There is little to no chance of legislative GSE reform occurring until at least 2016, so market participants should plan accordingly, predicted a report issued last week. Despite two separate bills awaiting a floor vote in both the House and Senate, Kroll Bond Rating Agency said there’s little chance housing reform legislation will garner enough support to pass until after the next presidential election.
Fannie, Freddie Subprime Holdings Continue to Run Off. The GSEs’ holdings of nonprime mortgages continue to decline, largely due to runoff, according to a new analysis by Inside Nonconforming Markets, an affiliated publication. Fannie Mae and Freddie Mac held a combined $252.2 billion of Alt A and subprime mortgage assets at the end of the second quarter, down 18.3 percent from 2Q13. Purchased/guaranteed mortgages account for 71.9 percent of the holdings, with the rest of the GSEs’ nonprime exposure in non-agency mortgage-backed securities.
Fannie Mae and Freddie Mac in July posted a combined increase in the volume of single-family mortgages they securitized, according to a new Inside The GSEs analysis.Fannie and Freddie issued $57.9 billion in single-family mortgage-backed securities in July, a 12.3 percent increase from June. However, July’s MBS issuance was down 59.0 percent on a year-to-date basis.
Fannie and Freddie held a combined $252 billion in Alt A and subprime mortgage assets at the end of June, down 18.3 percent from the second quarter of 2013.
Many banks are beginning to shy away from the product as the Inspector General of the Department of Housing and Urban Development and Justice Department take banks to task for underwriting flaws.
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