Freddie Mac

Browse articles from all of our Newsletters related to Freddie Mac.

September 25, 2017 - IMFnews

GSE Seller Buybacks Edged Higher in 2Q17, but YOY…

All of the uptick in seller buybacks came from Fannie, where repurchases surged 21.5 percent from the first to the second quarter.


September 25, 2017 - IMFnews

As GSE ‘Zero Capital Day’ Approaches, Hurricane Damage Looms Large?

FHFA Director Mel Watt is concerned about zero capital, but has not yet given any public indication he will do something about it...


September 22, 2017 - Inside The GSEs

GSE Roundtop

GSEs. Congress should be the one that makes the ultimate decision on deciding the future of Fannie Mae and Freddie Mac, according to a just-completed poll from Inside Mortgage Finance. Roughly, 28 percent of industry professionals picked Congress as the ultimate decider with the Federal Housing Finance Agency coming in a close second at 25 percent. Treasury finished third in the poll at 18 percent. Then again, the fourth choice – “I wish we had another option, but we don’t” actually garnered the highest response at 29 percent. Wells Fargo Analysis of GSEs’ Portfolio. Wells Fargo said that the GSEs’ portfolio needs to be able to buy out seriously delinquent loans from mortgage-backed securities and provide


September 22, 2017 - Inside The GSEs

GSEs Detail Requirements for New High-LTV Refinance Product

Fannie Mae and Freddie Mac recently released more details on requirements for participating in their new refinance option for loans originated after Oct. 1. This option allows borrowers with high loan-to-value ratios to refinance. While the official start date is next month, the GSEs said that a minimum of 15 months must have passed between the note date of the existing loan and the start of the new loan. For example, if the mortgage is originated in October 2017, the note date of the new loan can be no earlier than February 2018. To participate, the loans must be owned or securitized by Fannie or Freddie and can include loans that are part of its risk-sharing structure.


September 22, 2017 - Inside The GSEs

Freddie CRTs Indicate G-Fees More Stable Than Private Sector Pricing

multifunctional in that they do more than just help take the risk off the GSEs. They’re also a good indicator for setting guarantee fees. Freddie Mac said CRTs are often indicative of what the private market would charge for the risk taken on by a GSE. And the appropriate level of g-fees has been an important issue in housing finance. “CRT is not only shifting risk away from taxpayers and creating new asset classes for investors it is a key benchmark for policy discussions by providing information about what the private capital markets would charge for absorbing the credit risk...


September 22, 2017 - Inside The GSEs

OIG: Complex Multifamily Market Needs Continued Monitoring

Inspector General recently released a paper about the need for continued oversight of activity in the growing GSE multifamily market. Combined, Fannie Mae and Freddie Mac purchased $112 billion in multifamily mortgages last year. The paper noted that while much of the reform discussion has focused on single-family housing, the GSEs’ role in the multifamily market is a critical aspect of the housing finance system. Market-wide multifamily originations, along with Fannie and Freddie purchases of multifamily mortgages, have grown to record levels in recent years, said the OIG. But multifamily mortgages are more complex to underwrite than single-family loans. “Underwriters of multifamily loans must understand the business and...


September 22, 2017 - Inside The GSEs

Freddie Mac Relaxes Appraisal Policies for Trainees

Freddie Mac has decided to buy mortgages with appraisals made by trainee appraisers. The GSE made the announcement in a recent bulletin updating appraisal requirements. Freddie said it made the change in response to seller inquiries. “We are also specifying that an unlicensed or trainee (or similar classification) appraiser may perform a completion report as long as a supervisory appraiser also signs the completion report,” said Freddie. The Loan Product Advisory tool has already been updated to reflect the change. The appraisal shortage likely played a role in that decision as Realtors and lenders complained about a lack of qualified appraisers and out-of-town appraisers not familiar with local market conditions incorrectly valuing homes.


September 22, 2017 - Inside The GSEs

Policing the Flood Insurance Policies, GSEs Say Loans Compliant

Despite reports showing that many homeowners lack required flood insurance policies, Fannie Mae and Freddie Mac said data show that most of their loans do have the appropriate coverage. Recent hurricanes in Houston and Florida revealed that borrowers either never had coverage or let their policies lapse. Flood insurance is a requirement for GSE loans in designated flood areas and the mortgage giants say that servicers are responsible for enforcing the policies. Nevertheless, getting to the root of the disconnect is complicated. Although the GSEs said it’s up to servicers to evaluate whether loans meet flood insurance requirements, they said they also have their own systems in place to help ensure compliance.


