Agency MBS

Browse articles from all of our Newsletters related to Agency MBS.

August 17, 2018 - Inside The GSEs

GSE Roundup

Fannie’s Eighth RPL Sale. Fannie Mae began marketing its eighth sale of reperforming loans this week. It consists of approximately 18,400 loans, having an unpaid principal balance of $3.59 billion, and is available for purchase by qualified bidders. Reperforming loans are mortgages that were previously delinquent, but are performing again because payments ....

August 17, 2018 - Inside The GSEs

Fannie Warns of Expanding List of Fake California Companies

Fannie Mae issued its second fraud alert of the summer, warning lenders about borrowers using fake companies as their employers on loan applications. This time the fake companies seemed to have expanded their reach from southern California to Northern California.Ten more possibly fictitious companies have been found to be included on mortgage documents. The original alert included ....

August 17, 2018 - Inside The GSEs

More Oversight of GSE Multifamily Seller/Servicer Relationships

As the GSEs’ share of the multifamily market continues to grow, the Federal Housing Finance Agency wants them to take more precautions when selecting and monitoring their multifamily seller/servicers. The regulator issued an advisory bulletin this week outlining expectations for Fannie Mae and Freddie Mac to institute proper controls and perform monitoring to identify and manage risks associated with ....

August 17, 2018 - Inside The GSEs

Fannie, Freddie Could Need $77.6B Bailout in Extreme Economic Crisis

The Federal Housing Finance Agency’s recent stress test results show that the GSEs could need up to $77.6 billion in a severe economic crisis. But quarterly earnings continue to show a profitability that cancels out the need for a bailout. Required annually by the Dodd-Frank Act, the test of severely adverse scenario is based on Fannie Mae and Freddie Mac portfolios as of Dec. 31, 2017....

August 17, 2018 - Inside The GSEs

List of Clarifications Needed Prior To Single Security Launch

With the launch of the single security less than a year away, there are some uncertainties that Fannie Mae, Freddie Mac and the industry expect to have cleared up before making the switch next June. They range from ensuring fungibility between Fannie and Freddie securities, to creating more regulatory clarity, preparing third parties and determining how the Securities Industry and Financial Markets Association will consider the new security in the to-be-announced market....

August 17, 2018 - Inside The GSEs

Freddie Launches Mezzanine Loan Pilot to Help Workforce Housing

Freddie Mac launched a new pilot program geared toward keeping rents affordable for low-income and working families.The Mezzanine Loan program is different from other affordable housing efforts because it’s strictly voluntary and will offer lower cost financing to multifamily borrowers who agree to cap their rent increases for the life of the loan....

August 17, 2018 - Inside The GSEs

Watt Faces Controversy in Final Months as FHFA Director

Federal Housing Finance Agency Director Mel Watt has been under a lot of scrutiny as his tenure winds down by yearend. Some observers claim the FHFA is allowing the GSEs to introduce pilot programs that conflict with the primary market. There is a sexual harassment allegation against Watt. And he is reportedly being investigated for intimidating the agency’s inspector general....

August 17, 2018 - Inside The GSEs

Mayopoulos at Center of Recent IG Management Alert

A heavily redacted Federal Housing Finance Agency Inspector General management alert about credit scores, published in late July, involved Fannie Mae CEO Timothy Mayopoulos, sources confirm. The 15-page report only mentioned that a “senior executive” was involved in a conflict-of-interest administrative review pertaining to alternative credit scores. It said that the executive did not disclose “critical information” about potential conflicts of interest arising from a personal relationship. Based on the IG report, it seems that Mayopoulos did disclose and recuse himself from business decisions related to alternative credit scores. But the IG report appears to take issue with the fact that he did not “fully disclose” the information.

August 17, 2018 - Inside The GSEs

Purchase-Mortgage Boost Can’t Offset Falling Refi in July MBS

Fannie Mae and Freddie Mac issued a combined $65.85 billion of single-family mortgage-backed securities last month, a 1.0 percent decline from their June total, according to an Inside The GSEs analysis of MBS data. Compared to the first seven months of 2017, the GSE single-family business was down 7.4 percent as of the end of July. Most of the month-to-month slump was at Freddie, where MBS production fell 8.9 percent from June. Fannie managed a 5.0 percent increase in July. Both GSEs are off about the same on a year-to-date basis. [Includes two data charts.]

