Housing finance reform, especially if it weakens mortgage underwriting standards, could have a negative impact on private-label MBS as well as the government-sponsored enterprises’ credit risk-transfer transactions, according to a newly published report from Moody’s Investor Services. Analysts said that various reform proposals could reduce the influence that Fannie Mae and Freddie Mac have in the market and likely increase credit risk in new MBS in the short-term. Combined with a rising interest rate environment, such reform could have a credit-negative effect. Loan origination processes and the kinds of loans produced could become...
Congress should pass legislation setting uniform standards for qualified mortgages, according to the U.S. Mortgage Insurers trade group. USMI raised particular concerns about differences in the points-and-fees calculation for FHA mortgages compared with the standard for mortgages delivered to the government-sponsored enterprises. As required by the Dodd-Frank Act, the Consumer Financial Protection Bureau established standards for QMs. Certain federal regulators, including the Department of Housing and Urban Development, were allowed to implement QM standards that differed from the CFPB standards. USMI noted...
Two months after it was revealed that Fannie Mae would provide $1 billion in financing to single-family rental operator Invitation Homes, certain factions of the mortgage industry are starting to yell “charter creep.” Moreover, the National Association of Realtors and other trade groups are complaining that perhaps Fannie is spending too much of its limited resources helping Wall Street – the Blackstone Group grubstaked Invitation Homes initially – and not enough to help the first-time homebuyer. “What’s...
RSS