The Federal Housing Finance Agency settled $10.3 billion in legal claims in 2014 stemming from 11 non-agency MBS issues that go as far back as 10 years ago, noted the FHFA’s annual report to Congress released this week. These lawsuits were filed in 2011 against financial institutions along with some of their executive management including officers and directors. The suits alleged violations of federal securities laws and state laws in the sale of the non-agency MBS to Fannie Mae and Freddie Mac that took place in a two-year period during the housing downturn between 2005 and 2007. A number of issues contributed...[Includes one data table]
Freddie Mac announced its fifth Structured Agency Credit Risk debt note offering in 2015 this week. This $950 million offering comes on the heels of last week’s STACR offering of $425.6 million, which was the first transaction under a new structure that shares a reference pool of loans with a previous transaction.Last week’s STACR Series 2015-HQ2 has a reference pool of single-family mortgages with an unpaid principal balance of more than $30.3 billion. Freddie said the reference pool consists of a subset of 30-year fixed-rate single-family mortgages acquired by Freddie in the first through third quarters of 2013 with loan-to-value ratios from 80 to 95 percent. Analysts from Moody’s Investors Service said Freddie used part of its 58 percent....
Contributing Treasury’s warrants for common stock of Fannie Mae and Freddie Mac to the affordable housing funds is one of the ways that the Leadership Conference on Civil and Human Rights says the GSEs can help earmark financial resources toward affordable housing. In a June report published by the Leadership Conference, the organization offered a few of its housing finance recommendations to support affordable housing goals. The report noted that often lost in public discussion of the GSE conservatorships is the fact that the Treasury owns warrants for 79.9 percent of the common stock of both Fannie and Freddie. “The value of the warrants could easily exceed $100 billion,” the group said in its recommendation.
An estimated $95.9 billion of mortgages bigger than the traditional agency loan limit were produced during the first quarter of 2015, a new Inside Mortgage Finance analysis reveals. Jumbo production – all single-unit mortgages with loan amounts exceeding $417,000 – was up 7.9 percent from the fourth quarter. That was slightly off the pace set in overall mortgage originations, which rose 12.9 percent from the previous quarter. Conforming-jumbo production was...[Includes three data tables]
Lenders have loosened downpayment requirements on conforming purchase-mortgages as part of a shift that typically occurs when the purchase market rebounds. The move toward higher loan-to-value ratios on purchase mortgages has been gradual, but industry analysts suggest it’s part of an effort by lenders to increase volume. “As lenders need more mortgage volume, average downpayments start to drop,” said Doug Lebda, CEO of LendingTree. “More lenders are beginning to loosen their guidelines and are going after a slightly broader pool of potential borrowers.” According to the Inside Mortgage Finance MBS Database, the original LTV ratio for newly originated purchase mortgages included in mortgage-backed securities issued by the government-sponsored enterprises has...
Although the negative-equity rate declined in the first quarter, more than half of underwater homeowners are far from recovering. A recent report shows more than 4 million homeowners had mortgages that were at least 20 percent more than their home’s value. With little to no chance of homes appreciating by 20 percent anytime soon, those owners would struggle to break even on a sale. This is...
The only thing that kept the qualified-mortgage rule from devastating mortgage production was the temporary loophole that allows Fannie Mae, Freddie Mac and the government-insurance programs to treat loans with debt-to-income ratios above 43 percent as QMs, an industry official said. “Many have referred to QM as the Y2K moment for mortgages: nothing happened. We all thought this thing was going to implode. And yet there wasn’t too much of a glitch,” said Rod Alba, senior regulatory counsel at the American Bankers Association, during the ABA’s annual regulatory compliance conference in Washington, DC, this week. “At the macro level, that’s...
Wells Fargo and JPMorgan Chase posted strong gains in first-lien holdings during the first quarter, and they were the biggest jumbo mortgage originators during that period.
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