August 17, 2018 - IMFnews

What We’re Hearing: Two Giants May Change Hands (Or Maybe Not) / Job Cuts at Ditech / Can HL Sell Ditech Fast Enough? / Tom Marano’s Experience with Troubled Shops / CALCAP Bullish on Fix-and-Flip / A Confidential GSE File On…

It might be in Ditech’s best interest if Houlihan Lokey finds a buyer now while MSR values are still peaking…

August 17, 2018 - IMFnews

With GSE Single Security Launch Less Than a Year Away, TBA Eligibility Uncertain

Some key regulatory concerns remain unresolved or unclarified, according to SIFMA…

August 17, 2018 - IMFnews

Banks and Thrifts Retreat Slightly from MBS Market in 2Q18

Banks still favor Fannie Mae and Freddie Mac pass-through securities, but…

August 17, 2018 - Inside MBS & ABS

Ginnie Officials Describe Counterparty Risk Tools, Saying Everybody’s in the Same Boat

Ginnie Mae officials described a two-pronged approach to assuring MBS investors that the agency is protecting their interests from the risk that issuers might fail to deliver principal and interest payments in a timely manner.

August 17, 2018 - Inside MBS & ABS

With Single Security Launch Less than a Year Away, TBA Eligibility Is Still Up in the Air

Fannie Mae and Freddie Mac appear to be on track for a June 2019 launch of the new uniform MBS, but the Securities Industry and Financial Markets Association has yet to issue a formal declaration on to-be-announced eligibility for UMBS.

August 16, 2018 - Inside Mortgage Finance

Loans Originated After October Can Refi Soon Under New Fannie, Freddie High-LTV Programs

The government-sponsored enterprises’ new high loan-to-value refinance options will kick into gear for applications received on or after November 1. These programs serve as a replacement for the popular Home Affordable Refinance Program set to expire at the end of the year.

August 16, 2018 - IMFnews

Short Takes: The BRAWL Continues / Don’t Worry About the Broker / An Old Complaint / Broker Market Share / Who Caused the Mortgage Crisis? / Brian Brooks, a Candidate for the Fannie CEO Job? (Probably Not)

But we will remind readers that wholesalers refinancing clients (via a retail arm) originally brought to them by a broker is a decades-old complaint…

August 16, 2018 - IMFnews

Jumbo Originations Up Sharply in 2Q18

Wells Fargo, JPMorgan Chase and Bank of America were the top producers of jumbo loans in the second quarter…

August 15, 2018 - IMFnews

Short Takes: Who Needs the GSEs? / JPM’s Strategy / Subservicers on the Auction Block? / New Diligence Advisors Gets the Seal of Approval from KBRA / Atlantic Bay Mortgage Won’t be Buying VA Bank After All

We know of one large subservicer that’s for sale (Ditech Financial), but a second processor may also be considering offers.

August 15, 2018 - IMFnews

The Fannie Mae Mystery Executive in the Heavily Redacted FHFA IG Report: CEO Timothy Mayopoulos

On July 23rd, Fannie announced Mayopoulos would depart as CEO before yearend. The heavily redacted FHFA IG report is dated July 26.

August 14, 2018 - IMFnews

Short Takes: GSE Nonprime Holdings Keep Shrinking / However… / Production Remains Strong at UWM / LendingTree’s Share Price: Down, Down, Down / Lenders One Promotes Kuentz to CEO

Fannie and Freddie stopped acquiring nonprime mortgages during the financial crisis, but they haven’t completely avoided the loans...

August 13, 2018 - IMFnews

IMA Working on $20 Billion MSR Transaction

The top five sellers of bulk agency product during the first-half of 2018 were Stearns Lending, Flagstar Bank, Seneca Mortgage, United Shore Financial (parent of United Wholesale Mortgage), and loanDepot.

August 13, 2018 - IMFnews

Why Mayopoulos’ Senior Lieutenants Will Turn Down the Fannie Mae CEO Job

Mayopoulos didn’t even earn a performance bonus in 2017, despite a companywide pre-tax profit of $18.4 billion.

August 10, 2018 - Inside FHA/VA Lending

Around the Industry

Fannie Mae Updates HECM Servicing Manual. Fannie Mae has updated its Reverse Mortgage Loan Servicing Manual to include changes related to real estate-owned hazard-insurance requirements. The policy change applies only to Home Equity Conversion Mortgage REO. The revised manual now requires that, for HECM loans, the servicer must place a property insurance policy on the acquired property in accordance with Department of Housing and Urban Development guidelines. Coverage must be up to the HUD foreclosure appraisal amount or the deed-in-lieu property valuation amount. Should the servicer be unable to obtain a HUD foreclosure appraisal or deed-in-lieu property valuation, it must place coverage in accordance with HUD guidelines and up to the unpaid principal balance amount. Fannie encouraged immediate servicer implementation of the policy. However, the ...

