Participants in the non-agency mortgage-backed security market are largely opposed to the Federal Housing Finance Agency’s proposal to create a platform to issue standardized non-agency MBS. While the FHFA suggested that the platform could revive the non-agency market, industry participants suggest that many issues besides a platform are hindering non-agency MBS issuance. “Key elements of the platform that are advantages for government-sponsored enterprise securitizations, such as standardization ...

Nonprime mortgages and mortgage-backed securities caused a significant portion of the losses suffered by the government-sponsored enterprises since 2008. However, the nonprime assets that the GSEs have held on to have seen lower credit losses and even profits recently due to improving home prices and investor demand for vintage MBS. Fannie Mae and Freddie Mac have allowed their non-prime exposure to run off since 2008, rather than selling the assets. As of the end of the third quarter of 2012 ... [Includes one data chart]

The mortgage banking industry is urging Congress to reject the FHA’s call to eliminate the existing “knew or should have known” standard in the National Housing Act in connection with an agency proposal to extend indemnification authority to all direct-endorsement lenders. Both proposals are part of legislative and administrative measures sought by the FHA to strengthen its capability to manage risk and protect its Mutual Mortgage Insurance Fund. A recent independent actuarial review of the fund found that in FY 2012 the economic value of the FHA’s single-family portfolio had dropped to negative $13.5 billion (excluding Home Equity Conversion Mortgage loans) and that ...

Thanks to the Federal Reserve’s aggressive support for the agency mortgage market and continuing strength in the refinance program for underwater Fannie Mae and Freddie Mac borrowers, mortgage refi activity has accounted for 73.1 percent of 2012’s surging production volume. But home-purchase lending started to regain some market share during the third quarter of 2012, according to a new Inside Mortgage Finance ranking and analysis. An estimated $143 billion of home-purchase mortgages were originated during the third quarter, up 10.9 percent from the previous three-month period. By comparison, refinance production was up just 2.8 percent from the second quarter. The purchase-mortgage sector still has...[Includes three data charts]

The state of emergency in the U.S. mortgage market lives on for another year, as the Federal Housing Finance Agency announced that conforming loan limits will remain as they are for 2013. The agency didn’t have much say in the matter, since Congress in late 2011 extended the “emergency” loan limits for Fannie Mae, Freddie Mac and the FHA through the end of 2013. Lawmakers did lower the top Fannie/Freddie loan in high-cost markets of the lower 48 states to $625,500, while the top-end FHA loan is still $729,750. Although the FHA has not yet announced...

Congress needs to quit pickpocketing Fannie Mae and Freddie Mac by diverting guaranty fees from the government-sponsored enterprises to pay for purposes unrelated to housing or risk derailing the fledgling housing market recovery, warn industry groups. The House last week approved H.R. 1629, the STEM Jobs Act of 2012, which would provide visas for qualified workers in the fields of science, technology, engineering and mathematics (STEM). A manager’s amendment after the bill was sent to the House Rules Committee tacked on a “payfor” requiring the GSEs to increase their g-fees to cover the cost of implementing the bill. “We appreciate...

The Federal Housing Finance Agency has perhaps overreached in its efforts to develop a post-Fannie Mae and Freddie Mac secondary mortgage market infrastructure as industry groups say the agency’s proposal is “laudable” but rife with unintended consequences. In September, the FHFA in a white paper proposed a framework for both a common securitization platform and a model pooling and servicing agreement with a request for public comment. The proposed infrastructure has...

A three-judge federal panel this week heard a rare interlocutory appeal by one of the defendants in a series of lawsuits that the Federal Housing Finance Agency has filed in connection with non-agency MBS purchased by Fannie Mae and Freddie Mac. Lawyers for UBS Americas argued before the Second Circuit Court of Appeals that it should reverse the May ruling by Manhattan Federal Judge Denise Cote denying the bank’s motion to dismiss the FHFA’s lawsuit as time-barred under the statute of repose. The FHFA sued...

The Home Affordable Refinance Program surged to a record 286,044 loans during the third quarter of 2012, but volume began to slow in September, according to an Inside MBS & ABS analysis of new data released by the Federal Housing Finance Agency this week. HARP business was up 17.8 percent from the second quarter to the third, based on loan count, but overall refinance activity at Fannie Mae and Freddie Mac was up 21.8 percent for the same period. The program for underwater Fannie and Freddie borrowers saw a huge increase in volume at the start of the year as lenders implemented a series of changes in the program. Activity surged again in the second quarter when loan-to-value limitations were largely taken out of the equation. But HARP volume fell off...[Includes one data chart]

The Federal Housing Finance Agency continues to add to its ranks with some three dozen new positions budgeted for the current fiscal year, but despite a full-court press on hiring, the agency’s acquisition of skilled staffers, particularly more examiners, remains a challenge, according to FHFA reports. The FHFA’s Performance and Accountability Report boasted a complement of 574 employees at the close of fiscal year 2012, ending Sept. 30, a 10.6 percent increase from the agency’s reported FY 2011 head count of 519.