Investors Unite, an advocacy group for GSE shareholders, criticized the Mortgage Bankers Association’s plan for GSE reform and stated that the trade group is promoting too-big-to-fail banks. The comments come after MBA President and CEO David Stevens blogged about the nine-year anniversary of the conservatorship earlier this month, and touted the benefits of MBA’s proposal for GSE reform. The group’s plan replaces the implicit government guarantee of Fannie Mae and Freddie Mac with an explicit guarantee. “In our plan, private capital would assume more risk, which would lessen the exposure of taxpayers during any economic headwinds,” he said. Stevens also went on to praise...
Fannie Mae’s most recent reperforming loan sale of 10,700 loans went to Goldman Sachs subsidiary, MTGLQ investors. It was the GSEs’ fourth reperforming loan sale transaction of 2017. The loans were divided into three pools and totaled $2.4 billion in unpaid principal balance. MTGLQ won all three pools and is expected to close on Oct. 26. The largest pool consisted of 4,482 loans with an unpaid principal balance of $9.9 billion and average loans size of $220,626. Another pool had 4,200 loans with a UPB of $9.8 billion and average loan size of $234,433. And, the last included 2,001 loans with an aggregate UPB of $4.6 billion and an average loan size of $230,751.
Freddie Mac has decided to buy mortgages with appraisals made by trainee appraisers. The GSE made the announcement in a recent bulletin updating appraisal requirements. Freddie said it made the change in response to seller inquiries. “We are also specifying that an unlicensed or trainee (or similar classification) appraiser may perform a completion report as long as a supervisory appraiser also signs the completion report,” said Freddie. The Loan Product Advisory tool has already been updated to reflect the change. The appraisal shortage likely played a role in that decision as Realtors and lenders complained about a lack of qualified appraisers and out-of-town appraisers not familiar with local market conditions incorrectly valuing homes.
Inspector General recently released a paper about the need for continued oversight of activity in the growing GSE multifamily market. Combined, Fannie Mae and Freddie Mac purchased $112 billion in multifamily mortgages last year. The paper noted that while much of the reform discussion has focused on single-family housing, the GSEs’ role in the multifamily market is a critical aspect of the housing finance system. Market-wide multifamily originations, along with Fannie and Freddie purchases of multifamily mortgages, have grown to record levels in recent years, said the OIG. But multifamily mortgages are more complex to underwrite than single-family loans. “Underwriters of multifamily loans must understand the business and...
Bank and thrift members of the Federal Home Loan Bank system had outstanding advances of $565.7 billion at June 30, a quarterly increase of 8 percent, according to an analysis by Inside The GSEs. Year-over-year numbers are also up, with the second quarter of 2017 now 4 percent higher than the $545.6 billion reported in the first quarter of 2016. In fact, the number reported in the second quarter represented the largest volume of advances for the past 12 months. However, the top three advance users were all down for the quarter. Although JPMorgan Chase continues to lead among borrowers with $68.5 billion in advances, it was down some from the $74.3 billion...
Credit-risk transfer transactions can be multifunctional in that they do more than just help take the risk off the GSEs. They’re also a good indicator for setting guarantee fees. Freddie Mac said CRTs are often indicative of what the private market would charge for the risk taken on by a GSE. And the appropriate level of g-fees has been an important issue in housing finance.
Fannie Mae and Freddie Mac recently released more details on requirements for participating in their new refinance option for loans originated after Oct. 1. This option allows borrowers with high loan-to-value ratios to refinance. While the official start date is next month, the GSEs said that a minimum of 15 months must have passed between the note date of the existing loan and the start of the new loan. For example, if the mortgage is originated in October 2017, the note date of the new loan can be no earlier than February 2019. To participate, the loans must be owned or securitized by Fannie or Freddie and can include loans that are part of its risk-sharing structure.
GSEs. Congress should be the one that makes the ultimate decision on deciding the future of Fannie Mae and Freddie Mac, according to a just-completed poll from Inside Mortgage Finance. Roughly, 28 percent of industry professionals picked Congress as the ultimate decider with the Federal Housing Finance Agency coming in a close second at 25 percent. Treasury finished third in the poll at 18 percent. Then again, the fourth choice – “I wish we had another option, but we don’t” actually garnered the highest response at 29 percent.Wells Fargo Analysis of GSEs’ Portfolio. Wells Fargo said that the GSEs’ portfolio needs to be able to buy out seriously delinquent loans from mortgage-backed securities and provide
A former Deutsche Bank employee is at the center of a lawsuit brought by the government over the sale of more than $1 billion of non-agency MBS. It’s rare when the government focuses on an individual for mortgage fraud, but the Department of Justice said the bank’s former head of subprime trading allegedly defrauded investors out of hundreds of millions of dollars. The civil complaint was filed in Brooklyn’s federal court against Paul Mangione for knowingly selling bad subprime mortgages financed during the crisis and misleading investors about loan quality. The complaint alleges that he engaged in fraudulent schemes involving the origination practices of Deutsche Bank’s subsidiary, DB Home Lending LLC, which originated the bulk of the loans. The securities were sold...
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