September 22, 2017 - Inside The GSEs

GSE Seller Buybacks Edged Higher In Second Quarter, Pipeline Shrank

Mortgage lenders that sell loans to Fannie Mae and Freddie Mac saw a modest increase in the volume of loans they repurchased from the GSEs during the second quarter of 2017, according to a new Inside The GSEs analysis of disclosure reports filed with the Securities and Exchange Commission. During the second quarter, lenders repurchased or made indemnifications on $244.44 million of single-family loans pooled in Fannie and Freddie mortgage-backed securities. That was up 2.5 percent from the first three months of the year. On a year-to-date basis, seller buybacks totaled $483.01 million, a 14.5 percent drop from the first six months of 2016.


September 22, 2017 - IMFnews

What We’re Hearing: A GSE ‘Black Swan’? / More TBTF, Perhaps / A Dividing Issue: Zero Capital / Will Mnuchin Cut a Deal with Speculators? / Waiting on a Ginnie Mae Nominee (Still) / A New Business Home for Anne Canfield

An impossible scenario, one that keeps Federal Housing Finance Agency Director Mel Watt up a night? We shall see...


September 22, 2017 - IMFnews

Trade Groups Tell Treasury and FHFA: Legislation for GSE Reform, No Recap and Release

In a research note published Friday, Cowen & Co. notes the letter is an indication these groups believe allowing the GSEs to retain capital will prolong the conservatorships.


September 22, 2017 - Inside MBS & ABS

MBS Trading Volume Remained Light In August; Maybe a Fed Exit Will Help

The average daily trading volume in agency MBS totaled a tepid $199.8 billion in August, the lowest reading since May, according to figures compiled by the Securities Industry and Financial Markets Association. Then again, volume wasn’t too far off trading activity in the prior two months, which came in at $200.5 billion and $200.9 billion. It appears that investors haven’t had...


September 22, 2017 - Inside MBS & ABS

Fed Announces MBS Reinvestments Will Begin to Slow in October, Next Rate Hike Seen in December

The great unwinding of the Federal Reserve’s massive intervention in the MBS market post-financial crisis is set to begin soon. This week, surprising no one, the U.S. central bank’s Federal Open Market Committee announced it will start to normalize its huge balance sheet next month along the parameters it first outlined in June. From October through December, the decline in the Fed’s securities holdings will be capped at $6 billion per month for Treasuries and $4 billion per month for agency MBS. Next year, the declines will gradually increase to $30 billion a month for Treasuries and $20 billion a month for MBS. Fed Chair Janet Yellen reiterated...


September 22, 2017 - Inside MBS & ABS

Non-Agency MBS Issuance Constrained by a Lack Of Supply, Some Investors Move on to Other Products

Issuance of non-agency MBS backed by newly originated home loans remains well below levels seen before the financial crisis. While new regulations have stopped some pre-crisis loan types from being originated, industry participants suggest that other major factors are also limiting the supply of loans available for MBS. Chris Helwig, a managing director at Amherst Pierpont, noted that banks are competing for prime jumbos and holding them in portfolio, and many borrowers who previously might have received subprime mortgages opt for FHA loans. “All that is left for non-agency MBS is...


September 22, 2017 - Inside MBS & ABS

Single-Family MBS Market Plugging Along, Banks And Overseas Investors Were Top Buyers in 2Q17

The supply of outstanding residential MBS in the market continued to grow at a measured pace during the second quarter of 2017, thanks to the robust single-family MBS machines at Fannie Mae, Freddie Mac and Ginnie Mae. A total of $6.675 trillion of single-family MBS was outstanding as of the end of June, according to a new Inside MBS & ABS analysis. That was up 0.8 percent from the end of March, and it represented a record 64.0 percent of outstanding single-family mortgage debt. The Federal Reserve this week reported that home loan debt outstanding rose 0.7 percent to $10.430 trillion during the second quarter. All the MBS growth was...[Includes three data tables]


September 21, 2017 - IMFnews

15 Groups Tell Treasury and FHFA: Legislation to Reform the GSEs, Not Some Recap Plan

The signors add: “We … believe the debate over recapitalizing a broken system distracts from the critical structural issues that Congress must address to ensure that the federally supported secondary market serves key, bipartisan objectives.”


