Browse articles from all of our Newsletters related to GSEs.

January 19, 2018 - Inside The GSEs

GSE Roundup

Freddie Mac Names Head of HR and Diversity. Freddie Mac announced that Jacqueline Welch has been named head of the Human Resources, Diversity & Inclusion (HRDI) division and chief diversity officer. In her expanded role as senior vice president of HRDI and CDO, Welch will be a member of the company’s senior operating committee and will report directly to Freddie Mac CEO Donald Layton. Welch joined Freddie in December 2016, and the GSE says she brings more than 20 years of experience in HR strategy and execution to the company. Chicago’s Bridgeview Bank Now Fannie Mae Approved. This week, Chicago-based Bridgeview Bank announced it has received Fannie Mae approval, which allows the company to expand its consumer home financing business.

January 19, 2018 - Inside The GSEs

GSE Shareholders Continue Battle Against Government Agencies

In a joint brief filed this week, federal respondents took issue with arguments made by GSE shareholders in their fight against the net worth sweep and said a shareholder petition for a Supreme Court review of their case should not be granted. Shareholders in several cases filed three petitions for a writ of certiorari back in November. The plaintiffs asked the Supreme Court of the United States to intervene to “restore certainty and uniformity.” They claim that the Federal Housing Finance Agency acted unconstitutionally when it imposed the net worth sweep.

January 19, 2018 - Inside The GSEs

Housing-Reform May Negatively Impact Rural Lending

Borrowers in rural communities would suffer if the resolution of the limbo status of Fannie Mae and Freddie Mac winds up creating more headwinds for community-based banking institutions. The Brookings Institute published a new report by the Center for Responsible Lending explaining how housing-finance reform proposals will profoundly affect lending in rural communities. The report said the GSE financing meets a critical need in rural areas, home to almost a quarter of the population and17.5 percent of mortgage loans in the U.S. In 2016, 30.3 percent of all loans originated in rural areas were sold to Fannie and Freddie, the CRL said.

January 19, 2018 - Inside The GSEs

IG Says Fannie, Freddie ARMs Purchase Up Since 2016

The GSEs have been purchasing more adjustable-rate mortgages in the past year and the Federal Housing Finance Agency Office of Inspector General said that warrants monitoring. Since November 2016, the GSEs’ purchase of ARMs has grown. The numbers are far lower than the volume of ARMs purchased during the housing bubble in the early 2000’s, a new IG white paper noted. The ARM share of single-family mortgage purchases by the GSEs dropped from around 20 percent in 2006 to 12 percent in 2007. And by 2009, ARM purchases by Fannie and Freddie tumbled to just 2.3 percent of their single-family business. From 2007 to 2010, the GSEs tightened restrictions on their purchase of ARMs, including those with nontraditional features and layered risk.

January 19, 2018 - Inside The GSEs

GSEs Report Record-Breaking Multifamily Market for 2017

Freddie Mac set a new company record for multifamily lending last year by financing $73.2 billion in loan purchase and guarantee volume. That’s a noteworthy 30 percent increase from the $56.8 billion financed in the previous year and translates to 820,000 units. Freddie attributes the growth to a host of new offerings and executions. The GSE set records in small-balance loans, targeted affordable housing and its Green Advantage businesses. “The strength of our innovative products, underwriting and world-class securities brings liquidity to every corner of the multifamily market,” said David Brickman, Freddie’s executive vice president and head of multifamily.

January 19, 2018 - Inside The GSEs

Housing-Finance Reform Should Address Servicing Issues

Issues related to mortgage servicing, including the rising costs to service mortgages today, should be included in talk of housing-finance reform, according to a new paper by the Urban Institute. Since the housing downturn, mortgage servicing costs have risen dramatically, which has reduced access to credit and forced some depository institutions to leave the market. The UI said that the foreclosure crisis in 2007 upended the pre-crisis servicing model. And despite its importance, the report said, mortgage servicing is frequently overlooked in major policy conversations. “That is a mistake. The servicing industry has changed dramatically since the 2008 mortgage default and foreclosure crisis and subsequent Great Recession,” said the paper.