August 10, 2018 - Inside FHA/VA Lending

Quicken Loans Launches Higher Limit Reverse Mortgage Product

Quicken Loan has announced a new reverse mortgage alternative that offers more flexibility and features than FHA’s Home Equity Conversion Mortgage product. Simply called HELO, the Home Equity Loan Optimizer is available through Quicken’s reverse-mortgage retailer, One Reverse Mortgage. It will soon be available through the wholesale broker channel as well, according to Gregg Smith, president and CEO of One Reverse Mortgage. HELO’s best feature is its higher loan limit of up to $4 million, which particularly benefits equity-rich seniors, compared to the maximum claim amount for an insured HECM, which is $679,650, or 150 percent above the Freddie Mac conforming loan limit. Unlike HECMs, HELO allows seller concessions as well as debt consolidation to be paid off at closing, which is prohibited in traditional HECMs. To qualify, borrowers must have a minimum credit score ...

August 10, 2018 - Inside FHA/VA Lending

USDA Issuance Down at Midpoint From 2017, Up in Second Quarter

Fewer rural single-family mortgages and modified home loans with a USDA guarantee were securitized during the first six months of 2018 compared to last year. Delivery of USDA loans into Ginnie Mae pools over the last two quarters totaled $8.6 billion, down 10.1 percent from the same period last year but up 12.4 percent in the second quarter from the prior period. PennyMac topped all USDA issuers with $1.7 billion worth of rural housing MBS issued during the first half of 2018, up 22.1 percent year-over-year. New issuance also rose 30.0 percent in the second quarter from the previous quarter, enough for a 20.2 percent share of the securitized USDA market. ... [chart]

August 10, 2018 - Inside FHA/VA Lending

Senate Passes FY 2019 T-HUD Bill, Preserves Previous Funding Levels

On Aug. 1, the U.S. Senate voted 92-6 to pass a four-bill appropriations package that includes FY 2019 funding for the Department of Housing and Urban Development and the U.S. Department of Agriculture housing programs. The bill passed without changes to program funding levels previously approved by Senate appropriators. The House Appropriations Committee has approved FY19 spending bills for both HUD and USDA. The full House, which is away for the summer break until Sept. 4, has not yet voted on the package. The Senate bill retains the previous fiscal year’s $400 billion in new loan commitments in the FHA Mutual Mortgage Insurance Fund and $30 billion for the general insurance and special risk insurance program, which include special purpose single- and multifamily loans, multifamily rental housing and condominiums. The bill also sets aside $550 billion for Ginnie Mae ...

August 10, 2018 - IMFnews

Short Takes: Fannie Warns About Fake Employers / Freddie Launches Rent Control Pilot / Affordability Worsens in CA / MBA Talks Industry Themes

Fannie Mae issued another fraud alert, this time warning lenders about 10...

August 10, 2018 - Inside MBS & ABS

GSE Shareholders Propose New Theory in Their Challenge To Net Worth Sweep Focusing on FHFA Constitutionality

Fannie Mae and Freddie Mac shareholders are working to make sure their cases against the government don’t get shoved aside after a string of adverse court decisions. Plaintiffs are looking to tweak their complaint to include a challenge based on a ruling in another case that the Federal Housing Finance Agency structure is unconstitutional.

August 10, 2018 - Inside MBS & ABS

Help Wanted: $3 Trillion MBS Guarantor Seeks New CEO, Must be Able to Live on $600K a Year

Fannie Mae is in the hunt for a new CEO to replace current chief Timothy Mayopoulos, but finding just the right candidate could prove difficult because of a $600,000 salary cap placed on the position back in 2015 by Congress.

August 10, 2018 - IMFnews

Bulk Servicing Sales Continue at a Brisk Pace. A Record Year?

IMA and MountainView expect to trade more product this year than last…

August 10, 2018 - IMFnews

GSE Shareholders Propose New Theory in their Legal Challenge: the FHFA is Unconstitutional

Legal argument: If the FHFA is unconstitutional, then the net worth profit sweep must be…

August 9, 2018 - IMFnews

House Subcommittee Plans Hearing on ‘Waste, Fraud and Abuse’ Allegations at the FHFA. The GSEs?

There was no mention of Freddie Mac’s CEO, Don Layton.