September 21, 2017 - Inside Mortgage Finance

Minding the Flood Insurance Policy Gap, GSEs Say They Monitor Servicers Annually for Compliance

Although flood insurance is required for Fannie Mae and Freddie Mac loans in designated flood areas, the recent hurricane activity in Houston and Florida has revealed that a number of borrowers didn’t have the coverage they were supposed to have. But getting to the root of the disconnect is complicated. Both government-sponsored enterprises said that it’s up to servicers to evaluate whether loans are in compliance with flood insurance requirements. But Fannie and Freddie said they also have their own systems in place to help ensure compliance. “Servicers are required...


September 21, 2017 - Inside Mortgage Finance

With GSE ‘Zero Capital Day’ About Three Months Away, Possible Credit Reserves Become a Factor

Unless the Federal Housing Finance Agency acts soon, Fannie Mae and Freddie Mac will see their capital buffers fall to zero on Jan. 1, 2018. Having zero capital may not be a big deal, initially – but a new complication has arrived in the form of hurricanes Harvey and Irma. According to Tim Rood, chairman of The Collingwood Group, the government-sponsored enterprises are not looking at losses “that will cost tens of billions of dollars – but they don’t need to be. The capital buffer is small as it is. And if a credit event happens, it could wipe out the thin layer of capital they have in a hurry.” If Rood – a former Fannie executive – is correct, the GSEs might have...


September 21, 2017 - Inside Mortgage Finance

CFPB Listening to Mortgage Rule Concerns, Data On Impact to Consumers Could Lead to Changes

Lenders and investors at the ABS East conference this week hit officials from the Consumer Financial Protection Bureau with a number of complaints about the agency’s mortgage rules. The bureau officials suggested that data will have more of an impact on policy changes than general complaints. Patrick Orr, a policy analyst at the CFPB, reiterated that the bureau is accepting feedback and considering changes or guidance for the TILA-RESPA Integrated Disclosure rule, special qualified-mortgage standards that apply to loans eligible for sale to the government-sponsored enterprises and aspects of the ability-to-repay rule, among other issues. A representative from one lender said...


September 21, 2017 - Inside Mortgage Finance

Subservicing Contracts Continued to Grow Slowly In a Crowded Field That Could Lead to a Shakeout

Subservicing contracts topped $1.97 trillion at June 30, a 4.3 percent gain from March and a 28.2 percent jump over the past year, according to an exclusive Inside Mortgage Finance survey. Overall, roughly 19.9 percent of all residential loans are now being processed by these “outsourcing” vendors, who do not own the underlying strip of receivables and instead receive a portion of the servicing fee for doing all the grunt work. The subservicing sector continues...[Includes one data table]


September 21, 2017 - IMFnews

Short Takes: Waiting on a Wider Credit Box / A 30 Percent Jump for Nonconforming / 5,000 Active Loan Brokers for UWM / Don’t Count on Another Refi Boom Quite Yet / A New Hire for Altisource

Another refi spurt in the works? It may’ve looked that way a few weeks ago, but...


September 20, 2017 - IMFnews

Short Takes: Did Wells Dodge a Bullet on its CFPB Fine? / A ‘Recommendation Memorandum’ / No Effect on Wells’ Mortgage Business / Subject the CFPB to Appropriations / Stearns Goes ‘Digital’

Wells Fargo could have been subject to a whopping $10 billion fine...


September 19, 2017 - IMFnews

Short Takes: About Those GSE Dividend Payments… / The Man Wants to be Paid / Record Attendance at ABS East / LendingTree Buys Snap Capital / Webster Gets a New President

In other words, the FHFA will once again order the dividends to be paid to Treasury. Right?


September 19, 2017 - IMFnews

New Poll: Industry Says Let Congress Fix the GSEs

Congress is not expected to produce workable GSE legislation until next year and even then, other issues – tax reform, another run at fixing “Obamacare,” for example – could kick the can down the road.


