Congress is not expected to produce workable GSE legislation until next year and even then, other issues – tax reform, another run at fixing “Obamacare,” for example – could kick the can down the road.
Over the past several weeks, the Treasury Department has been meeting with several industry trade groups about the future of Fannie Mae and Freddie Mac, discussing – among other things – what to do about the impending “zero capital” problem as well as the topic of multiple guarantors. Treasury’s goal, these officials said, is to come up with a workable blueprint on the future of the government-sponsored enterprises and the nation’s housing finance system – changes that might touch Ginnie Mae as well. Late this week there was...
Credit-risk transfers can be used to calculate guarantee fees because they’re indicative of what the private market would charge for the risk taken on by a government-sponsored enterprise, according to Freddie Mac. But the mortgage giant explained that g-fees are likely more stable than a system that relies exclusively on credit-risk transfers. Kevin Palmer, Freddie’s senior vice president of single-family credit risk transfers, said in a white paper the significant amount of credit risk being transferred to the private capital markets provides a way to calculate a market-implied g-fee. Since 2013, the GSE has transferred much of the credit risk on $760 billion of MBS it guarantees. Based on the pricing of Freddie’s Structured Agency Credit Risk transactions over the past year, the market-implied g-fee has been...
Rob Zimmer, a former Freddie Mac executive: “Republicans run this town, obviously, and there is no way they want to be identified as the party of taxpayer bailouts for large financial institutions.”
The correspondence, which includes the signature of ranking minority member Sherrod Brown, D-OH, notes: “We are simply requesting that the GSEs be permitted to build capital...."
Redwood Trust has seen strong demand from borrowers and correspondent lenders for its “expanded prime” program that the aggregator introduced last year. The real estate investment trust’s Choice products allow for somewhat looser underwriting than the super-prime mortgages that have dominated the jumbo market after the financial crisis. The Choice program was introduced in April 2016. Volume has increased relatively quickly and could top $1.0 billion this year. Officials say...
The Mortgage Bankers Association, along with other housing trade groups, wants to make sure that Fannie Mae and Freddie Mac housing goals work in tandem with pending duty-to-serve requirements and multifamily volume caps to promote affordable housing. The MBA was one of about 10 groups that offered commentary on the proposed new housing goals for the government-sponsored enterprises for 2018 through 2020. The current goals expire at the end of the year. The Federal Housing Finance Agency released the proposed goals in June. The MBA said...
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