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Inside Mortgage Finance

April 5, 2012

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GSE Securitization Volume Up Sharply In Early 2012 as Refi Activity Surges

Mortgage lenders delivered a hefty $303.9 billion in single-family home loans to Fannie Mae and Freddie Mac securitization programs during the first quarter of 2012, the biggest flow of new business to the government-sponsored enterprises in over a year, according to a new analysis and ranking by Inside Mortgage Finance. During the first three months of 2012, GSE single-family securitization jumped 16.2 percent from the fourth quarter. It marked the fourth straight quarterly increase in production of Fannie and Freddie mortgage-backed securities after the market troughed...(Includes three data charts) Read More

Debate Rages Over GSE Principal Writedowns As FHFA Mulls Treasury Offer to Pay Incentives

The Federal Housing Finance Agency expects to finish its latest assessment of principal reductions on Fannie Mae and Freddie Mac loans sometime this month against a backdrop of intensifying public debate over the issue. The Treasury Department this week fought back against claims that its proposed incentive payments to the government-sponsored enterprises, if they agree to principal reduction loan mods, would be a “backdoor bailout” for banks that service these loans. Treasury earlier this year offered to pay the GSEs the same incentives that other investors get for principal reduction loan mods under... Read More

Increased Investor Activity Spurring More Home Sales But Also Lower Prices in 2012, New Survey Results Show

The general pickup in housing activity in early 2012 is welcome news for a mortgage industry both gearing up to unload significant numbers of foreclosed properties and looking to increase home purchase financing this year. But the fact that investors are driving much of the recent surge in home sales is not necessarily good news for mortgage interests. According to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey, the investor share of home purchases hit a record-high of 24.2 percent in February based on a three-month moving average. That was up from a 20.9 percent... Read More

GAO, HUD IG Question Whether Steps Taken by FHA Will Be Enough to Avoid Taxpayer Rescue

Certain watchdog agencies of the federal government have expressed concern to Congress about whether additional steps already taken by the FHA and Ginnie Mae to improve their risk management are sufficient to avert potential government intervention. A recent study by the General Accountability Office and testimony by Department of Housing and Urban Development Inspector General David Montoya before a House panel have raised questions about the financial stability of the FHA and Ginnie Mae and their ability to respond to a major financial crisis. Both the GAO and Montoya concluded that the two agencies... Read More

Another Disparate Impact Lending Accusation Illustrates Importance of Fair Lending Compliance

Two fair lending groups say 2011 data collected under the Home Mortgage Disclosure Act reveal that Citigroup, JPMorgan Chase, Wells Fargo and others continued making subprime mortgages last year in a way that had a disparate impact on minority borrowers. Fair Finance Watch said the raw data show that African American borrowers last year were 3.38 times more likely to get a so-called rate-spread loan (1.5 percentage points over Treasury yields) from Citigroup than white borrowers, worse than its 2.25 times disparity rate in 2009. Hispanic borrowers were 2.42 times more likely than whites to get a rate... Read More

OIG Faults Finance Agency’s Conservatorship Of Fannie, Freddie, Cites Lax Supervision

The Federal Housing Finance Agency should assume “a more active role” in its management of Fannie Mae and Freddie Mac and has not been sufficiently proactive in its enforcement and oversight of the two government-sponsored enterprises, according to the FHFA Inspector General. “FHFA’s role as conservator has evolved over time,” the IG said. At the outset of the conservatorships, FHFA forbade the enterprises from engaging in certain activities and retained approval authority over others,” said the OIG report. “Soon thereafter, FHFA delegated day-to-day operational decision making to the... Read More

FHA Premium Hikes Help Private MIs to Stay Competitive but Outlook Remains Challenging

Private mortgage insurers are optimistic the industry will remain competitive and expect a boost in new business as a result of the FHA’s recent premium price adjustments, but things may change for better or for worse depending on how economic factors play out in 2012. Officials at Radian Guaranty and Mortgage Guaranty Insurance Corp. said 2012 may yet turn out be a good year despite pessimistic outlooks by rating agencies. MI executives point to the declining unemployment rate and loan defaults as positive signs. Radian sees the recent FHA pricing changes as an opportunity for the MI industry... Read More

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