September 19, 2017 - IMFnews

House FSC to Work on GSE Reform Again. (Hint: It Looks like the PATH Act)

At the ABS East show, Rep. Barr didn’t provide further details about Republican plans for the GSEs…


September 18, 2017 - IMFnews

Short Takes: MBA Wants a Change in HUD Reinspection Policies / Having an FHA Commissioner Might Help / Montgomery Resigns from Radian Board / DBRS Updates Due Diligence Criteria / A New Hire for Mortgage Network

The FHA nominee had been a Radian director since 2012…


September 15, 2017 - Inside MBS & ABS

Freddie Mac G-fee Pricing Taking Cues from Credit-Risk Transfers and the Private Market

Credit-risk transfers can be used to calculate guarantee fees because they’re indicative of what the private market would charge for the risk taken on by a government-sponsored enterprise, according to Freddie Mac. But the mortgage giant explained that g-fees are likely more stable than a system that relies exclusively on credit-risk transfers. Kevin Palmer, Freddie’s senior vice president of single-family credit risk transfers, said in a white paper the significant amount of credit risk being transferred to the private capital markets provides a way to calculate a market-implied g-fee. Since 2013, the GSE has transferred much of the credit risk on $760 billion of MBS it guarantees. Based on the pricing of Freddie’s Structured Agency Credit Risk transactions over the past year, the market-implied g-fee has been...


September 15, 2017 - Inside MBS & ABS

Mortgage Securitization Rate Sinks in 2Q17 as Primary Market Races Ahead of MBS Platforms

The seasonal surge in primary market mortgage originations stood in stark contrast to a slump in new residential MBS issuance during the second quarter of 2017. Mortgage lenders originated an estimated $455.0 billion of new first-lien loans during the April-June cycle, an 18.2 percent increase from the first three months of the year, according to estimates by Inside Mortgage Finance. But the secondary market generated just $294.7 billion in MBS backed by purchase and refinance loans – a 5.3 percent decline. The result was...[Includes one data table]


September 15, 2017 - Inside MBS & ABS

Treasury Discussing GSE Issues with Trade Groups; Multiple Guarantors, Capital Are on the Table

Over the past several weeks, the Treasury Department has been meeting with several industry trade groups about the future of Fannie Mae and Freddie Mac, discussing – among other things – what to do about the impending “zero capital” problem as well as the topic of multiple guarantors. Treasury’s goal, these officials said, is to come up with a workable blueprint on the future of the government-sponsored enterprises and the nation’s housing finance system – changes that might touch Ginnie Mae as well. Late this week there was...


September 15, 2017 - IMFnews

Mortgage Securitization Rate Sinks in 2Q17

Roughly 27.3 percent of Fannie Mae, Freddie Mac and Ginnie Mae loans pooled in securities in the first half of 2017 were a month old at issuance, and 6.4 percent were two or three months old.


September 15, 2017 - IMFnews

Treasury Taking Meetings on GSE Issues, Including Zero Capital and Multiple Guarantors

Rob Zimmer, a former Freddie Mac executive: “Republicans run this town, obviously, and there is no way they want to be identified as the party of taxpayer bailouts for large financial institutions.”


September 14, 2017 - Inside Mortgage Finance

Nonbanks Continue Market Takeover in 2017, Could Pose Risk to GSEs, FHA and Ginnie

The growing reliance on nonbanks could pose a risk to the government housing agencies, according to a recent study by the Urban Institute’s Housing Policy Center. Just four years ago, banks originated 70 percent of new mortgages, the researchers noted. But in 2017 nonbanks are originating 60 percent of all new mortgages and 76 percent of loans destined to be securitized by Ginnie Mae. UI called...


September 14, 2017 - Inside Mortgage Finance

Input on Proposed GSE Housing Goals Mixed, Housing Groups Want to See More Impact

The Mortgage Bankers Association, along with other housing trade groups, wants to make sure that Fannie Mae and Freddie Mac housing goals work in tandem with pending duty-to-serve requirements and multifamily volume caps to promote affordable housing. The MBA was one of about 10 groups that offered commentary on the proposed new housing goals for the government-sponsored enterprises for 2018 through 2020. The current goals expire at the end of the year. The Federal Housing Finance Agency released the proposed goals in June. The MBA said...


