Fannie Mae and SoFi introduced a new loan option last week that lets homeowners take advantage of low rates and use the equity in their home to pay down college loans. Under the Student Loan Payoff ReFi, homeowners can refinance mortgages and cash out while paying down an existing loan balance. Fannie estimates that just 1.8 percent of the cash-out mortgages it finances today are being used to pay off student loans. With cash-out refinances growing, Deutsche Bank said it expects to see refinance activity and mortgage-backed security issuance tick up. The new product is driven by cutting guaranty fees that usually accompany Fannie cash-out mortgages. GSE officials said they received approval...
Fannie Mae and Freddie Mac low-downpayment programs have been in the market for almost two years now but they haven’t been getting a lot of mileage. Although numbers picked up in the third quarter, some say the programs need to be simplified in order to promote more usage. The GSEs purchased $10.31 billion of purchase mortgages with loan-to-value ratios of 96 to 97 percent through Sept. 30, 2016, according to an Inside Mortgage Finance analysis of mortgage-backed securities data. However, nearly half of that came in the third quarter, which saw a 52.7 percent jump from the previous period. Fannie’s HomeReady program and Freddie’s Home Possible Advantage products were designed to help creditworthy, low- and moderate-income buyers.
The Federal Housing Finance Agency determined that for 2015 Fannie Mae and Freddie Mac did not meet all of their low-income and very low-income home-purchase goals, according to the FHFA’s preliminary annual housing report released in late October. Fannie met all of its goals in 2014 but this is the second year that Freddie fell short of meeting the same goals. Under the GSEs’ affordable housing goals, low-income is for home-purchase mortgages to families with incomes no greater than 80 percent of the area median income, and the very low-income home- purchase goal is for families with incomes no greater than 50 percent of AMI. The low-income home-purchase goal was 24 percent and Freddie ended 2015 at 22.3 percent.
The Federal Home Loan Bank System witnessed an increase in earnings for the third quarter, which rose to $861 million, and a year-to-date total of $2,478 million. The FHLBank Office of Finance noted that the quarterly net income increase was due to higher gains on litigation settlements, derivatives, hedging activities and higher net interest income. Additionally, the increase on year-to-date earnings was due to gains on trading securities, partially offset by losses on derivatives and hedging activities. Total assets for the FHLBanks grew to $1.036 trillion, an 8.7 percent increase from the second quarter. Advances represented $688.6 billion, which was driven mainly by higher member demand by larger members. That number is down slightly from the...
Fannie Names RPL Winner: Fannie Mae announced this week that Towd Point Master Funding (Ceberus) is the winning bidder for its first reperforming loan sale. The sale included approximately 3,500 loans totaling $789.2 million in unpaid principal balance, split into two pools. Towd won both pools and the transaction is expected to close on Dec. 15, 2016. In collaboration with Citigroup Global Markets Inc., Fannie began marketing these loans to potential bidders on Oct. 11, 2016. The RPL sale is part of its efforts to reduce the size of the GSE’s balance sheet. Bob Ives, vice president of retained portfolio asset management, said, “We are pleased to see a high level of investor interest in our reperforming loans.”
Second-ranked AGNC Investment Corp. – formerly American Capital Agency Corp. – reported a 2.2 percent increase in its MBS holdings under a new management structure…
Market analysts, observers and participants alike feel pretty much in the dark about what to expect from Republican President-elect Donald Trump when it comes to the fate of government-sponsored enterprises Fannie Mae and Freddie Mac. “Mortgage finance legislation and the future of the GSEs was never discussed during the campaign so there are no clear indicators of what a Trump administration will do regarding the future of Fannie Mae and Freddie Mac,” analysts at Keefe, Bruyette & Woods said in a post-election review. Complicating life for the new regime is...
Money market funds held $114.98 billion of Fannie Mae and Freddie Mac paper at the end of the third quarter, including MBS issued by the two government-sponsored enterprises and debt notes. The September figures represented a 5.7 percent increase from the midway point in the year and an 8.8 percent climb from a year ago. Freddie MBS and debt remained more popular, accounting for 60.1 percent of the sector’s GSE holdings. The data are...[Includes one data table]
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