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Inside Mortgage Finance

June 9, 2006

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Acting OFHEO Chief Sees Need to Study GSE Systemic Risk, House Lawmakers Urge ‘Other Body’ to Move Legislation

In his maiden appearance in Congress as a regulator, James Lockhart, acting director of the Office of Federal Housing Enterprise Oversight, this week said finding the appropriate methodology for dealing with systemic and operational risks is crucial before acting to restrict Fannie Mae’s and Freddie Mac’s portfolio growth. … Read More

HUD Rulemaking Flurry on Fair Lending Issues Suggests More Sunshine on Agency Oversight of GSE Practices

The Department of Housing and Urban Development this week proposed a modest change in its oversight of Fannie Mae and Freddie Mac that could open the door for more public scrutiny of the agency’s regulation of the two government-sponsored enterprises. As part of a package of regulatory initiatives on fair lending, HUD proposed a new rule designed to strengthen its efforts – and those of the GSEs – to combat predatory lending practices. Under an… Read More

HUD Acts to Cut MSR Balance-Sheet Volatility, Improve Re-covery on Troubled FHA Assets

The Department of Housing and Urban Development is giving Ginnie Mae issuers a program through which they can reduce their exposure to mortgage servicing rights volatility. In a separate rulemaking, the agency also proposed changes to maximize the FHA’s recovery on assets sold by HUD. A HUD final rule published in the June 5 Federal Register will allow Ginnie Mae to guarantee new securities backed by excess servicing fee income from mortgage pools underlying previously… Read More

Studies Probe HMDA Data for Racial Disparities, Return Conflicting Results

A study of Home Mortgage Disclosure Act data by a law firm that represents mortgage lenders concludes that differences in loan pricing do not appear to be discriminatory. Separately, a nonprofit advocacy group released results based on 2004 HMDA data that show some minority groups are more likely to get high-priced loans. … Read More

Refi Business Still Plays Major Role in Mortgage Originations; Wells Leads in Purchase Money

Any historical assumptions the mortgage industry has about refinance activity may have to be revised because the allegedly cyclical refi market continues to account for nearly half of loan production in 2006. Throughout some fairly large swings in interest rates over the past five years, refinance loans have seldom dropped much below 50 percent of new loan originations. In the first quarter of this year, refinance volume accounted for 49.0 percent of new lending, down… [One data table included] Read More

Clinton’s FHA Bill Calls for Motivated Personnel, Better Information Technology, 50-Year Mortgage

Mortgage bankers applauded legislation introduced last week by Sen. Hillary Rodham Clinton, D-NY, that would enable the FHA to offer alternatives to higher-cost subprime mortgage products, among them a 50-year mortgage product. Like its House counterpart H.R. 5121, Clinton’s S. 3173, “The 21st Century Housing Act,” would strengthen the FHA’s ability to provide new products to low- and moderate-income first-time homebuyers and minorities – a market once dominated by the FHA but whose share has… Read More

Mortgage Production Volume Slipping In May, Agency MBS Is-suance Softens

The pace of new mortgages delivered into the agency MBS market slowed modestly in May, an early indicator that the primary market is softening as well. Total monthly MBS issuance by Fannie Mae, Freddie Mac and Ginnie Mae dropped in January and continued to decline through the end of March, according to the Inside Mortgage Finance MBS Database. After starting the first month of 2006 with $82.26 billion in volume, agency MBS issuance slipped… [Two data tables included] Read More

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