January 19, 2018 - Inside The GSEs

GSEs Align MI Rescission Relief With Reps and Warrants

Fannie Mae and Freddie Mac issued new GSE rescission relief principles to mortgage insurers this week that are designed to align better with the current representation-and-warranty framework. Early last year, the Federal Housing Finance Agency suggested that private MIs work on aligning their buyback and rescission guidelines with the mortgage giants. The new principles will add clarity, incorporate new features and allow for more rescission relief without increasing risk to the GSEs’ most significant counterparties, according to the announcement by the Federal Housing Finance Agency. This year, the mortgage insurers will revise their master policies to reflect the new principles and obtain the required approvals...

January 19, 2018 - Inside Mortgage Trends

Refi Boosts GSE Volume in 4Q17

Fannie Mae and Freddie Mac saw a 27.2 percent surge in refinance business during the fourth quarter that helped offset an 8.3 percent drop in purchase-mortgage acquisitions, according to an Inside Mortgage Trends analysis of mortgage-backed securities data. The wholesale-broker channel recorded a 7.4 percent increase in production during the fourth quarter, compared to smaller increases in retail (2.6 percent) and correspondent (6.0 percent) ... [Includes one data chart]

January 19, 2018 - Inside The GSEs

Law Firm Forecasts GSE Reform to Happen Within First Half of Year

The stars are aligning for housing-finance reform, according to an analysis by K&L Gates. The law firm said it believes that reform may finally be addressed in the first half of this year. Sens. Bob Corker, R-TN, and Mark Warner, D-VA, have been circulating a draft proposal to other senators and the Trump administration. The firm noted that the Corker-Warner proposal contains features such as a federal government guarantee for mortgage-backed securities in the event of catastrophic losses, and it has the GSEs continuing to exist under government conservatorship until competitors enter into the securitization market for mortgage loans.

January 19, 2018 - Inside The GSEs

Treasury Advocates for Legislative Solution to GSE Reform

Craig Phillips, counselor to the secretary at the U.S. Department of Treasury, advocated for a legislative solution to the ongoing conservatorships of Fannie Mae and Freddie Mac. He said the decision to allow the GSEs to retain a small capital buffer was a litmus test on housing reform. Although he said Treasury didn’t feel that Fannie and Freddie have an immediate capital problem because they have lines of credit, Phillips said there was somewhat of an “optical issue,” which led to the Treasury’s decision to allow the GSEs to retain up to $3 billion in capital in December. Speaking at a Women in Housing and Finance public policy luncheon in Washington, he said, “We think that decreases tension over this point. There was...

January 19, 2018 - Inside The GSEs

FHFA Director Joins the GSE Reform Conversation, Seeks Explicit Guarantee

After years of being mum on what he thinks a reformed secondary mortgage market should look like, Federal Housing Finance Agency Director Mel Watt revealed FHFA’s goals for a post-conservatorship housing-finance system. Prompted by what Watt called “the growing perception that reform could be achievable this year,” he wrote to the Senate Committee on Banking, Housing and Urban Affairs on Jan. 16 outlining FHFA’s views on reform, which include an explicit government guarantee for mortgage-backed securities comprised of conventional home loans. According to the document, a copy of which was provided to Inside The GSEs, Watt and his staff reiterated that an ongoing conservatorship is not sustainable.

January 19, 2018 - Inside The GSEs

GSE Servicing Market Became More Top-Heavy in 4Q17

The ongoing growth of New Residential Mortgage resulted in an increase in concentration among the top servicers of single-family Fannie Mae and Freddie Mac loans in the fourth quarter. New Residential, a real estate investment trust that invests in mortgage servicing rights and related assets, has rocketed up the ranks of GSE servicers. After picking up its seller-servicer approvals in the third quarter of 2016, the company had amassed a $229.57 billion MSR portfolio by the end of last year. The REIT so far hasn’t invested in Ginnie Mae servicing. Its Fannie/Freddie holdings grew by 13.5 percent during the fourth quarter, enough to vault over Bank of America to become the third-largest investor in GSE MSR. New Residential pays subservicers to handle loan administration duties.

