Browse articles from all of our Newsletters related to GSEs.

October 20, 2017 - Inside The GSEs

GSE Roundup

Preferred Language Question Added to the URLA. The Federal Housing Finance Agency announced on Oct. 20 that it decided to add a preferred language question to the redesigned URLA. The regulator noted that the question will enable borrowers who prefer to communicate in a language other than English to identify that language. They said that it also provides clear disclosures that the mortgage transaction is likely to be conducted in English and that language resources may not be available. FHFA Director Mel Watt said following stakeholder outreach and input the agency has taken steps to mitigate concerns about the inclusion of a language preference question. Fannie Exec Withdrew Treasury Job Consideration. Brian Brooks, Fannie’s general counsel, decided to opt out of being...

October 20, 2017 - Inside The GSEs

New Freddie Credit-Risk Transfer Offering Expands on STACR

Freddie Mac announced a new credit-risk transfer program this week that expands on the GSE’s popular Structured Agency Credit Risk offering and is more conducive to a variety of investor types, including real estate investment trusts. The $50 million STACR- Securitized Participation Interests transaction is unique in that it is backed by mortgage loans. “STACR SPI is another offering in our CRT toolbox to help shift risk away from taxpayers and give more options to investors who prefer a securitization backed by mortgage-related assets,” said Mike Reynolds, vice president of credit risk transfer.

October 20, 2017 - Inside The GSEs

Analyst Says FHA Could Become Bigger Fannie, Freddie Competitor

The FHA could be in position to become a much bigger rival to Fannie Mae and Freddie Mac, according to one analyst, basing his observation on U.S. Department of Housing and Urban Development Secretary Ben Carson’s comments late last week. Jaret Seiberg, analyst with the Cowen Washington Research Group, said implications Carson made in regards to the False Claims Act and premium cuts led him to believe that the FHA may give the GSEs a run for their money competition wise. During his testimony before the House Financial Services Committee, Carson said that the Trump administration is working to change the False Claims Act policy...

October 20, 2017 - Inside The GSEs

GSEs Eliminate and Replace Imminent Default Test

Freddie Mac and Fannie Mae will have a new evaluation process for determining whether a borrower is eligible for a conventional mortgage loan modification as of July 1, 2018. The GSEs noted that the new imminent default evaluation process was designed to simplify the process for servicers and borrowers to better identify those who need assistance. This new evaluation process was developed at the direction of the Federal Housing Finance Agency and it will replace the current Imminent Default Indicator test introduced by Freddie in 2010. In order for a borrower’s monthly payment to be considered in imminent default for eligibility...

October 20, 2017 - Inside The GSEs

OIG Lists FHFA Recommendations Still Open, Unimplemented

Since the Federal Housing Finance Agency Office of the Inspector General was launched in 2013, the OIG said it has made more than 375 recommendations to the FHFA to improve efficiency and reduce fraud. To keep track of its long-running list of recommendations, including those that are currently opened and those that were rejected and not implemented by the agency, the OIG published a compendium of recommendations that covers up to Oct. 1, 2017. “OIG typically relies on materials and representations from the agency to close its recommendations and may close some recommendations based on the agency’s representations as to the corrective actions it has...

October 20, 2017 - Inside The GSEs

Freddie Pilots Program to Help Borrowers with Timely Payments

Freddie Mac teamed up with a financial technology company in a pilot program aimed at helping low and moderate-income borrowers with their loan payments. Last week, the GSE announced its partnership with EarnUp, a platform that assists consumers with making their payments on time and gives personal recommendations on paying down their debts. Freddie and EarnUp believe that borrowers are more likely to stay current on their loan payments if they are given a quick and easy option to do so. By working with one of three non-profit housing counseling organizations, Freddie said that consumers can take advantage of EarnUp for 12 months with no cost.

October 20, 2017 - Inside The GSEs

Federal Reserve Highlights FHLBank Trends, Concerns

The Federal Home Loan Banks have grown over the past few years with their total assets surpassing pre-crisis levels, according to a new Federal Reserve report analyzing recent trends and the increased role of the FHLBank system. The Fed noted that the growth coincided with two government policies: the imposition of the Liquidity Coverage Ratio in 2015 and the reform of money market funds a year later. Large banking institutions now have an incentive to borrow more from FHLBanks and less from private short-term money markets thanks to the preferential treatment in the LCR. Also, while FHLBank use of short-term funding has seen an uptick for several years, the report noted...

