A hearing by a subcommittee of the Senate Committee on Banking, Housing and Urban Affairs turned into a showcase for Sen. Elizabeth Warren, D-MA, to criticize Fannie Mae, Freddie Mac and the Federal Housing Finance Agency. “To be blunt, Fannie and Freddie have put homeownership out of the reach of millions of creditworthy families,” Warren said at a hearing by the Banking Subcommittee on Housing, Transportation and Community Development. She focused on average credit scores for mortgages delivered to the GSEs. “In 2012, the average credit score associated with a mortgage purchased by Fannie or Freddie was over 760,” Warren said. “That is more than 50 points higher than the average credit score associated with the mortgages they purchased back ...
Mortgage industry participants generally think GSE reform is necessary but they don’t support a complete wind-down of Fannie Mae and Freddie Mac, according to a new survey conducted by the Collingwood Group. Some 64.5 percent of 97 respondents said GSE reform is necessary. “Those who want reform say that the GSEs need not serve as a backup guarantor of home mortgages and believe that the government shouldn’t be guaranteeing more than 90 percent of the market,” Collingwood said. “The majority of respondents felt strongly that Fannie Mae and Freddie Mac’s current state is untenable,” Collingwood said. “Interestingly, none of the survey respondents called for a wind-down or elimination of the GSEs.”Those who said GSE reform is not necessary cited ...
Fannie Mae and Freddie Mac are watching with some concern the growing role of nonbank servicers, and their regulator is drafting new standards for these counterparties. “The shift from depository to non-depository servicers poses additional risks to us,” Fannie said in its third-quarter 10-Q filing. “Non-depository servicers may have a greater reliance on third-party sources of liquidity and may, in the event of significant increases in delinquent loan volumes, have less financial capacity to advance funds on our behalf or satisfy repurchase requests or compensatory fee obligations.” The fast growth of many of these nonbank servicers poses “increased operational risk, which could negatively impact their ability to effectively manage their servicing portfolios,” Fannie said. Nonbank servicers – especially “specialty” companies – are ...
The public comment period closed this week on a Federal Housing Finance Agency proposed rule that updates and clarifies the requirements for Federal Home Loan Bank capital stock and capital plans. The proposal is mostly a housekeeping change, shifting regulations from the old Federal Housing Finance Board rulebook to the FHFA. “The proposed rule would not make any substantive changes to these requirements, but would delete certain provisions that applied only to the one-time conversion of bank stock to the new capital structure,” the agency said. None of the FHLBanks commented on the proposal, which would align the rules better with long-standing practices for transactions in FHLBank stock. Most significantly, the proposed rule would add appropriate references to “former members” ...
SEL 2014-15. Dec. 8. Fannie announced expanded loan-to-value ratios for purchase and limited cash-out refinances. The GSE also updated its loan-level price adjustment matrix. The program requires use of Fannie’s Desktop Underwriter version 9.2, which will be implemented over the Dec. 13 weekend. It is available for both MyCommunityMortgage and standard business. For MCM, Fannie now allows borrower reserves to come from gifts. Bulletin 2014-22. Dec. 8. Freddie introduced the Home Possible Advantage product, which allows loan-to-value ratios up to 97 percent under the Home Possible program.The loans can be manually underwritten or processed through Freddie’s Loan Prospector. At least one borrower must get homeownership counseling. The program effective date is March 23, 2015. DU Spring 2015 Update. Dec. 5. ...
The key factor is that some mortgage originators, the megabanks especially, are keeping conventional loans in portfolio that might otherwise be securitized by Fannie and Freddie.
Fannie Mae and Freddie Mac this week officially announced 97 percent loan-to-value ratio programs to a mixed industry response. Fannie’s low-downpayment option will be available through its MyCommunityMortgage program, as well as for refinances and other non-MCM mortgages. Freddie will offer its 3 percent downpayment product as a purchase or no-cash-out refinance in its Home Possible Advantage program. The biggest difference between the two is...
The migration of mortgage servicing rights from “more tightly to less tightly regulated parts of the financial system” should be addressed by regulators, according to the Treasury Department’s Office of Financial Research. The OFR, which was created by the Dodd-Frank Act to serve the Financial Stability Oversight Council, said Basel capital requirements have created incentives for banks to sell MSRs to nonbanks. In its annual report, the OFR cautioned that nonbanks aren’t as well regulated as banks. “Mortgage servicing activity and the accompanying risks appear...
The Obama administration announced increased incentive payments for borrowers in the non-agency Home Affordable Modification Program along with an increase in funds for borrowers that need relocation assistance as part of a short sale or deed-in-lieu of foreclosure. Meanwhile, there are concerns that the HAMP program for mortgages serviced by the government-sponsored enterprises hasn’t been extended to match the non-agency program. The changes to the non-agency HAMP were announced late last week by the Treasury Department and the Department of Housing and Urban Development. HAMP borrowers will be eligible...
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