January 19, 2018 - Inside Mortgage Trends

Servicing Transfers Ended a Boom Year In 2017 With Cooling in Fourth Quarter

Despite a slowdown during its final lap, 2017 was a strong year for sales of agency mortgage servicing rights, according to a new analysis of mortgage-backed securities data by Inside Mortgage Trends. The market saw some $538.49 billion of agency servicing rights change hands last year, a 22.0 percent increase from 2016. Most of the MSR transfers were bulk transactions, which totaled $406.78 billion, a huge 51.1 percent jump from the previous year. Bulk deals ... [Includes three data charts]

January 19, 2018 - IMFnews

What We're Hearing: GSE Reform is Dead, Here’s Why / Okay, Maybe a 20 Percent Chance of Passage / What’s Riskier? GSE Stock or Bitcoin? / Nonbank CEO Ready to Depart / Brett Hively Resurfaces / FHA and the Government Shutdown

The White House may be committed to GSE reform, but Republicans are not...

January 19, 2018 - IMFnews

GSE Shareholders Appeal Loss in ‘Sweep’ Case Against the FHFA

The plaintiffs argue that the GSEs and their private stockholders did not receive any consideration in exchange for the net worth sweep…

January 18, 2018 - IMFnews

Short Takes: House GSE Bill Due by Mid-March? / Providing Technical Assistance: the Staff of the FHFA / Time for a Pay Raise for Layton and Mayopoulos? / Hiring Underwriters from Wells Fargo / CFPB’s Mulvaney to Yellen: I Don’t Need Your Money (Right Now)

If a GSE reform bill does not get signed into law this year, how much longer will the CEOs of Fannie Mae and Freddie Mac stick around?

January 18, 2018 - Inside Mortgage Finance

Credit Score War Brewing as FHFA, GSEs Explore Alternative Scoring Systems

Fannie Mae and Freddie Mac have been charged with exploring options to update their current FICO credit scoring model and make a decision this year as to whether to make the switch in 2019.

January 18, 2018 - IMFnews

FHFA Chief Unveils Agency Views on GSE Reform, Worries About Having Too Many ‘SMEs’

Watt and his staff do not want taxpayers to foot the bill for failing mortgage guarantors…

January 18, 2018 - IMFnews

The Trend is Clear: Nonbanks Poised to Have a 50 Percent Agency MSR Share

The nonbank share of agency servicing grew by 4.7 percentage points during 2017.

January 17, 2018 - IMFnews

Short Takes: Freddie Mac, an Actual Lender? / GSEs Working to Revise MI Rescission Relief Policies / The Last Time I Saw Richard / MIAC Selling $71MM of RPLs / Movement Hires Chief Credit Officer

Fannie Mae and Freddie Mac are working with the nation’s mortgage insurance firms to revise rescission relief principles...

January 16, 2018 - IMFnews

Short Takes: GSE Reform, Yes. Passage? No / Galton’s Return to Nonprime / Citi’s Incredibly Shrinking MSR Portfolio / Legislative Reg Relief On the Way? / English Wants Expedited Review in CFPB Appeal

GSE reform may emerge from the Senate Banking Committee, but as for final passage...

January 12, 2018 - IMFnews

Corker-Warner Still Intact, Looking for Another Democrat to Sign on

After rumors late this week surfaced that Sen. Mark Warner, D-VA, was walking away from supporting the government-sponsored enterprises’ bill (Corker-Warner) he crafted with Bob Corker, R-TN, a source close to the housing finance reform discussions confirmed that is not the case.

January 11, 2018 - IMFnews

Rural Borrowers May Feel Impact of GSE Reform Proposals that Tilt Against Community Banks

Proposed changes to Fannie Mae and Freddie Mac as it relates to community-based banking institutions could put borrowers in rural communities at a disadvantage, according to a new report by the Center for Responsible Lending.

