The government-sponsored enterprises’ risk-sharing transactions more adequately address incentive problems than non-agency mortgage-backed securities, according to a recent report by the Office of Financial Research. The OFR said back-end risk-sharing transactions from Fannie Mae and Freddie Mac “indicate how private housing finance remains crippled.” The OFR is an independent office within the U.S. Treasury Department, focusing on financial stability issues. The GSEs sold ...
The omnibus appropriations bill President Obama signed in December included a provision that supporters suggest will help spur reform of the government-sponsored enterprises. The bill prohibits the Treasury Department from selling its senior preferred shares in Fannie Mae and Freddie Mac until at least the start of 2018. “Passage of this provision makes it clear that Congress – which created mortgage giants Fannie Mae and Freddie Mac in the first place – should ... [Includes three briefs]
Investors should see a higher share of VA collateral in Ginnie Mae mortgage-backed securities pools due to increasing VA loan originations, according to Deutsche Bank analysts. Given their rising share of VA collateral, new Ginnie pools are likely to have worse convexity than most of those originated in 2015, analysts said. “VA loans tend to prepay faster than FHA loans when in the money as VA loans have larger loan sizes, higher FICO scores and a more efficient streamline refi program that requires a minimum three months seasoning,” they observed. In addition, analysts expect the population of younger veterans to surge approximately 36 percent over the next five years. “[As such], there will be a healthy supply of new VA originations eligible for pooling,” they said. As a result, the share of FHA relative to VA collateral in new Ginnie II pools will likely decrease, they said. Such a trend has manifested itself slowly as ...
The Department of Veterans Affairs has announced its loan limits for 2016, which are the same as the loan limits set by the Federal Housing Finance Agency for Fannie Mae and Freddie Mac this year. Currently, the VA’s maximum guaranty amounts are indexed to the FHFA loan limits, which range from a base of $417,000 to a high-cost area limit of $625,500. The FHFA conforming loan limit will remain unchanged at $417,000 for single-family homes, effective Jan. 1, 2016, to Dec. 31, 2016. However, in 39 counties deemed “high cost,” the conforming loan limits will increase this year. VA loan limits are calculated based on the county median home values reported by FHA. The maximum guaranty amount for loans over $144,000 is 25 percent of the current VA county loan limit. Veterans with full entitlement available may borrow up to this limit and VA will guarantee 25 percent of the loan amount. In addition, the VA county limits ...
Joint civil fraud initiatives have resulted in $558.5 million in recoveries and receivables to the Department of Housing and Urban Development in FY 2015, according to the HUD inspector general’s semiannual report to Congress. The amount includes civil settlements of $212.5 million from First Tennessee Bank, $29.6 million from Reverse Mortgage Solutions, and $1.8 million from three other settlements. The settlements resolved enforcement actions brought by the Department of Justice on behalf of HUD in pursuit of civil remedies under a variety of statutes, including the False Claims Act, Program Fraud Civil Remedies Act, and the Financial Institutions Reform, Recovery and Enforcement Act. Recoveries and receivables for other entities during the reporting period – April 1 to Sept. 30, 2015 – totaled $86.9 million and $268.2 million for the entire fiscal year. Some of the payments were made to the ...
RSS