October 20, 2017 - Inside The GSEs

FHFA Reports on Fannie and Freddie SF Guaranty Fees

GSE guaranty fees were down slightly in 2016 with the average fee falling from 59 basis points to 57 basis points, according to a new Federal Housing Finance Agency report published this week. But the pricing decline wasn't due to changes in the credit risk of loans. The drop reflected FHFA’s decision to establish minimum g-fees that took effect in November 2016. The report noted that the lower fees led to a larger negative gap, which reflects expected returns slightly below the target returns. “The average guarantee fee in 2016 on fixed-rate, 30-year loans fell by 2 bps to 61 bps; the fee on fixed-rate, 15-year loans fell by 4 bps to 37 bps.

October 20, 2017 - Inside The GSEs

Watt Continues to Warn of Treasury Draw in Reply to Trade Groups

Federal Housing Finance Agency Director Mel Watt said the likelihood of a draw from Treasury is growing fast in a reply letter to the 15 trade groups that wrote late last month advocating for legislation instead of recapitalization. Watt reiterated his position in the Oct. 12 letter and said while he appreciates their views, he has expressed “repeatedly and publicly” that the declining capital buffers leave Fannie Mae and Freddie Mac with no ability to absorb potential losses. “FHFA is concerned that in the absence of a sufficient buffer, normal operating losses, such as from interest rate volatility and the accounting treatment of...

October 20, 2017 - Inside The GSEs

A ‘Perfect Storm’ of Good News Should Result in Strong GSE 3Q

Fannie Mae and Freddie Mac are poised to report robust earnings for the third quarter, likely blowing past results of the prior two periods, according to an analysis by Inside The GSEs. The only question now is this: Just how good will it be? “And most of that money will be swept into the Treasury,” noted Tim Rood, a former Fannie Mae executive who now heads The Collingwood Group. Not only did the GSEs benefit from a strong origination and MBS issuance market in 3Q17, but a previously announced legal settlement with Royal Bank of Scotland will finally hit the books.

October 20, 2017 - Inside The GSEs

Fannie MBS Servicing Grew Faster Than Freddie MSR in Third Quarter

Most servicers of Fannie Mae and Freddie Mac single-family mortgage-backed securities saw growth in their servicing portfolios during the third quarter, but a handful of top banks continued to buck the trend. A new Inside The GSEs analysis of MBS disclosures shows $4.629 trillion of Fannie/Freddie servicing outstanding at the end of September. That was up 1.8 percent from the previous quarter, with Fannie (up 2.1 percent) gaining market share on Freddie (up 1.3 percent). Ginnie Mae servicing remained a faster-growing market, with $1.749 trillion outstanding, up 2.2 percent from the end of June. Large banks continued to show tepid interest in the GSE servicing market.

October 20, 2017 - IMFnews

GOP Critical of Fannie/Freddie QM Exemption

FHFA chief Mel Watt acknowledged the advantage provided to GSE-eligible mortgages...

October 19, 2017 - IMFnews

Freddie Mac Pushes Back Against Criticism on Its Use of Equifax

However, officials at Freddie said the claims regarding the GSE and Equifax lacked context.

October 13, 2017 - Inside Nonconforming Markets

Republicans Critical of GSEs’ QM Exemption

A number of Republicans raised concerns last week about the exemption from qualified mortgage standards currently provided to mortgages eligible for sale to the government-sponsored enterprises. Loans must meet a number of standards to receive QM protections, including having a debt-to-income ratio below 43 percent. However, under the ability-to-repay rule from the Consumer Financial Protection Bureau that took effect in 2014, mortgages eligible for sale to Fannie Mae and Freddie Mac can receive QM status even if they have DTI ratios above 43 percent. The exemption is known as the “GSE patch.”

