“The exodus of a majority of the pre-crisis nonbank entities within the mortgage arena provides an opportunity for banks to re-establish their position within the mortgage market,” according to regulators in Connecticut.
On the servicing side of the balance sheet, Citigroup reported $180.3 billion in third-party servicing rights, a 2 percent decline from the same period last year.
Correspondents are an especially good source of purchase mortgages. During the third quarter, purchase mortgages accounted for over half (50.5 percent) of correspondent-originated loans securitized by Fannie Mae and Freddie Mac.
Officials at Fannie Mae said they learned from Freddie Mac when structuring their pending risk-sharing transaction, including getting the deal rated. Investors are generally impressed with the transactions and look forward to more. Fannie’s Connecticut Avenue Securities Series 2013-C01 is scheduled to close on Oct. 24, according to a presale report released late last week by Fitch Ratings. The higher of the two tranches offered for sale is set to receive a BBB- rating, the lowest investment grade rating available. Speaking at the ABS East conference produced by Information Management Network this week in Miami, Laurel Davis, a vice president at Fannie Mae, said...
The nation’s top court this week may have sent a subtle hint to the more than dozen big bank defendants being sued by the Federal Housing Finance Agency when it flatly declined to receive their petition to dismiss their cases, notes a legal expert. The 13 financial institutions – including Bank of America, Deutsche Bank, Goldman Sachs and JPMorgan Chase – sought to argue before the Supreme Court of the United States that the FHFA waited too long when it filed suit against the banks in 2011 over non-agency MBS the government-sponsored enterprises purchased prior to the 2008 financial crisis. SCOTUS said...
The most important take away from this week’s loan limit reduction news: Congress warning DeMarco that he’d better defer to them on loan limits. His reply: radio silence. Meanwhile, Wells tosses Freddie overboard, sort of.
The Federal Housing Finance Agency holds the keys to the Fannie Mae/Freddie Mac loan limit kingdom, but it’s giving no clues – or interviews – as to where it’s headed on the issue. Meanwhile, pressure is mounting on the regulator to do nothing. As far as the mortgage industry is concerned, it knows a change is coming and hopes that when FHFA finally lowers the current high-cost limit of $625,500 the implementation date will come deep into the second quarter of 2014, or at the very least, March 31.
SunTrust Banks late this week said it has entered into a $968 million mortgage settlement with the GSEs and the Department of Housing and Urban Development to resolve buyback claims and losses suffered by the FHA. Overall, Fannie Mae will receive $323 million in cash, Freddie Mac $65 million. The payment to Fannie releases the nation’s ninth largest home funder – according to figures compiled by Inside Mortgage Finance – from “certain existing and future repurchase obligations.”
Expect more GSE repurchase settlements in the near future, say industry insiders, following last week’s announcement by Freddie Mac that it scored a trifecta of buyback settlements with three of the country’s biggest financial institutions. Wells Fargo, Citigroup and SunTrust Mortgage will pay a combined $1.3 billion to the GSE and in exchange Freddie will – with some limitations and exclusions – release the companies from certain existing and future loan repurchase obligations for specific populations of loans.
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