January 10, 2018 - IMFnews

Housing Finance Reform Must Include FHA, Panelists Say

Panelists at an Urban Institute event this week concluded that there can’t be a housing finance reform discussion without including the FHA. Carol Galante, former FHA commissioner during the Obama administration, said it’s important to make sure changes to the government-sponsored enterprises don’t unintentionally impact the FHA.

January 9, 2018 - IMFnews

Large Lenders Increase their Share of GSE Business in Fourth Quarter

The top five sellers to Fannie Mae and Freddie Mac posted a combined 14.1 percent increase in volume from the third to the fourth quarter, boosting their share of the market to 38.4 percent.

January 5, 2018 - Inside The GSEs

GSE Roundup

Fannie Affordable Housing Challenge. Fannie Mae launched a $10 million challenge to help address the affordable housing crisis. Through the Sustainable Communities Innovation Challenge, the GSE will commit $10 million over two years to attract promising ideas that will help alleviate affordable housing issues. Fannie expects to receive proposals from across the public, private, and nonprofit sectors. Maria Evans, Fannie’s vice president of sustainable communities’ partnership and innovation, said, “With the Challenge, we are looking for new concepts, designs, and ways of solving our nation’s affordable housing issues from innovators who are working inside and outside of the traditional housing industry. Great ideas can come from anywhere.” The goal is to...

January 5, 2018 - Inside The GSEs

Shareholder Considers Treasury Payments as Stolen Money Return

With new Fannie Mae and Freddie Mac draws on the Treasury’s line of credit now imminent because of tax cut legislation, one GSE shareholder says the payments should be accounted for as paybacks for money that was unfairly taken. Gary Hindes, a Fannie shareholder, has argued unsuccessfully that the Treasury sweep of GSE profits violates state law in Delaware and Virginia, where Fannie and Freddie are incorporated. Having lost the first round, the case is currently on appeal to the U.S. Court of Appeals for the Third Circuit. In a statement released this week, Hindes blasted the agreement between the GSEs and Treasury.

January 5, 2018 - Inside The GSEs

Affordable Housing Groups Say Reform Proposals Are ‘Harmful’

Fair housing advocates and civil rights groups wrote the Senate Committee on Banking, Housing and Urban Affairs to express concerns about not having a seat at the table as lawmakers draft GSE reform legislation. The groups, which include the Center for Responsible Lending, National Fair Housing Alliance and the NAACP, said current House and Senate proposals would do significant harm by locking out the very borrowers who depend on a future system, resulting in devastation to a recovering market. “Our constituents have a strong stake in the outcome of any legislative proposals in this area, and we are alarmed that we have not been invited to offer...

January 5, 2018 - Inside The GSEs

Federal Home Loan Bank Eligible Collateral Up 21 Percent

The total book value of the Federal Home Loan Banks’ eligible collateral was up 21 percent in 2016, rising to $2.8 trillion from $2.3 trillion, according to the Federal Housing Finance Agency’s recently released report to Congress highlighting the amounts and types of collateral pledged to the FHLBanks. Advances over the same period rose by 11 percent from $634 million to $705 million. Reported borrowing capacity was $2.1 trillion. Single-family and multifamily residential loans accounted for the majority of the book value of collateral, both eligible (61 percent) and pledged (58 percent).

January 5, 2018 - Inside The GSEs

GSEs to Review Servicing and Appraisal Process in 2018

Fannie Mae and Freddie Mac plan to tackle issues related to mortgage servicing and the borrower experience as part of their 2018 goals. The Federal Housing Finance Agency released the “scorecard” for the GSEs late last month, which outlines specific priorities the duo are expected to focus on throughout the year. The GSEs are charged with assessing the current mortgage servicing business model and developing specific plans to support servicing liquidity. The FHFA charged the GSEs to “assess the challenges and potential solutions for improving the borrower experience, expanding liquidity, and increasing efficiency of the servicing market.”