October 13, 2017 - IMFnews

What We’re Hearing: FHFA Chief Has a ‘Number of Options’ on Zero Capital / Is That a ‘Hard’ Deadline? / Once Tax Reform is Done, Next Up: the GSEs / Can HUD Secretary Carson Get the IG to Back Off on the FCA? / Ocwen Kills Wholesale. Meaning?

Meanwhile, one detail about the capital buffer falling to zero remains unclear: On Jan. 1 will every single penny of the $600 million (at each) be carted away?

October 13, 2017 - Inside MBS & ABS

GSE Shareholders More Confident As Judge Releases New Government Documents to Plaintiff Attorneys

As Fannie Mae and Freddie Mac shareholders inch closer to having hundreds of government documents released in pending shareholder lawsuits surrounding the conservatorship and preferred stock purchase agreement, they are more confident the court will rule in their favor. In the latest development in Fairholme Funds v. the United States, Federal Claims Court Judge Margaret Sweeney last week granted a motion to compel the disclosure of documents filed over the summer by ...

October 12, 2017 - Inside Mortgage Finance

GSEs Continue Adapting Seller Requirements To Conform With Pending HMDA Changes

Efforts by Congressional Republicans to expand exemptions to the Consumer Financial Protection Bureau’s new Home Mortgage Disclosure Act data collection and reporting requirements may or may not succeed. But any lender or aggregator seeking to sell eligible mortgages to the government-sponsored enterprises will still have to get with the program. Fannie Mae and Freddie Mac continue to tweak their systems and processes to accommodate the new mandates, scheduled to kick in Jan. 1 ...

October 12, 2017 - Inside Mortgage Finance

FHFA Wants Fannie, Freddie and FHLBanks To Beef Up Their Cybersecurity Programs

The Federal Housing Finance Agency wants the government-sponsored enterprises and the Federal Home Loan Banks to hire chief information security officers to head their cybersecurity programs. The new directive was released just after the FHFA Office of Inspector General issued an audit faulting the regulator’s oversight of cybersecurity issues, and in the wake of further revelations about data breaches at Equifax and other large enterprises. The FHFA said Fannie Mae, Freddie Mac and the ...

October 12, 2017 - Inside Mortgage Finance

Agency MBS Data Show Private MI Business Kept Growing in 3Q17, FHA Activity Lagged Behind

Private mortgage insurers captured a larger share of the purchase-mortgage market during the third quarter of 2017 as the credit profile of new FHA production tilted toward riskier business, according to a new Inside Mortgage Finance analysis. Fannie Mae and Freddie Mac securitized $64.59 billion of purchase loans with private MI coverage during the third quarter, a 28.5 percent jump from the previous period. That was substantially greater than the ... [Includes three data charts]

October 12, 2017 - IMFnews

Short Takes: Residential Production Plunges at Citi / MSR Holdings Down Too / But a Nice Profit for 3Q17 / JPMorgan Readies New Non-Agency MBS / Ocwen Exiting Wholesale Channel / Fannie Announces New NPL Auctions

Citi’s third-party servicing portfolio is down to $49.1 billion from $147.6 billion at Sept. 30, 2016...

October 12, 2017 - IMFnews

GSEs Continue Adapting Seller Requirements to Conform with HMDA Changes

Fannie and Freddie continue to tweak their systems and processes to accommodate the new mandates, which kick in January 1…

October 11, 2017 - IMFnews

GSEs Unaffected by Deloitte’s Computer Break-In

A Freddie spokesman noted: “We take cyber-security seriously as it relates to every aspect of our business.”

October 11, 2017 - IMFnews

Fannie MH Pilot Program Could Boost This Niche Market

While the pilot is limited to New Hampshire home buyers, Fannie thinks the pilot could open the door to other states doing something similar…

October 11, 2017 - IMFnews

The GSEs Should Report Robust Earnings for 3Q17. Here’s Why…

A previously announced legal settlement with Royal Bank of Scotland will soon hit the books...

October 10, 2017 - IMFnews

Short Takes: CIT Will Take Hefty Hit on Sale of Financial Freedom / OneWest’s Roots / Fannie and Freddie Affected by Deloitte Hack? / ALTA Unveils Registry / A New Hire for Platinum

CIT Group will take a charge of up to $50 million on the sale of Financial Freedom...

