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Inside The GSEs

June 2, 2017

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Fannie/Freddie 1-Fam Business Volume Heated Up in May

A surging home-purchase market helped boost new single-family business volume at Fannie Mae and Freddie Mac in May, according to a new ranking and analysis by Inside The GSEs.Together, the two companies issued $62.03 billion of single-family mortgage-backed securities in May, an unspectacular 6.3 percent increase from April. In fact, May’s volume was the second lowest monthly production of the year. But that’s because the early months of 2017 were still heavy with refinance business. Purchase-mortgage business at Fannie and Freddie was up a solid 15.5 percent from April, hitting $36.78 billion, tops so far in 2017. Meanwhile, Fannie and Freddie securitized just $23.98 billion of refinance loans in May. Read More

Proposal Focuses on Affordability Aspect of GSE Reform

Two major organizations, the Bipartisan Policy Center and the American Bankers Association, have both weighed in on GSE reform in recent weeks. The Bipartisan Policy Center released a brief late this week focusing on improving access and affordability in housing finance reform that is not dependent on any one structure or future role for the GSEs. It also wants to make sure that the government guarantee remains. “It is this guarantee that forms the basis of the obligation to ensure that the benefits flowing from the government backstop are as broadly available as possible, consistent with safety and soundness and taxpayer protection,” said Michael Stegman, a BPC fellow and author of the paper. Read More

FHFA Publishes Third NPL Report, Illustrates Progress in Outcomes

The GSEs had sold more than 72,502 nonperforming loans through December 2016, according to the Federal Housing Finance Agency’s third report highlighting nonperforming loan sales and borrower outcomes. That number is up from the 59,629 NPLs that were sold through August 2016. The report, released this week, is part of the FHFA’s plans to make NPL sales activity more transparent. The agency released its inaugural report last June. The latest report shows that NPL sales totaled unpaid principal balance of $14.2 billion, and had an average current loan-to-value ratio of 97 percent. The average delinquency of pools sold ranged from 1.4 to 6.2 years. Read More

Fannie Cracks Down on Financing REO Homes for Rent-to-Own Firms

Fannie Mae plans to discontinue selling homes to one of the largest rent-to-own firms as part of a crack down on abusive forms of seller financing. After criticism brewed about abuses with practices such as rent-to-own leases and long-term installment agreements such as contract-for-deed sales, the GSE said it will not sell REO properties to Vision Property, a South Carolina-based firm. The firm has been in operation since 2004 and owns more than 6,000 homes across the country. Vision was highlighted in a New York Times article last year, which noted, “Most tenants walk away with nothing, having sunk money for rent and repairs into homes they had once hoped to own. Others faced surprise evictions.” Read More

Watt Voices Concerns on FHLBank Short-Term Funding Reliance

Federal Housing Finance Agency Director Mel Watt is worried that the Federal Home Loan Banks are relying too much on short-term funding of long-term assets. He called this a “funding mismatch.” Watt spoke at the FHLBank Annual Director’s Conference last week about the banks’ performance and said they reported strong net earnings of $3.4 billion in the last quarter. However, he also dished on a couple of supervisory priorities and said he was most concerned about a funding mismatch.” Watt acknowledged that changes in the rules on money market funds have been a significant driver of investor appetite for short-term FHLBank paper, but noted that the FHLBanks can’t afford to think it will always be that way. Read More

Woman Convicted for Stealing Identifying Info. from Freddie Staff

A woman stealing personal identifying information from more than 2,000 Freddie Mac employees and affiliates was sentenced to prison last month. Between 2012 and 2014, Allise Jones, a 29-year- old from Maryland with no known ties to the company, conspired with others to use personal information about current and former employees of the GSE. Freddie was advised in August 2016 by law enforcement authorities that personal information of up to 2,500 employees may have been accessible to several unauthorized persons in April 2013, according to a spokesperson for Freddie. The Department of Justice announced that a federal jury convicted Jones in February and on May 19 sentenced her to 5.5 years in prison. Read More

Fannie Gives Multifamily Borrowers Price Breaks for Healthy Design

Fannie Mae’s new Healthy Housing Rewards program offers price breaks for multifamily borrowers who incorporate healthy design features into their newly constructed and rehabilitated affordable properties. Those features include things that provide cleaner air, encourage physical activity and incorporate common space, community gardens, playgrounds and easier access to biking and pedestrian traffic into the community. The GSE said it’s important that the affordable rental properties it finances be built and managed in a way that creates a healthy environment. The Healthy Housing Rewards initiative will target properties where at least 60 percent of the units are serving tenants earning 60 percent or less of the area median income. Read More

FHFA Seeks Input on Access for Borrowers with Limited English

The Federal Housing Finance Agency is opening back up the possibility of adding a question about language preference on the Uniform Residential Loan Application. In a request for input issued on May 25, the FHFA is seeking information on a number of potential short-term and long-term improvements to help borrowers not fluent in English better understand the mortgage process. The FHFA is looking for stakeholder views on issues like translating more documents in different languages, education about multilingual housing counselors, using emerging technologies and tracking borrowers’ preferred languages. The FHFA originally suggested data tracking last year and considered including a question about a borrower’s language preference in the Uniform Residential Loan Application to help lenders and... Read More

Fannie and Freddie Reperforming Loan Programs Forging Ahead

The GSEs’ reperforming loan programs are making inroads with both Fannie Mae and Freddie Mac announcing recent RPL transactions to help reduce the amount of illiquid assets in their portfolios.Fannie introduced its first reperforming loan sale back in November and the program has continued to gain popularity with each sale. The program has grown from its first sale, which totaled $789.2 million in unpaid principal balance to the most recent transaction of approximately $3.0 billion. The pool included approximately 13,700 loans that were previously delinquent, but are performing again with or without the use of a loan modification. Read More

Urban Institute Expects Single-Family Rental Financing to Grow

The demand for single-family rental financing will likely grow, said the Urban Institute, on the heels of Fannie Mae completing its first single-family rental securitization deal with a large institutional investor. The GSE has done smaller SFR transactions but this one, a $1 billion deal with Invitation Homes, was billed as a pilot program earlier this year. The Blackstone Group subsidiary, based in Dallas, has a portfolio of about 50,000 homes acquired from foreclosures. It is the largest single-family rental operator in the U.S. These kinds of transactions are expected to increase as investors rely more on leverage to earn an acceptable rate of return, said... Read More

GSE Roundup

Fannie DUS Provides Additional Data for Multifamily. Fannie Mae announced the creation of DUS Disclose, a new MBS disclosure website that will enhance the transparency and increase the data available for multifamily securities in alignment with the industry. The new platform will replace the existing Multifamily Securities Locator Service and is expected to be available in the fourth quarter of 2017. Fannie Headquarters to Morph into High-End Grocer. As Fannie Mae prepares to vacate its iconic headquarters with a move to downtown Washington in 2018, plans are coming along for the soon-to-be former site of the GSE. Roadside Development announced... Read More

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