January 5, 2018 - Inside The GSEs

Corker’s Tax Reform Flip-Flop Backlash Due to GSE Reform?

Sen. Bob Corker’s last-minute decision to vote for the massive GOP tax bill caused a ruckus in the press and social media, but the Senator’s communications director attributed the noise to opponents of his efforts to pass housing-finance reform. The controversy arose when Corker, R-TN, was accused of voting for the tax overhaul only after he saw a provision that would reap him financial gains. Weeks before the final vote, Corker was the only Republican senator set to vote against an earlier version of the bill. Corker is said to have significant holdings in companies that would benefit from a tax break for real estate-related pass-through corporations and partnerships.

January 5, 2018 - Inside The GSEs

FHFA Mulling Over Credit Score Alternatives in Request for Input

The Federal Housing Finance Agency is reviewing four possible options to update the credit scoring systems used by Fannie Mae and Freddie Mac. The agency said while the current credit score model is a reasonable predictor of default, it is seeking input on whether an alternative is necessary and what impact it would have on the current credit score requirements. The request for input was issued in late December. Options include requiring a single type of score on every loan, requiring two different scores, allowing lenders to decide which score to use or permitting multiple scores through a waterfall approach.

January 5, 2018 - Inside The GSEs

GSE Reform Up in the Air for 2018 But Momentum, Optimism Grow

Some observers think that resolving the long-running conservatorship of Fannie Mae and Freddie Mac this year is closer than it has ever been, but they also say political differences present a number of challenges. There has been an uptick in momentum the past few months and the recent deal between the Federal Housing Finance Agency and the Treasury that allows the GSEs to retain $3 billion in capital is an optimistic sign of progress to many. Moreover, the Senate Committee on Banking, Housing, and Urban Affairs is working on a draft of a GSE reform bill, and the House Financial Services Committee has held a handful of hearings on GSE reform issues in the fourth quarter in preparation for drafting legislation.

January 5, 2018 - Inside The GSEs

GSEs Allowed to Retain $3B in Capital, Treasury Draws Pending

Both GSEs are expected to need a draw from the U.S. Treasury, thanks to the passage of the Tax Cuts and Jobs Act that will reduce the corporate tax rate and result in $15.3 billion in one-time charges for the pair. With the tax rate being reduced from 35 percent to 21 percent, the GSEs now have to measure their net deferred tax assets using the new rate. According to recent Securities and Exchange Commission filings, Fannie Mae expects to take a one-time charge of $10.0 billion and Freddie Mac is bracing for a $5.3 billion charge.

January 5, 2018 - Inside The GSEs

Fannie Recovered Some Ground in December, Refi Drove 4Q17 Volume

Fannie Mae last month reclaimed some of the market share Freddie Mac snagged in October and November as GSE single-family business volume skidded toward yearend. Fannie issued $43.99 billion of single-family mortgage-backed securities in December, a tidy 4.9 percent increase from the previous month. Freddie’s $30.03 billion in production tumbled 19.2 percent from November. That gave Fannie a 59.4 percent share of the GSE market in December, in line with historical trends. Freddie posted big increases in volume during October and November, pushing its GSE market share to 46.4 percent for the two-month period. Even with the return to more normal...

January 8, 2018 - IMFnews

Looks Like Mortgage Lenders are Over-Reserving for GSE Buybacks

It appears that many lenders may have what is known in the industry as “redundant reserves”…

January 5, 2018 - IMFnews

About that GSE Bill Being Worked on in the Senate…

Progressives are worried that in 2019 a new Federal Housing Finance Agency director will takeover, undoing much of what they like about the current system…

January 4, 2018 - IMFnews

Short Takes: Senate GSE Bill Due Out This Month? / But Will it Pass? / The Unstoppable LendingTree / Mortgages and the Weed Trade? / Hamilton Hires Former Wells-JPM-Freddie Exec to be CEO

When Fannie and Freddie request a fresh draw of taxpayer funds from Treasury to deal with their DTA "problem," it will poison the well for conservative Republicans...