October 9, 2017 - IMFnews

Judge in Closely Watched GSE Shareholder Case Moves to Release More Documents

The plaintiffs have long argued that the government is trying to keep roughly 1,500 documents hidden under the deliberative process and bank examination privileges.

October 9, 2017 - IMFnews

GSE Purchase-Loan Share Hit 63 Percent in 3Q17, a 10-Year High

The flow of home loans for first-time buyers was up a robust 24.7 percent on a sequential basis…

October 6, 2017 - Inside The GSEs

GSE Briefs

Freddie Simplifies Creation of Giant PCs. Late this week, Freddie Mac announced that it is adding new features to Dealer Direct, its online securitization portal, which will make it easier and faster for dealers to create customized Giant participation certificates. The new Dealer Direct Giant bulk upload feature allows dealers to upload proposed collateral for multiple Giants in a single collateral submission. A unique identifier is used to designate collateral for each Giant. Dealers also now have the option to upload a list of fixed-rate and/or adjustable-rate mortgage collateral without designating securities to specific Giants. Dealer Direct will analyze the individual securities and sort them into the largest possible Giant-eligible groups.

October 6, 2017 - Inside The GSEs

FHFA Releases FY18 Performance, Long-Range Strategic Plan

The Federal Housing Finance Agency published two reports last week, including a 2018 annual performance plan for overseeing the GSEs and the FHLBanks in 2018, which includes talk of the common securitization platform. The performance plan supports the FHFA’s long-range strategic plan, also released last week, and includes goals, performance measures and targets, and strategies to accomplish those goals. The regulator is charged with three goals that center on safety and soundness of the regulated entities, along with ensuring liquidity and access in housing finance and managing the conservatorships. The goals and strategies haven’t changed much from the performance plan this year, other than the goal for the single security.

October 6, 2017 - Inside The GSEs

OIG: FHFA’s Cybersecurity Management of GSEs Inefficient

On the heels of the Equifax data breach fiasco, the Federal Housing Finance Agency was deemed ineffective when it comes to supervising the GSEs on cybersecurity risks, according to a recent report from the agency’s Office of Inspector General.  In a previous report, the OIG asked the FHFA to examine policies about how Fannie Mae and Freddie Mac manage their cyber risks and address vulnerabilities. It noted that the GSEs store, process and transmit significant amounts…

October 6, 2017 - Inside The GSEs

Federal Home Loan Bank Affordable Housing Activity Grows

The Federal Home Loan Banks increased their support for affordable housing in 2016 by 15 percent, according to a new report released this month by the Federal Housing Finance Agency. The report highlights FHLBank low-income housing and community development activities from last year. In all, the FHLBanks helped close to 40,000 low or moderate-income households, including approximately 22,000 very low-income households, become homeowners. Under the program, FHLBank members apply to their bank for Affordable Housing Program funds. Those funds can then be utilized to buy, construct, or rehabilitate affordable housing. The funds can come in the form of either a grant or a subsidized interest rate advance from an FHLBank to its member.

October 6, 2017 - Inside The GSEs

GSE Approves Loans in CMG Financial Crowdfunding Pilot

Fannie Mae and Freddie Mac are accepting loans from borrowers who crowdfund their downpayments in a pilot program launched by CMG Financial this month. Geared especially toward millennials, HomeFundMe allows borrowers who take out a loan with the California-based company, to gather individual monetary gifts through their social media and email accounts. The platform is similar to the popular GoFundmMe donation-raising site. But, these funds are used specifically for a downpayment on a home. HomeFundMe can also be linked to things like graduation or wedding registries. HomeFundMe is also the first crowdfunding service that Fannie and Freddie have approved.

October 6, 2017 - Inside The GSEs

Judge Moves to Disclose More Documents in Shareholder Case

Fannie Mae and Freddie Mac shareholders are feeling more confident they will prevail in lawsuits over the Treasury sweep as internal government documents related to a popular case continue to trickle out. Late this week, Federal Claims Court Judge Margaret Sweeney granted a motion to compel the disclosure of documents that were filed over the summer by attorneys in Fairholme Funds v. the United States. Investors, having grown weary of the drawn-out discovery process, filed a motion in August in hopes of speeding things up by forcing the government to stop what they perceive as delay tactics. Attorneys asked the Federal Claims Court to use the “quick peek” procedure for some documents dating back to May 2012.

