Fannie Mae and Freddie Mac each managed to meet its risk-sharing objectives for 2013 without breaking the link to the to-be-announced market, but their regulator wants the government-sponsored enterprises to go beyond the comfort zone. The risk-sharing transactions undertaken by the GSEs this year were very positive, but they relied on the “underlying infrastructure” of Fannie and Freddie MBS, said Edward DeMarco, acting director of the Federal Housing Finance Agency, in a speech at this week’s annual convention of the Mortgage Bankers Association. The Structured Agency Credit Transactions and Connecticut Avenue Securities launched, respectively, by Freddie and Fannie, involved selling relatively small amounts of debt that will pay investors based on the performance of separate MBS pools that were issued and trade in the TBA market. DeMarco wants...
Efforts to redefine the FHA’s mission under the pretense of eliminating taxpayer risk would be counterproductive to the goal of housing finance reform, warned FHA Commissioner Carol Galante. In recent remarks to a housing reform forum in Washington, DC, Galante said that while housing reform is necessary, restricting the FHA’s ability to perform its dual mission in response to perceived risk is not the way to go. This type of over-correction would damage access to affordable credit, she cautioned. Apparently referring to pending House Republican reform proposals for the government-sponsored enterprises and the FHA, Galante said...
Although Fannie Mae and Freddie Mac are working through the pile of potential repurchases related to pre-conservatorship loans, lenders remain concerned about buyback risk – even under the more lender-friendly policies that went into effect this year. “The representations and warranties framework we have in this industry absolutely does not work,” said Brian Fitzpatrick, president and CEO of LoanLogics, during a panel session at this week’s annual convention of the Mortgage Bankers Association. The new reps-and-warranties framework devised by the Federal Housing Finance Agency in January provides...
The future of the mortgage market is assuming a much more prominent position in policy discussions among Congressional lawmakers, particularly in the Senate. But while there is real reason to expect progress on a legislative solution to Fannie Mae, Freddie Mac and a privately funded secondary market this year, Capitol Hill insiders warn that the endgame should be measured in years, not months. Speaking at the Mortgage Bankers Association’s annual convention in Washington this week, former House Financial Services Committee Senior Counsel Michael Borden and former Senate Banking, Housing and Urban Affairs Committee Staff Director Dwight Fettig agreed it’s a virtual certainty that a final reform bill will not materialize during the 113th Congress. “I think we’re...
It’s a done deal that the Federal Housing Finance Agency will make “across the board” reductions in Fannie Mae and Freddie Mac loan limits that will take effect in May 2014, but factions in the housing and mortgage industries are already drafting contingency plans if the cuts are too deep. “I would say if they are significantly – 5 to 10 percent – reduced, then you will see new legislation,” said one industry lobbyist who’s been tracking the issue for well over a year. In other words, if the national loan limit falls...
During a Q&A session at the convention, MBS co-inventor Lew Ranieri said there is no “viable” alternative to Fannie Mae and Freddie Mac, noting that if the two disappear banks will not rush to put 30-year fixed rate loans on their books.
Moody’s believes the servicers’ transitions into mortgage originations was positive, but raised concerns about declining refinance opportunities, competition with banks and the potential for nonprime originations.
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