In one of the latest proposals for GSE reform, a trio of authors suggested that most other proposals have been too “complicated” and suggest that Fannie Mae and Freddie Mac morph into a Ginnie 2.0 structure. They said this would utilize the best of the GSEs’ core capabilities and Ginnie Mae’s functionality. Ginnie is best suited to support the conventional market of Fannie and Freddie while dropping the more harmful aspects, such as their large mortgage portfolios and interest rate and credit risk, said the authors, who include Jim Park, CEO of the Mortgage Collaborative. They suggested that the Federal Housing Finance Agency transfer the necessary GSE components, such as key employees, underwriting...
Congress should encourage a large increase in the amount and types of risk-transfer transactions the GSEs take on, Rep. Ed Royce, R-CA, said while speaking on a panel focused on restarting the private market for mortgage credit. Royce said that would include both back-end and front-end risk sharing. “We also have to figure out how to promote risk-transfer transactions that allow access to all types and sizes of mortgage originators,” he said. Real estate investment trusts, for example, which account for just 2 percent of risk-sharing transactions, face regulatory challenges that limit their involvement. Stanford Kurland, CEO of PennyMac Financial Services, said it addressed some of the REIT issues in structuring its PennyMac Mortgage Investment Trust.
The Federal Home Loan Bank system earned $825 million in the first quarter of 2016, down from the $1.015 billion earned in the first quarter of 2015, according to figures compiled by the system’s Office of Finance. Lower gains on litigation settlements and higher losses on derivatives and hedging activities for the three months ending on March 31 contributed to the 19 percent decrease, according to the OF. Litigation settlements accounted for $348 million in income in the first quarter compared to $480 million a year earlier. The 1Q16 income was from the FHLBank of San Francisco’s $211 million settlement and the FHLBank of Des Moines’ $137 million settlement of claims arising from investment in non-agency mortgage-backed securities.
Although the GSEs are reviewing loans to make sure the new TRID forms are being used, not for technical compliance, Fannie Mae’s survey of lenders on the impact of TRID showed vendor coordination and communication with key players have been the biggest challenges.More than three quarters of the lenders surveyed cited challenges when it comes to managing and coordinating third-party technology vendors and communication with buyers, sellers and loan officers. In addition, smaller lenders said they feel more burdened since the rule took effect in October. Fannie said many small- to-midsized lenders indicated that they don’t have the same resources as larger institutions which can easily invest in upgrading systems and have in-house compliance resources to...
Freddie Announces Second NPL Transaction of 2016. Freddie Mac announced a $135 million non-performing loan transaction this week. The NPLs are currently serviced by JP Morgan Chase Bank. Bids are due from qualified bidders on May 25, 2016. The sale is expected to settle in the third quarter of 2016 and the NPLs are offered as one pool. The winning bidder will be determined based on economics, subject to meeting Freddie’s internal reserve levels. Fannie Names Winners of Latest NPL Sale. Fannie Mae’s winning bidder of all four pools in its fifth non-performing loan sale is Goldman Sachs. The sale included approximately 7,900 loans totaling $1.48 billion in unpaid principal balance. The transaction is expected to close June 27, 2016.
Perhaps, the time is drawing near to once again raise the thorny issue of whether the Department of Housing and Urban Development should cut FHA premiums...
In almost 19 months, the capital cushions at Fannie Mae and Freddie Mac will fall to zero, which means if either government-sponsored enterprise (or both) suffers a net loss in a quarter, Uncle Sam will need to step in and supply cash to get the afflicted party back to zero. Depending on whom you talk to in the mortgage industry, a capital draw from Treasury could set off irrational behavior on the part of Congress or it’s much ado about nothing. …
Over half (51.1 percent) of VA loans securitized through Ginnie MBS in the first quarter of 2016 were retail originations, but only 39.1 percent of FHA loans came through that channel.
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