January 4, 2018 - IMFnews

GOP Tax Bill Will Boost GSE Earnings by $3 Billion. However…

And now for the bad news: The lower corporate tax rate will force Fannie and Freddie to write down the value of their deferred tax assets by $15.3 billion…

January 4, 2018 - IMFnews

Surprise: In 4Q17, GSE MBS Issuance Actually Increased

Fact: Fannie and Freddie securitized more purchase-money mortgages in 2017 – $472.77 billion – than in any year since 2007.

December 29, 2017 - IMFnews

What We’re Hearing: The Biggest Story of 2018? Fannie and Freddie, Of Course / An M&A Boom? / Good Luck Mr. Corso / Penny Spends Dollars to Buyback Common / A Very Short Publishing Break

We get the sense that merger and acquisition activity could be fierce as profit margins tighten...

December 29, 2017 - IMFnews

MBS Analysis: Looks Like the GSEs are Taking Market Share from FHA

Wells Fargo, Quicken, and United Wholesale Mortgage are the top three firms originating these low-downpayment loans…

December 28, 2017 - IMFnews

Short Takes: The Most Profitable Company in America (Per Employee) is Fannie Mae / What About Ginnie? / Coming in January: A New FHA Commissioner / What’s the Hold Up? Answer: Sen. Warren

The ranking was determined by dividing a company’s profit over the last financial year by the number of employees…

December 28, 2017 - IMFnews

Expected on GSE Reform: Reconstituted Versions of Fannie and Freddie but…

What’s gestating now in Congress may represent the best chance of reforming the secondary market since Fannie Mae and Freddie Mac were placed into conservatorship in September 2008…

December 27, 2017 - IMFnews

Scrutiny of Corker’s Net Worth Linked to Senator’s Efforts to Pass Housing Finance Reform Legislation

“It is certainly not a coincidence that these lies are being peddled once again as the Senate Banking Committee resumes its work this Congress on reforming Fannie Mae and Freddie Mac,” said Mica Johnson, Sen. Bob Corker’s communications director.

December 26, 2017 - IMFnews

GSEs’ Marching Orders for 2018 Include Examining Servicing and Appraisals

The GSEs are expected to assess the current mortgage servicing business model and develop plans to support liquidity in the mortgage servicing market.

December 21, 2017 - Inside MBS & ABS

Moody’s Makes a Rash of Corrections on Freddie Mac K-Deal Ratings by Forgetting About GSE’s Guarantees

Moody’s Investors Service erred in a number of its ratings of Freddie Mac’s structured multifam-ily MBS pass-through securities because it failed to take into account the guarantees provided by the government-sponsored enterprise on classes of its K-deals.

December 21, 2017 - Inside MBS & ABS

GSE and Other Low-Downpayment Programs Utilized More In 2017, Represents Highest Use Since Being Re-Introduced

More first-time homebuyers took advantage of the government-sponsored enterprises’ 97 percent loan-to-value mortgage products this year – to the point where they likely took away market share from the FHA program.

December 22, 2017 - Inside Nonconforming Markets

News Briefs

According to an analysis by Zillow, 11.2 percent of the 25.1 million homes that are currently worth enough to require a jumbo mortgage will fall under the conforming loan limit in 2018 due to higher loan limits established by the Federal Housing Finance Agency. The analysis was based on county-specific home prices and the assumption that jumbos allow a loan-to-value ratio no higher than ... [Includes two briefs]

December 21, 2017 - IMFnews

Short Takes: Freddie Mac Might Avoid a Treasury Draw / Exigent? / This is Just the Beginning / The Big Winners: Holders of GSE Junior Preferred / Paying Your Mortgage via Alexa / IMFnews Publishing Break

Washington Analysis believes the FHFA/Treasury move is a “clear positive for shareholders in the GSEs, particularly holders of junior preferred shares..."


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