August 8, 2018 - IMFnews

Short Takes: Brother, Can You Spare $77.6 Billion? / If Things Get Rough, This is How Much Money I Might Need / Define ‘Severely Adverse’ Scenario / The Wells Fargo Mortgage Layoff Tally for July / Fannie Director Departs

But the bailout calculations – mandated under the Dodd-Frank Act Stress Tests – were not done by the FHFA.

August 7, 2018 - IMFnews

Lobbying on the GSE Issue Moves from Congress to the Executive Branch

Earlier this year, Treasury Secretary Steven Mnuchin told the Senate Banking Committee he has the authority to restructure Fannie and Freddie without any change in law.

August 7, 2018 - IMFnews

Nonbank Market Share of Ginnie MSRs: 59.9 Percent and Growing

Wells Fargo’s agency servicing volume dropped by $9.4 billion…

August 6, 2018 - IMFnews

Short Takes: Moving up the Search? / FHFA Watchdog Under Investigation? / No One is Commenting – or Denying / Politically Motivated? / Mangiaracina Gets Chairman’s Slot

As of Monday morning, none of the parties involved – FHFA, the FHFA IG, and the Council – were commenting to IMFnews. Nor were they denying the existence of an investigation.

August 6, 2018 - IMFnews

Treasury Gives Blessing to GSE Appraisal Waivers, More. But Moody’s Worries About AVMs

The Treasury report acknowledges concerns from the appraisal industry but touts the benefits of using the waivers…

August 6, 2018 - IMFnews

Secondary Market in Servicing Rights Gained Momentum in 2Q18

In 2Q18, there was a huge increase in bulk Fannie MSR transfers…

August 3, 2018 - Inside The GSEs

GSE Roundup

Capital Proposed Rule Comment Period Extended to November. The Federal Housing Finance Agency announced this week that it is extending the public comment period for the agency's proposed rule on Enterprise Capital Requirements by an additional 60 days. The previous deadline for comments was Sept. 17, 2018. The new deadline will be Nov. 16, 2018. FHFA extended the public comment period “due to the high level of interest in the proposed rule and requests from multiple stakeholders for more time to evaluate it.” GSE shareholders group Investors Unite, said, “However complex capital standards are, professionals who dwell in this policy area every day should be able to offer their views within a three-month window.”

August 3, 2018 - Inside The GSEs

GSEs Update Mortgage Insurance Termination Policies

The GSEs have recently updated their policies as they look to simplify borrower-initiated requests to cancel private mortgage insurance coverage. Fannie is the latest to announce plans to update the various methods it uses for verifying current property values and said it will require servicers to implement the new policy by March 1, 2019. Borrower-initiated requests to terminate mortgage insurance based on the home’s original value no longer need to depend on servicers to warrant the property value, under Fannie’s new policy. The GSE said lenders can use the GSE’s Automated Property Service tool to verify the current...

August 3, 2018 - Inside The GSEs

GSE Footprint in Multifamily Mortgages Causes Concern

Multifamily purchase volume continued to surge for the GSEs in the second quarter. But as the mortgage giants maintain their large footprint in the multifamily market, some industry observers allege mission creep. During the second quarter, Fannie Mae provided $14.5 billion in multifamily financing, up from $11.3 billion in the first quarter of 2018. Freddie Mac also increased its volume in the second quarter and provided $15.8 billion in multifamily credit, up from $13.0 billion in the first quarter. Second-quarter numbers are a good indicator that even at the midway point in 2018, the GSEs are on track to meet or surpass last year’s financing volume.

August 3, 2018 - Inside The GSEs

Fannie Mae Launches SOFR as LIBOR Alternative

As the financial markets begin transitioning from the London Interbank Offered Rate, which is set to go away in 2021, Fannie Mae became a pioneer in a replacement index by issuing Secured Overnight Financing Rate (SOFR) securities. The government-sponsored enterprise announced that the three-tranche $6 billion SOFR debt transaction was created to accelerate the development of the SOFR market. And Fannie encourages other issuers in debt markets to follow. The inaugural transaction garnered strong investor demand for the floating rate notes from a diverse investor base, according to Fannie.

August 3, 2018 - Inside The GSEs

FHFA OIG Management Alert Explores Credit Score Conflict

A senior executive at Fannie Mae is involved in a conflict-of-interest administrative review pertaining to alternative credit scores, according to a Federal Housing Finance Agency Office of Inspector General management alert. The 15-page alert, published on July 26, is heavily redacted. It noted that an executive did not disclose “critical information” about potential conflicts of interest. The IG said the person failed to make a timely and complete disclosure about a potential conflict of interest and asked the FHFA to take appropriate disciplinary action. “FHFA’s decision whether to accept an alternative credit scoring model for the enterprises is a high-stakes decision, with long-term impact,” said the OIG.

