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Inside The GSEs

July 6, 2018

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Purchase Market Springs to Life In 2Q18; Freddie Regains Share

Freddie Mac saw a strong rebound in its single-family business during the second quarter following a sluggish start to the year. Freddie guaranteed $82.23 billion of single-family mortgage-backed securities during the second quarter, a romping 28.6 percent increase from the first three months of the year. The GSE produced just $63.93 billion of MBS in the first three months of 2018, its slackest quarter in almost four years. Fannie’s single-family business was off slightly in the second quarter as MBS issuance declined to $111.36 billion – its weakest output since the first three months of 2016. [Includes two data charts.] Read More

Fannie Mae Servicer Seterus the Foreclosure King of California?

Seterus, a servicing vendor working for Fannie Mae, foreclosed on 2,762 homes in California during 2017, more than any other servicer – by far – according to a report issued by the California Department of Business Oversight. The year prior, Seterus, which is controlled by IBM, foreclosed on 4,265 units, the state found. The figures cover only firms that are California licensees. The runner-up in California foreclosures last year was Nationstar Mortgage with 1,410 actions, down 15.4 percent from 2016. Read More

Industry Experts Say Trump’s GSE Reform Proposal Is a Ways Off

Industry experts continue to weigh in on the White House’s proposal to privatize the GSEs and introduce multiple guarantors, but don’t anticipate action anytime soon. Analysts with Keefe, Bruyette and Woods said the proposed changes are similar to the Corker-Warner and Johnson-Crapo reform bills previously introduced in the Senate. Read More

Freddie Makes Condo Loans and Refis Eligible for Appraisal Waiver

Freddie Mac will now allow borrowers purchasing or refinancing a condominium to take advantage of its appraisal waiver. With condominium loans growing in popularity among first-time homebuyers, the GSEs are purchasing more of the product. As a result, Freddie announced last week it decided to expand the eligibility requirements. Fannie Mae has been offering its property inspection waiver to condominium borrowers since May. Read More

FHFA Anxious About Impact of New California Privacy Bill on Mortgages

Routine financial transactions involving mortgages could face extreme headwinds under a new consumer data privacy bill passed last week in California. So much so that it prompted the Federal Housing Finance Agency to urge state lawmakers to consider the implications of the legislation to the mortgage market. The controversial consumer data privacy bill passed on June 28. It would allow consumers to opt-out of any type of data collection and give consumers the right to have any personal information deleted. Read More

Pershing Square Tells Investors to Have Faith in the GSEs, Really

Pershing Square Capital Management, the largest holder of GSE common stock, is telling its shareholders to be patient with its investment in Fannie Mae and Freddie Mac, despite the drubbing the shares have taken this year. As Inside The GSEs went to press late this week, Fannie common was trading for $1.41 a share compared to a 52-week high of $3.31 and a low of $1.21. Freddie common was selling for $1.60. Its high for the year is $3.24, its low $1.20. Read More

GSEs Reduce UCD Requirements After Industry Feedback

After industry feedback, Fannie Mae and Freddie Mac decided to reduce the amount of seller data required on the Uniform Closing Dataset. The UCD is part of an ongoing effort by the GSEs to create a common industry dataset to support the Consumer Financial Protection Bureau’s Closing Disclosure form. The GSEs said they’ve spent the past several months working with the industry to understand the challenges lenders have collecting certain seller-specific closing data elements. Read More

Fitch Lowers GSE CRT Loss Projections for Second Half 2018

Fitch Ratings has lowered its loss expectations by an average of 20 basis points for Fannie Mae and Freddie Mac credit risk transfers for the second half of the year. Strong collateral performance coupled with increased home price appreciation and a shorter term to maturity has led to the lower loss projections. In fact, Fitch noted that home prices in the respective pools have increased by 20 percent on average since issuance and 3.5 percent since January. Read More

UI Suggests MH Borrowers Choose Mortgages Over Chattel Loans

One think tank is encouraging buyers of manufactured homes to choose mortgages over chattel loans to make the transaction more affordable while potentially increasing supply and demand. While most manufactured home buyers choose the more expensive chattel financing – where the loan is based on the property not the land, the Urban Institute said a good number of these buyers would actually qualify for a mortgage. Read More

GSE Roundup

Fannie Mae announced late last week it would provide a $26 million low-income housing tax credit equity investment to facilitate the construction of Far Rockaway Village, a 457-unit residential development in Queens, New York. Fannie will back the project through The Richman Group Affordable Housing Corporation, a Fannie LIHTC fund partner. ... Read More

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