical compliance. After a transitional period, however, they will consider whether to begin such reviews for technical compliance.
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