The Federal Housing Finance Agency and other government regulators could “permanently enshrine” Fannie Mae, Freddie Mac and other government housing entities “as the only large-scale source of mortgage credit in our country” if they fail to design a new mortgage rule with care, says one senior Republican senator. Sen. Bob Corker, R-TN, a member of the Senate Banking, Housing and Urban Affairs Committee, in a letter last week urged federal regulators to “simplify and synchronize underwriting standards for new mortgage lending rules to avoid permanently regulating the private sector out of the housing finance business.” Corker, in his letter to the FHFA, Federal Reserve, Department of Housing and Urban Development, and the Securities and Exchange Commission, among other agencies, noted that the proposed, but yet to be finalized, “qualified residential mortgage” rule exempts loans sold to Fannie, Freddie and the Federal Housing Administration.
Fannie Mae and Freddie Mac dominated the residential mortgage market to a greater degree in 2012 than the GSEs ever had before, according to a new Inside The GSEs analysis. Fannie and Freddie issued a whopping $1.675 trillion of new single-family mortgage-backed securities last year, which equaled 75.7 percent of total market production. That was up from 72.1 percent in 2011 and just shy of the record 77.0 percent the GSEs recorded back in 2008. It was also the biggest annual output since 2009, when Fannie and Freddie issued $1.776 trillion in new MBS. Although part of the increase in GSE share of new MBS issuance last year resulted from the rapid growth of the Home Affordable Refinance Program, their peak market share for the year came early, during the first quarter. HARP activity was heaviest during the second and third quarters.
The White House is expected to eventually pick a permanent director for the Federal Housing Finance Agency, and according to industry officials who claim to be in the know, at least three candidates are still in the running, including Shekar Narasimhan, managing partner at Beekman Advisors. Other possibilities include current Ginnie Mae President Ted Tozer, and Michael Stegman, a senior housing advisor at the Treasury Department. Stegman late last year authored an in-house Treasury document addressing the future of the GSEs, a paper that has yet to see the light of day.
A senior House Democrat has again filed legislation seeking a Congressional investigation of Fannie Mae’s and Freddie Mac’s past and present management and decision making authority.Filed by Rep. Marcy Kaptur, D-OH, in mid-January, H.R. 234, The Fannie Mae and Freddie Mac Investigative Commission Act, would empower a Congressional body to “investigate the policies and practices engaged in by officers and directors at Fannie Mae and Freddie Mac responsible for making the decisions that led to the enterprises' financial instability and the subsequent Federal conservatorship” of the two GSEs. The Fannie Mae and Freddie Mac Investigative Commission would be composed of eight lawmakers – appointed by House and Senate leaders from both political parties – to examine the practices, decisions and policies of the two GSEs that affect the financial stability of the mortgage firms.
One after another, it appears that residential lenders are dipping their toes back into the correspondent lending channel, thanks in part to the fat profit margins tied to securitization and retaining the underlying servicing rights. Over the past few weeks, a handful of lenders announced their intention to either launch a correspondent lending division or jumbo conduit. Firms entering the correspondent space include Envoy Mortgage and Real Estate Mortgage Network. The conduit ... [Includes one data chart]
The government-sponsored enterprises’ share of purchase-mortgage originations has increased each of the last two years, according to a new analysis by Inside Mortgage Trends. The shift in market share includes decreased purchase-mortgage originations for the FHA and a lack of housing inventory, prompting increased home prices. Some $377.2 billion in agency purchase mortgages were originated in 2012, with a 66.5 percent share for Fannie Mae and Freddie Mac combined. In 2010, the GSEs ... [Includes one data chart]
Mortgage lenders funded $232.69 billion worth of FHA loans in 2012, a 22 percent jump from the year prior, according to exclusive loan-level data compiled by Inside FHA Lending.
A large and potentially lucrative RFP issued several months ago by FHFA regarding its strategic plan for taking the GSEs to the next stage in their evolution has yet to be awarded.
An Obama administration official stressed that the White House is working to craft a comprehensive plan for housing finance reform but wants input from industry participants.tasked with crafting a plan to reform the government-sponsored enterprises provided a strong response yesterday to criticism of the White House’s lack of progress on GSE reform.
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