September 14, 2017 - Inside Mortgage Finance

The Chatter Continues on M&A. Prosperity Mortgage Has a New Parent (Warren Buffett)

Mortgage originators that produce $1 billion to $4 billion a year in loans are continuing to be courted by potential suitors, but not many sale agreements are getting signed these days, according to investment bankers. “Private equity firms are still looking to enter the business, and sellers are listening, but I’m not seeing too many deals being completed,” said Chuck Klein, a managing partner at Mortgage Banking Solutions, Austin, TX. At the beginning of the year, Klein was...


September 14, 2017 - Inside Mortgage Finance

Agency-Jumbo Production Sagged in 2Q17 While Non-Agency Sector Kept Growing

Deliveries of conforming-jumbo loans into mortgage-backed securities slowed during the second quarter of 2017, despite the solid increase in originations of non-agency jumbo loans, according to a new Inside Mortgage Finance analysis and ranking. During the second quarter, Fannie Mae, Freddie Mac and Ginnie Mae securitized $27.62 billion of single-unit mortgages that had loan amounts exceeding the $424,100 conforming loan limit. That was down 4.6 percent from the first three months of the year, a smaller drop than the 6.9 percent decline in total Fannie, Freddie, FHA and VA activity. But the non-agency jumbo market saw...[Includes three data tables]


September 14, 2017 - IMFnews

Senior Democrats on Senate Banking Committee Implore Treasury, FHFA to Allow GSEs to Build Capital

The correspondence, which includes the signature of ranking minority member Sherrod Brown, D-OH, notes: “We are simply requesting that the GSEs be permitted to build capital...."


September 14, 2017 - IMFnews

Agency-Jumbo Production Sagged in 2Q17 While Non-Agency Sector Kept Growing

But the non-agency jumbo market saw a healthy 18.6 percent increase in originations…


September 12, 2017 - IMFnews

On a Roll: Fourth Consecutive Monthly Gain for GSE MBS Issuance

Fannie and Freddie lost some market share during the second quarter, according to preliminary figures compiled by Inside The GSEs.


September 11, 2017 - IMFnews

Short Takes: More MSR Growth for PennyMac / PHH Ready for Massive Stock Buyback / Former FHLB Dallas Officials Indicted / Former Fannie Mae Exec Hisey Lands at Stewart

The U.S. Attorney for the Northern District of Texas indicted the former CEO of the Federal Home Loan Bank of Dallas, along with two other former bank employees, for fraud.


September 11, 2017 - IMFnews

International Monetary Fund Favors a Fannie-Freddie Merger

The IMF, of course, has no jurisdiction whatsoever over Fannie Mae and Freddie Mac…


September 11, 2017 - IMFnews

Hurricane Harvey Puts 300,000 Loans on the Line. Estimates Begin on Irma Damage

Black Knight estimates there are 1.18 million mortgaged properties in FEMA-designated disaster areas influenced by the hurricane...


September 11, 2017 - IMFnews

Appraisal Groups Tell Congress to Make GSEs Do Away with Waivers

As a result, they urge the GSEs to do away with the appraisal waiver program for now…


September 8, 2017 - Inside The GSEs

GSE Roundup

GSE Conservatorship Hits Nine Year Mark. It’s been nine years since the government placed Fannie Mae and Freddie Mac in conservatorship on Sept. 6, 2008. No one knew it would last this long. Industry groups, along with some lawmakers, are working hard to put the wheels in motion to come up with a more sustainable solution for the mortgage giants. GSE shareholders group Investors Unite suggested, “If Fannie and Freddie could start retaining their profits and rebuild adequate reserves, the Trump administration could lock in reforms already in place and implement others, creating a federal role in housing finance that protects taxpayers.” GSE Hearing Postponed


September 8, 2017 - Inside The GSEs

Groups Suggest FHFA Study Language Choice Question More

Trade groups continue to rally to prevent the Federal Housing Finance Agency from adding a language-preference question to loan applications. They said the suggestions, designed to assist borrowers with limited English proficiency, require more examination, but they don’t want it to delay implementation of the new Uniform Residential Loan Application.The FHFA extended the deadline for the comment period several times. It closed on Sept. 1. When the input period was extended in August, the FHFA updated the request for input with a presentation that describes the results of testing various language questions on the Uniform Residential...


