Mortgage lenders delivered $47.82 billion of single-family home loans with private mortgage insurance coverage to Fannie Mae and Freddie Mac during the third quarter of 2014, according to a new ranking and analysis by Inside Mortgage Finance. That was up 29.9 percent from the second quarter of this year as the private MIs piggybacked on the surge in purchase-money mortgages securitized by the two government-sponsored enterprises. Private MI coverage was provided on 39.2 percent of purchase loans sold to the GSEs during the third quarter, and the industry has seen its penetration rate of the sector climb steadily. Back in the first quarter of 2013, only 31.3 percent of Fannie/Freddie purchase mortgages had...[Includes two data charts]
Shareholders are appealing a federal judge’s decision last week to toss out their legal challenge to the federal government’s siphoning off of Fannie Mae and Freddie Mac profits, and a legal expert says they could be helped out by what comes out in discovery in other investor lawsuits. Speaking during a conference call sponsored by Investors Unite, New York School of Law Professor Richard Epstein – who does not own stock in the government-sponsored enterprises – blasted the “misguided” ruling by Judge Royce Lamberth of the U.S. District Court for the District of Columbia. He characterized it as an overly generous interpretation of the Housing and Economic Recovery Act of 2008 in favor of the Treasury Department and the Federal Housing Finance Agency. “Although the government claimed to be looking out for the shareholders, it ended up...
Affordable housing advocates are continuing their full-court press against the head of the Federal Housing Finance Agency, demanding that the FHFA greenlight financing for the dormant National Housing Trust Fund after a setback in federal court. U.S. District Court Judge Marcia Cooke of the Southern District of Florida last week dismissed a lawsuit brought by the National Low Income Housing Coalition on the grounds that the NLIHC lacks standing to sue the FHFA. Cooke also found that the court does not have jurisdiction over the decisions of the agency. The coalition filed...
Mortgage underwriting standards are relaxing somewhat, according to a new analysis by Inside Mortgage Finance, particularly as production has shifted from a focus on refinances to purchase mortgages. However, underwriting standards are much more stringent than they were before the financial crisis, with few options available for nonprime borrowers. The average credit score on purchase mortgages included...
Industry experts vary on the question of whether Fannie Mae and Freddie Mac should change their MBS guaranty pricing, but most agree that the Federal Housing Finance Agency should proceed cautiously and deliberately. At the same time, most industry comment letters on the subject agree that more needs to be done to revive the non-agency market. The Securities Industry and Financial Markets Association warned...
Attorneys for disenfranchised GSE shareholders have already filed a notice to appeal this week’s surprise dismissal by a Washington, DC, federal judge of the lawsuits challenging the Treasury Department’s 2012 “net-worth sweep” of nearly all profits generated by Fannie Mae and Freddie Mac. However, a legal expert notes that the ruling by Judge Royce Lamberth of the U.S. District Court for the District of Columbia makes a tall order even taller for investors taking on the government.
Industry observers expect that last week’s announced go-ahead to merge the Federal Home Loan Banks of Des Moines and Seattle will be a “one-off” as the remaining 10 FHLBanks are still in sound enough financial shape. Talk of a proposed merger between the FHLBank of Des Moines and the smaller, troubled FHLBank of Seattle was first made public in July and approved unanimously by both Bank boards last week.
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