New non-agency MBS issued in 2017 will likely include more diversified collateral and feature some structural changes, analysts at Moody’s Investors Service said in a new report this week. The rating service projected that non-agency prime jumbo volume will remain steady in 2017, while issuers will continue to explore non-traditional asset types, such as re-performing and non-performing loans, reverse mortgages, non-qualified mortgages and nonprime transactions. “Although prime jumbo deals will start to include loans with slightly lower FICOs and higher loan-to-value ratios than those loans included in 2016 transactions, collateral quality will remain...
ResCap Liquidating Trust last week filed two new lawsuits against lenders as it continued its efforts to recover losses due to bad loans purchased from correspondents that later forced the company into Chapter 11 bankruptcy. No other details were provided by defendant attorneys with American Mortgage Law Group, which warned that the Dec. 2 filings in Minnesota federal district court may trigger a second wave of litigation by the trust. AMLG said it has been helping a number of lenders with pre-litigation demands from the trust and has seen increased activity on that front. On Nov. 16, a federal judge dismissed...
With November’s election potentially unraveling key features of the financial regulatory structure instituted over the past eight years, experts say it’s time for policymakers to figure out what’s working and what needs to be fixed. During a panel session hosted by the Bipartisan Policy Center, Richard Berner, director of the Office of Financial Research, said that more information is needed about liquidity because a lack of it is often cited as one of the unintended consequences of regulation. “Market liquidity is...
In case you’re not keeping tally, there are roughly 387 calendar days remaining before the “capital buffer” at Fannie and Freddie falls to zero on Jan. 1, 2018.
Defects in mortgage loans produced under the Consumer Financial Protection Bureau’s integrated disclosure rule fell modestly in the second quarter of 2016, after peaking in the first three months of the year. This is the first such drop since the TRID rule took effect in October 2015, according to a new quality control analysis from ARMCO, a risk management technology vendor. “TRID-related defects continue to be the leading area of concern in post-closing reviews; however ...
Comments made by Treasury Secretary Designate Steven Mnuchin about privatizing Fannie Mae and Freddie Mac caused much speculation around Washington last week. But analysts predict that privatization in the near term is unlikely. Mnuchin criticized the fact that the GSEs have been in conservatorship this long. During a cable television interview he said, “We’ve got to get Fannie and Freddie out of government ownership,” adding that it often displaces private lending in the mortgage markets. “So let me just be clear. We’ll make sure that when they’re restructured they’ll be safer and they won’t get taken over again, but we’ve got to get them out of government control.”
Although the common stock of Fannie Mae and Freddie Mac has been deemed near worthless by stock analysts (and others), the share price of the two has been on a tear of late thanks to comments made two weeks ago by investment banker Steven Mnuchin, President-elect Donald Trump’s pick to head the Treasury Department. As Inside The GSEs went to press this week, Fannie common was trading at just $4.00 a share, Freddie at $3.90. And while that might not seem like much, it represents a stunning 166 percent gain since right before the November election. Mnuchin set the stocks in orbit when he said during a cable TV interview that resolving...
If lenders evaluated borrowers more “holistically” and put less emphasis on credit scores, the share of minorities receiving purchase mortgages could increase significantly, according to analysts at the Urban Institute’s Housing Finance Policy Center. Laurie Goodman, director of the HFPC, and Alanna McCargo, the co-director, noted that some 70.0 percent of purchase mortgages originated in 2015 went to white borrowers. They suggested that the disparate impact of tight credit is ...
The National Fair Housing Alliance filed a housing discrimination lawsuit against Fannie Mae for allegedly not properly maintaining real estate-owned properties in 38 metropolitan areas with high proportions of African-Americans and Latinos.The lawsuit was filed this week in the federal district court in San Francisco. Fannie denies the allegations. According to the NFHA and 20 local fair housing groups across the country, Fannie purposely does not maintain its foreclosed properties in middle- and working-class minority neighborhoods to the same level of quality it does for foreclosures it owns in comparable white neighborhoods. Foreclosed properties in minority communities were littered with debris and trash, marked by graffiti...
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