Reform legislation rolled out earlier this month by House Democrats that would phase Fannie Mae and Freddie Mac out of business while dramatically expanding Ginnie Mae’s role in the market has been positively received within the industry, but room for improvement remains. The Partnership to Strengthen Homeownership Act, H.R. 5055, sponsored by House Democrats John Delaney (MD), John Carney (DE) and Jim Himes (CT), has zero chance of gaining traction this year. However, the lawmakers said they are playing the long game with their bill, looking ahead to the GSE reform debate in the 114th Congress.
Second-quarter bank earnings reports show a strong increase in overall mortgage banking profitability as new origination volume rebounded from historic lows set in the first three months of 2014. A new Inside Mortgage Trends review of earnings reports from 21 banks, including eight of the 10 largest banks in mortgage lending, reveals that the group generated $3.81 billion in second-quarter mortgage banking income. That was up 31.5 percent from ...
Not only are residential originations on the rise once again, but so are “signing bonuses” for top-flight loan officers who can bring in the volume. According to research from Garrett, McAuley & Co., signing bonuses being paid today range from $20,000 to $30,000, but “with some going much higher.” With production shifting toward purchase-money lending, LOs with deep ties to Realtors and homebuilders can fetch the most. But according to interviews ...
A federal judge last week granted limited discovery to a hedge fund representing a group of Fannie Mae and Freddie Mac shareholders as they challenge the government’s “net worth sweep” of their profits. However, the court will keep a tight lid on public access to the documents in a nod to the government’s claim that a leak could have dire economic consequences on the mortgage market. Fairholme Capital Management has been pushing hard for discovery and access to internal government documents since the shareholder filed suit last summer demanding that the Treasury Department void its August 2012 Third Amendment to its preferred stock purchase agreement with Fannie and Freddie.
Concerns that rising interest rates will prompt current homeowners to stay in place are overblown, according to a number of industry analysts. A panel at Zillow’s latest housing forum this week focused on the issue of borrower lock-in, with most speakers downplaying the issue. Joseph Tracy, an executive vice president and senior advisor to the president at the Federal Reserve Bank of New York, said his research has found that rising interest rates ...
Industry trade groups are lining up to express their dismay at a recent audit issued by the Inspector General of the Federal Housing Finance Agency, which said both good and bad things about the risk nonbanks and small lenders pose to Fannie Mae and Freddie Mac. The latest trade group missive was issued late this week by the Community Home Lenders Association: “By implication, the IG report seems to be pushing for more loans to be done at the big TBTF [too big to fail] banks by stating that small nonbank lenders are riskier for the enterprises and with little or no evidence to support the claim.”
Lenders facing rising interest rates might be overlooking valuable hedging options, according to officials at Mortgage Capital Management. The firm offers pipeline risk-management services and is touting float-down locks, or put options on interest rates, which MCM claims will increase earnings stability and grow production. A float-down lock allows a borrower to receive a lower interest rate on their mortgage if rates decline between when ...
Fannie Mae has priced its fourth and largest risk-sharing transaction to date, a more than $2 billion offering pegged to a pool of mortgages acquired last year, the GSE announced last week. The $2.05 billion note is the GSE’s third transaction under its Connecticut Avenue Securities series issued this year. Last year, the Federal Housing Finance Agency ordered both Fannie and Freddie Mac to shrink their role in the U.S. housing market. The latest offering – Series 2014-C03 – included reference loans with original loan-to-value ratios of up to 97 percent and “is consistent with prior transactions.”
Trying to find out how much money an individual mortgage company spends each year in marketing its products to consumers is no easy task. A quick survey of some of the nation’s largest lenders on advertising dollars conducted by Inside Mortgage Trends yielded the same exact response: “We don’t disclose that information.” Many large lenders don’t even engage in specific mortgage-related advertising, at least not on a national level. The one exception is ...
New mortgage insurance eligibility rules proposed earlier this month by the Federal Housing Finance Agency appear likely to cause some MIs to tweak their corporate structures and/or to raise additional capital, note industry observers. In its draft Private Mortgage Insurer Eligibility Requirements, the FHFA directed Fannie Mae and Freddie Mac to revise, expand and align their risk management requirements for mortgage insurance counterparties.The updated financial requirements incorporate a new, risk-based framework that ensures that approved insurers have a sufficient level of liquid assets from which to pay claims.