Freddie CEO Don Layton warns that staffers “at all levels” would flee the secondary market giant amid the five-year transition period, citing several provisions of the bill that are detrimental to employees.
Beginning in December, the FHFA directly stepped into the MSR sales market, requiring its approval on all Fannie/Freddie transfers involving 5,000 loans or more. This additional level of approval initially caused concern in the market because it added another layer of oversight to sales.
Fitch said ignoring broker price opinions dramatically increased the likelihood of underestimating potential loss severities and results in insufficient credit enhancement.
Based on what Freddie's Layton said, one might think that going forward, the GSEs might barely break even. Maybe that’s why the GSEs – and not necessarily Mel Watt – want to hike their guaranty fees…
Additional industry layoffs are likely in the months ahead. In the first quarter, all lenders originated just $235 billion in mortgages. It was the weakest production quarter in 14 years.
The first-quarter high-LTV refi market was down 37.1 percent from the fourth quarter and off a hefty 79 percent from the $51.4 billion of business the two GSEs did back in the first three months of last year.
Johnson-Crapo requires 12 percent mortgage insurance if the LTV exceeds 80 percent but is no more than 85 percent; 25 percent MI if the LTV exceeds 85 percent but no more than 90 percent; and 30 percent MI if the LTV exceeds 90 percent.
Did someone in the mortgage industry actually ask one of the GSEs recently to increase the 25 basis point servicing fee that it pays to residential servicers?
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