Fannie Mae and Freddie Mac saw a 13.1 percent drop in new business in their flagship single-family mortgage-backed securities programs during the second quarter, according to an exclusive analysis and ranking by Inside Mortgage Finance. The two government-sponsored enterprises issued a combined $189.70 billion of single-family MBS during the April-June cycle. It was their weakest quarter since early last year, although year-to-date volume was still up 4.3 percent from the first half of 2016. As widely predicted, the decline was...[Includes three data tables]
Late last month the Senate Banking, Housing and Urban Affairs Committee showed a new willingness to tackle housing-finance reform legislation and the fate of Fannie Mae and Freddie Mac, but the wild card remains how its bipartisan solution will go over in the House. Rep. Jeb Hensarling, R-TX, the chairman of the House Financial Services Committee, is no friend of the two government-sponsored enterprises and has leaned toward minimizing the government’s role in the market. Based on his past legislative efforts regarding GSE reform, the conservative from Texas would love...
An analysis of non-qualified mortgages suggests that many of these borrowers have credit qualities strong enough to qualify for a mortgage that could be delivered to the government-sponsored enterprises. However, issues involving credit events and income documentation can disqualify such borrowers from conventional mortgages. According to an analysis by Morningstar Credit Ratings, the weighted-average loan-to-value ratio for securitized non-QMs is 75.2 percent and the average debt-to-income ratio on the loans is 36.6 percent. The rating service noted that QMs (including agency and non-agency mortgages) have an average LTV ratio around 69.0 percent and an average DTI ratio around 32.3 percent. In addition to showing that certain characteristics don’t differ much between QM borrowers and non-QM borrowers, the analysis suggests...
Progressive Democrats helped derail housing-finance reform legislation in the last Congress because they thought affordable housing provisions weren’t rigorous enough. It’s clear that issue will be key in the renewed reform effort taking shape in the Senate Banking, Housing and Urban Affairs Committee, along with another matter that was mostly overlooked in 2014: mortgage servicing. Late in the panel’s hearing on reform last week, Sen. Elizabeth Warren, D-MA, made clear that affordable housing will be an issue. “There’s an affordable housing crisis in this country pushing homeownership below 64 percent,” she said, adding that it’s also put a strain on rental units. Sen. Sherrod Brown, D-OH, the ranking minority member of the panel, said...
The Federal Housing Finance Agency proposed minor revisions to its single-family and multifamily housing goals for 2018 through 2020 to push Fannie Mae and Freddie Mac to continue helping low-income borrowers. The FHFA acknowledged that Fannie and Freddie are challenged when it comes to making credit available for the low-income market. Both government-sponsored enterprises have fallen short of the market in the low-income and very low-income purchase goal almost every year since 2013, the regulator noted. Most of the single-family goals would remain...[Includes one data table]
“In a normal [commercial] bank acquisition, senior managers usually get a big payday,” said former FHLBank Chicago President Alex Pollock. “But in this case, if you merge [with another FHLB] you could lose your job.”
A representative of the Conference of State Bank Supervisors testified before the U.S. Congress recently, telling lawmakers that smaller financial institutions can’t engage in as much residential mortgage lending activity as they otherwise would because of the growing reporting requirements under the Home Mortgage Disclosure Act, as well as the CFPB’s ability-to-repay/qualified mortgage rule. In his testimony before the Senate Banking, Housing and Urban Affairs Committee, Charles Cooper, commissioner of the Texas Banking Department and immediate past chairman of CSBS, said the CFPB’s recent expansion of HMDA reporting requirements has placed a disproportionate burden on smaller and less complex institutions, potentially restricting mortgage lending as well. “In 2018, the number of data points required to comply with HMDA reporting standards ...
The Federal Housing Finance Agency’s recommendation that it gain authority to oversee nonbanks didn’t go over too well with some in the mortgage industry. The GSE regulator argued that oversight of nonbank mortgage servicers only happens via contractual provisions when possible. In the FHFA’s Annual Report to Congress, it said other federal safety and soundness regulators are allowed statutory authority to examine companies that provide services to depository institutions. David Stevens, the Mortgage Bankers Association’s president and CEO, questions the purpose of the FHFA recommendation and said it would only lead to more unnecessary regulation.
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