August 3, 2018 - Inside The GSEs

FHFA-OIG Examines Decision-Making Authority Changes

The Federal Housing Finance Agency Office of Inspector General said the GSE boards’ undelegated authority has changed significantly over the past five years. Some items like seller/servicer master agreements no longer need FHFA approval. In a white paper published last week, the IG examined the Federal Housing Finance Agency’s letters of instruction (LOI) to the boards of Fannie Mae and Freddie Mac. The letters were initiated at the start of the conservatorship in 2008, revised in 2012 and updated again in December 2017. They are sent to the GSE boards to define and...

August 3, 2018 - Inside The GSEs

Treasury Supports GSE Appraisal Waivers, Makes Recommendations

Fannie Mae and Freddie Mac have the Treasury Department’s support when it comes to appraisal waivers, according to a newly published report this week from the Treasury on nonbank financials, fintech and innovation. A portion of the report focused on updating activity-specific regulations under the realm of lending and servicing. Treasury explained that it supports the GSEs’ efforts to implement standardized appraisal reporting, their adoption of proprietary electronic portals to submit appraisal forms and the GSEs’ limited adoption of appraisal waivers. The report acknowledged concerns from the appraisal industry but touted the benefits of using the waivers. “While Treasury acknowledges that

August 3, 2018 - Inside The GSEs

Fairholme Loves the GSEs, But No Help to Bottom Line, Not Yet

In a new semi-annual letter issued to shareholders this week, Fairholme Capital Management blamed the weak first-half performance of the Fairholme Fund on its investment in Fannie Mae and Freddie Mac preferred shares, while telling investors the GSEs’ businesses are “stronger than ever.” The Fairholme Fund decreased in value by 8.49 percent in the first half of 2018, while the S&P gained 2.65 percent, according to the shareholder letter. The investment in Fannie/Freddie accounts for 16.6 percent of the Fairholme Fund’s net assets. Headed by investment banking veteran Bruce Berkowitz, Fairholme is betting heavily on a recent promise made by the Trump administration to end the almost 10-year-old conservatorships with the hope the two will reemerge as shareholder-owned companies.

August 3, 2018 - Inside The GSEs

Fannie CEO to Step Down by Yearend, Board Focuses on Replacement

Fannie Mae’s CEO Timothy Mayopoulos is leaving his post by the end of this year after being with the GSE since 2009. Fannie announced his departure last week along with a new leadership structure. Mayopoulos became CEO in 2012 after being promoted from chief administrative officer and general counsel. He will remain on board until the end of 2018 and work with the board of directors to make sure the transition is seamless. During his tenure, Fannie has been profitable each year. “For Fannie Mae, it has been a decade of reform and fundamental change.

August 3, 2018 - Inside The GSEs

Fannie and Freddie Report $7.0 Billion in Combined Profits for 2Q

The GSEs posted a combined net profit of $6.96 billion for the second quarter, with Fannie accounting for the lion’s share having earned $4.46 billion. The combined number is down slightly from the $7.19 billion recorded for the first quarter. Fannie Mae’s chief financial officer, Dave Benson, attributed the 4.6 percent quarterly increase partly to higher credit-related income. [Includes one data chart.]

August 3, 2018 - Inside Mortgage Trends

Secondary Market in Servicing Rights Gained Momentum in Second Quarter

Sales of agency mortgage servicing rights were up in the second quarter, mostly as a result of heavier coissuance volume, according to an exclusive new Inside Mortgage Trends analysis and ranking. Servicing rights on $129.57 billion of agency mortgages changed hands during the second quarter, up 6.4 percent from the first three months of the year. The data are culled on Fannie Mae, Freddie Mac and Ginnie Mae mortgage-backed securities ... [Includes three data charts]

August 3, 2018 - IMFnews

What We’re Hearing: Fannie Mae’s Next CEO Might Be… / Thanks Congress / Amazon Still in the Hunt? / The Top Gainer: Fairway Independent Mortgage / Talking to Ed DeMarco / Gateway Gets a New CEO

No wonder why Fannie and Freddie topped Business Insider’s list of the most profitable companies per employee…


With mortgage production down noticeably this year from 2017, how many lenders might disappear via M&A or failure during the next 12 months?

10% or less. It’s not that bad out there.


11% to 25%. It’s a challenging market.


25% to 40%. It’s going to be very ugly.


No opinion.