October 6, 2017 - Inside The GSEs

Fannie Pilot Offers Conventional Fixed-Rate Loans for MH in NH

Fannie Mae has partnered with the state housing finance agency in New Hampshire to pilot a program that allows buyers of manufactured homes access to 30-year conventional fixed-rate mortgages. The program kicked off last week and buyers must purchase in qualified resident-owned communities (ROC). The Home Preferred Manufactured Housing ROC loan, created in conjunction with the New Hampshire Community Loan Fund, gives both buyers and current ROC homeowners affordable financing and low-cost mortgage insurance options. New Hampshire was the perfect place to pilot the program because of the way it treats MH in ROCs, Patrick McCarthy, Fannie’s vice president of alternative real estate-owned dispositions told Inside The GSEs. “It treats them as real property whereas in....

October 6, 2017 - Inside The GSEs

OIG Critical of New Fannie Mae Headquarters Build-Out

The Federal Housing Finance Agency Office of Inspector General said late last week that the FHFA is not doing a good job of monitoring the escalating costs associated with Fannie Mae’s new headquarters being constructed in downtown Washington, DC. This is the second time the agency watchdog has blasted the FHFA for not properly overseeing the build-out of the leased office space comprised of two office towers connected by multiple glass bridges. In a new audit, the IG questioned upgrades on the Class A office building that cost more than the typical $175 per rentable square foot.

October 6, 2017 - Inside The GSEs

FHFA Director Tells Congress GSE Reform Action Needed ASAP

There was a sense of urgency in FHFA Director Mel Watt’s comments to Congress this week about reforming Fannie Mae and Freddie Mac. As the year winds down and the GSEs’ capital buffer becomes non-existent in January 2018, the FHFA head voiced his frustration about the lack of action from Congress on addressing the nine-year conservatorship. “These conservatorships have been unprecedented in scope, complexity and duration, especially when you consider that the enterprises support over $5 trillion in mortgage loan guarantees,” he said testifying before the House Financial Services Committee. House lawmakers fired off questions to Watt on everything from flood insurance to the qualified-mortgage rule and credit-risk transfers during this week’s hearing.

October 6, 2017 - Inside The GSEs

GSEs See Surge in Purchase-Mortgage Business in 3Q17

Heavy purchase-mortgage business boosted Fannie Mae and Freddie Mac production of single-family mortgage-backed securities during the third quarter of 2017, according to a new Inside The GSEs analysis and ranking. The two GSEs issued a total of $223.61 billion of MBS during the three-month period ending in September, a solid 17.9 percent gain from the previous quarter. It was the strongest quarter of 2017, but production during the first nine months of the year remained 6.4 percent below the same period in 2016. Most of the gain came from the seasonal purchase-mortgage side of the business. Fannie and Freddie securitized $140.75 billion of loans used to acquire a new home, a huge 26.4 percent increase from the second quarter.

October 6, 2017 - Inside Mortgage Trends

Surging Purchase-Loan Sector in GSE Market Lifts Correspondents in 3Q17

Fannie Mae and Freddie Mac saw a huge jump in deliveries of purchase-money mortgages during the third quarter, although the first-timer share of the market fell slightly. The two government-sponsored enterprises securitized $140.75 billion of purchase mortgages during the third quarter, an increase of 26.4 percent from the previous three-month period. Purchase loans accounted for 62.9 percent of loans sold into GSE mortgage-backed securities during ... [Includes two data charts]

October 6, 2017 - IMFnews

Price of Fannie/Freddie Common Up 35 Percent Since Summer. Credit the RNC?