September 8, 2017 - Inside The GSEs

Fannie Discusses Considerations For Proposed REMIC Structure

In anticipating a green light for the proposal to restructure its credit-risk transfer offerings as real estate mortgage investment conduits, Fannie details additional considerations ahead of the change. The GSE said that there have been no significant concerns raised, so far, and expects to close the feedback period soon. To help expand the CRT investor base, several months ago both GSEs announced a proposal to restructure Fannie’s Connecticut Avenue Securities and Freddie’s Structured Agency Credit Risk programs. This would also help attract a different kind of investor base that includes real estate investment trusts and help boost liquidity. The REMIC structure will help...


September 8, 2017 - Inside The GSEs

International Monetary Fund Calls For a Fannie, Freddie Merger

The International Monetary Fund proposed that Fannie Mae and Freddie Mac merge into a single enterprise. The IMF discussed ideas that it said could help stabilize the mortgage finance system in a working paper published late last month. The global Washington, DC-based organization said the GSEs should combine forces “as quickly as possible.” And, “Until this happens they should be forbidden to compete for business on the basis of price.” “The GSE regulator should be tasked with monitoring the enterprises to ensure consistency on this basis,” said the author of the paper, Richard Koss. He believes that the housing finance system is unnecessarily complicated, with Fannie and Freddie having selling guides of 1,408 and 2,303 pages, respectively.


September 8, 2017 - Inside The GSEs

ICBA Says Government Seizure of GSEs was ‘Questionable at Best’

The Independent Community Bankers of America issued a statement midweek questioning – nine years after the fact – the federal takeover of Fannie Mae and Freddie Mac, saying it was the government’s way of putting the two mortgage giants in a “time out.” ICBA said the move by the Bush administration on Sept. 6, 2008, was made to “help calm the fears of global investors of GSE mortgage-backed securities.” MBS issued by Fannie and Freddie have an “implicit” government guarantee, not an explicit one. However, before and since the takeover, the GSEs have never missed a bond payment to MBS investors. ICBA said, “After being put into conservatorship – an action that has since been proven to be...


September 8, 2017 - Inside The GSEs

Fannie, Freddie Issue Alerts for Back-to-Back Hurricanes

On the heels of making concessions for Houston area homeowners with property damaged by Hurricane Harvey, another storm threatens the housing industry this weekend. As Inside The GSEs went to press, Hurricane Irma was approaching the U.S., potentially hitting Florida and several southern states and prompting the GSEs to remind lenders and homeowners about their disaster-relief options for affected areas. Freddie Mac said it is monitoring the approach of Irma. “We stand ready to work with the nation’s servicers to ensure that mortgage relief is made available to homeowners who may be affected,” said Yvette Gilmore, Freddie’s vice president of single-family servicer performance management.


September 8, 2017 - Inside The GSEs

Appraisal Groups Tell Congress to Make GSEs Do Away With Waivers

Some three dozen appraisal trade groups are fighting to keep Fannie Mae and Freddie Mac from issuing waivers that eliminate the need for traditional home valuations. Earlier this year, the GSEs announced they would offer appraisal waivers on some refinance loans to borrowers who have at least 20 percent equity in their homes. And more recently Fannie and Freddie said that they will extend the waiver to include certain purchase loans as well. But the groups said first purchase transactions carry higher risk from a property information standpoint and, to make matters worse, the change comes at a time when markets are at all-time highs and risk mitigation should be tantamount.


September 8, 2017 - Inside The GSEs

Fannie/Freddie 1-Family MBS Business Up Again in August

Fannie Mae and Freddie Mac produced a total of $77.42 billion of new single-family mortgage-backed securities in August, their fourth consecutive monthly gain. August single-family MBS issuance was up 8.8 percent from the previous month at Fannie, and up 6.1 percent at Freddie. Their combined production represented a 7.8 percent increase from July. Although the two GSEs have seen steady growth in MBS issuance in recent months, production through the first eight months of 2017 was down 1.6 percent from a year ago. And other than January and February, every month in 2017 has yielded less new business than it did last year.


Poll

The year is almost 75% done. How is mortgage origination volume at your shop?

We will fund about the same as we did in 2016.
We will fund more than last year – by a little.
We will fund more than last year – by a lot.
We will fund less than last year – by a little.
We will fund less than last year – by a lot.

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