The Federal Housing Finance Agencys official watchdog recommended in a report this week that the agency devise a way to measure how its guaranty fee hikes of the past two years have actually increased the participation of private investment in the mortgage-backed securities sector. As Fannie Maes and Freddie Macs conservator, the Finance Agency directed the GSEs to increase their guaranty fees as a means to encourage greater private-sector investment in mortgage credit risk, reduce their dominant position in housing finance and limit potential taxpayer losses, the FHFA Office of Inspector General report noted. The enterprises average combined guaranty fees have nearly doubled since 2011 due to legislation and FHFAs initiative and FHFA plans further gradual guaranty fee increases to spur private-sector mortgage investment, said the OIG. However, it is not yet clear how high FHFA must increase guaranty fees to achieve its objectives.
California remains the top source of new single-family mortgages for Fannie Mae and Freddie Mac, even as Fannie remains the dominant GSE in terms of production through the first half of the year, according to an Inside The GSEs analysis. A total of $160.3 billon home loans on Golden State properties were securitized by the two GSEs during the first six months of 2013, accounting for 23.1 percent of their total business for the half year. That was up 21.2 percent from total California production during the first six months of 2012 as the overall GSE market rose 20.2 percent from a year ago.
While Congress drafts and debates different legislative remedies to GSE reform that could take at least two years to materialize, regulators and administration officials can, and must, begin to act now to implement a mortgage finance solution, the head of the Mortgage Bankers Association said this week. At a press briefing, MBA President and Chief Executive Officer David Stevens rolled out the trade groups five-point plan Key Steps on the Road to GSE Reform that could be immediately implemented by the Federal Housing Finance Agency and/or by Fannie Mae and Freddie Mac without the need for authorizing legislation and without disrupting the housing finance system. Given the recent market recovery, some worry that if the status quo were to change, lenders could end up being in a worse position and lose some of the parity gained, said Stevens. We believe these steps are extremely important to support a competitive, robust and sustainable housing finance system regardless of the ultimate path taken by policymakers in Washington.
A Manhattan federal judge earlier this month dismissed a class-action lawsuit against Standard & Poors Financial Services after finding no evidence that the rating agency defrauded investors when it gave a favorable rating to Fannie Mae stock prior to the financial crisis.The suit, filed in December 2012 on behalf of potentially hundreds of thousands of investors who bought stock in an offering by Fannie in May 2008, four months before the GSE was taken over by the government, alleged that S&P knowingly misrated Fannies stock. Valued at about $25 per share when it was issued, the stock dropped to about $3 per share after Fannies government conservatorship began in September 2008.
Most banks that have reported second-quarter earnings said their mortgage banking income declined from the first three months of 2013, but profitability remained strong, according to a new Inside Mortgage Trends analysis of corporate disclosures. A group of 15 banks that includes most of the top depository institutions in the mortgage business reported a combined $6.72 billion in mortgage banking income during the second quarter of 2013. That was up 5.0 percent from the earnings ... [Includes one data chart]
Consumer complaints filed with the Consumer Financial Protection Bureau about their residential mortgages fell to 12,531 during the second quarter, down 9.2 percent from the first three months of the year, according to an analysis of the bureaus complaint database by Inside the CFPB, an affiliated publication. That rate of decline is better than the overall 8.2 percent drop in complaints seen across all financial services product lines in aggregate, but not as good as the declines related to ...
You would think that a bank with a small presence in mortgages would jump at the opportunity to keep the fast-growing residential arm of a merger partner. But thats not the case with MF Financial, a mid-sized bank that earlier in the week announced that it would buy Taylor Capital, parent of Cole Taylor Bank, in a stock deal valued at $680 million. Although MF Financial took a close look at the subsidiary, Cole Taylor Mortgage, it decided that the unit is not essential to the deal. In fact, its so non-essential ...
With interest rates increasing, some new borrowers have turned to adjustable-rate mortgages. Industry analysts expect the ARM share of originations will increase, but limited product offerings and tight underwriting standards will likely prevent the ARM originations from reaching levels seen during the previous mortgage boom. The record low interest rates on fixed-rate mortgages in recent years have given borrowers few reasons to take ARMs. Interest rates on mortgages have increased significantly recently ...
While new regulations have been costly for servicers to implement, they have helped improve borrower satisfaction, according to J.D. Powers latest primary servicer satisfaction study. The fact that satisfaction continues to increase seems to indicate that changes being made in response to these new regulations are having a positive impact on the experience of customers, said Craig Martin, director of investment services at J.D. Power. He cited regulations from the Consumer Financial Protection Bureau ...
Negative home equity is not an important barrier for a homeowner to decide to move elsewhere for a better job, although underwater homeowners are probably more likely to move than borrowers with equity in their homes, according to researchers at the Federal Reserve Bank of Cleveland. The study presents evidence debunking the theory that homes with underwater mortgages deter unemployed people from moving to get new jobs. The lock-in theory holds that unemployed people with negative equity could ...