The RNC document says the GOP “recognizes the sanctity of property rights in America,” which should warm the hearts of GSE common and junior preferred shareholders…

October 6, 2017 - Inside MBS & ABS

MBS Issuance in 3Q17 Was Up Solidly From Previous Period; ABS Production Weakened

The agency single-family MBS market continued cranking along during the third quarter of 2017, but other sectors in structured finance saw weakening issuance, according to an exclusive new analysis and ranking by Inside MBS & ABS. Some $407.55 billion of MBS and ABS – excluding collateralized debt obligations and agency credit-risk transfer deals – were issued during the third quarter. That was off 4.9 percent from the previous three-month period and it ... [Includes three data charts]

October 5, 2017 - Inside Mortgage Finance

FHFA Director Watt Urges House to Take Action Fast on Housing Reform to Avoid a Treasury Draw

House lawmakers grilled Federal Housing Finance Agency Director Mel Watt on everything from flood insurance to the qualified-mortgage rule and credit-risk transfers during a hearing this week, but his comments regarding the evaporating capital buffers at Fannie Mae and Freddie Mac suggested that he’s fed up with the lack of action from Congress. Testifying before the House Financial Services Committee, Watt said it would be “especially irresponsible” for the two ...

October 5, 2017 - IMFnews

Purchase-Mortgage Boom Pumps Up Fannie/Freddie MBS Volume in 3Q17

Purchase-mortgage activity in the GSE market surged 21.5 percent higher in the third quarter – and Fannie recorded a whopping 35.9 percent jump in such business…

October 3, 2017 - IMFnews

Short Takes: Some Criticism for the GSE Regulator / Security National Passes $3B Mark / Ellie Mae Completes Velocify Deal / Banks Will Pay Because of Equifax Mess / Executive Bolts Stearns for Sierra Pacific

But that didn’t stop the conservative from the Lone Star state from offering up some critiques on the FHFA...

October 3, 2017 - IMFnews

IG Blasts FHFA for Escalating Costs in New Fannie Mae HQ

Meanwhile, FHFA Director Mel Watt called the new IG audit “seriously flawed…”

October 3, 2017 - IMFnews

FHFA Director Mel Watt Once Again Sounds Warning on GSE Capital Buffer, Offers Hints on What He Might Do

FHFA Director Mel Watt: “In fact, it is especially irresponsible for the enterprises not to have such a limited buffer..."

October 2, 2017 - IMFnews

Short Takes: Less Than 90 Days / Ka-Ching / FHFA Issues Reminder on Tech Security / Clarification / A Promotion at Summit Valuations

In less than 90 days...

September 29, 2017 - IMFnews

What We’re Hearing: Sen. Warren Pens a GSE Letter to Mnuchin and Watt / Not a Fan of ‘Recap & Release’ / The Trump Administration Worries About FHA / More Ocwen Settlements / Growth Companies: CALCAP and FCI Lender Systems

For several months now we’ve been hearing reports that the Trump administration has grave concerns about the FHA program...

September 29, 2017 - Inside MBS & ABS

GSEs Offer Guidance on Prep for Single Security

Fannie Mae and Freddie Mac are encouraging MBS market participants to begin planning how they will adapt to the new uniform MBS when it goes online in early 2019. The “Single Security Initiative Market Adoption Playbook” provides a detailed look at the many changes involved in the new security, which will take the place of the separate to-be-announced MBS that the two government-sponsored enterprises now issue. The project includes...

September 29, 2017 - Inside MBS & ABS

UI Panelists Say Single-Family Rental Market Expected to Remain Strong; Supply Declining

The biggest challenge for the vibrant single-family rental market may be the shortage of available homes to purchase, according to panelists speaking at an Urban Institute event highlighting institutional investment in SFRs this week. And one analyst pointed to mid-sized investors as being best positioned to profit from the market. Since the financial crisis, SFRs have emerged as a viable housing option and real estate investment firms are seizing the opportunity. Both mom-and-pop operators and institutional investors have been buying homes of all sizes and offering them as rental properties. Prior to the crisis, there were...

September 28, 2017 - IMFnews

Short Takes: Nice Gains for GSE Shares / Sen. Bob Corker’s ‘Short’ Recommendation / Corker for FHFA Director? / Keep an Eye on GSE MF / Former Ellie Mae COO Lands at Blue Sage

Keep in mind that Mel Watt’s term as Federal Housing Finance Agency director expires in January 2019...


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