The mortgage industry has a window of opportunity to improve the secondary market without having to wait years for Congress to deal with Fannie Mae and Freddie Mac, according to the leadership of the Mortgage Bankers Association, which this week announced a three-prong agenda that doesnt depend on new legislation. The conservatorships of the two government-sponsored enterprises, which will be five years old in October, were intended to be a short time out, and there is still no endgame in sight or any plan for transition, said MBA President and CEO David Stevens, during the groups secondary market conference in New York this week. Stevens outlined...
Raising capital for privately held nonbank lenders that want to grow their holdings of residential mortgage servicing rights or get into the market has been mostly a dormant business since the housing bust of 2008, but Steadfast Capital hopes to change all that. And the newly launched company isnt just raising capital through equity and structured debt offerings it plans to invest alongside the lenders its working for. We have a willingness to invest in every deal, said Steadfast president, CEO and founder David Fleig. Its important to us. Presently, Steadfast is talking...
Two months ago, if you asked a broker of mortgage servicing rights how the market was doing, he would have said decent. But today, its a different story with the words great and hot getting muttered frequently. Over the past 60 days, several large flow and bulk MSR deals have been sent out for bid, many of which have been non-legacy offerings. Sellers are more willing to part with new MSR packages, product that is deemed to be of the highest quality with little chance of prepaying thanks to the ultra-low interest rates of today. And just how hot is the market? Interactive Mortgage Advisors, Denver, is wrapping up...
New York Attorney General Eric Schneiderman announced this week that he plans to file lawsuits against Bank of America and Wells Fargo for failing to comply with servicing standards included in the $25 billion national servicing settlement. Other states appear likely to join the action, though the litigation might not have much of an impact on the servicers, according to industry analysts. My office has received a significant number of complaints regarding the flagrant violations by Bank of America and Wells Fargo of the loan modification timeline requirements contained in [the settlement], Schneiderman said in a letter to the committee monitoring the settlement. BofA and Wells, along with Ally Financial, Citigroup and JPMorgan Chase, have had to comply...
The three percent points-and-fees cap for qualified mortgages under the Consumer Financial Protection Bureaus ability-to-repay rule is likely to push the private mortgage insurance industry away from products that emphasize upfront premiums and towards products built on monthly premiums. As the rule stands now, borrower-paid, non-refundable upfront MI premiums would be included in the points-and-fee calculation, but borrower-paid monthly MI premiums would not. There are two caveats: lenders may also exclude...
Fannie Mae and Freddie Mac this week reported a combined $63.3 billion in net income during the first quarter of 2013, which represents a huge dividend to taxpayers on the total $189.4 billion capital infusion they received since going into conservatorship. Together, the two government-sponsored enterprises will have paid $131.6 billion to the Treasury by the end of the second quarter, when the government sweep of excess net worth takes place. Under the terms of their bailout, the GSEs never pay down their Treasury draws, regardless of how much they pay in preferred stock dividends or net-worth sweeps. But Fannie and Freddie are...
Expanding Fannie Maes and Freddie Macs loan modification policy to include principal forgiveness under the Home Affordable Modification Program would generate fewer than 60,000 additional modifications and avoid up to 100,000 defaults, according to the Congressional Budget Office. The Congressional numbers-cruncher concluded that reaching additional borrowers would require a significant departure from HAMPs current eligibility rules. In 2010, the Treasury Department expanded...
Lenders, already facing the legal risks due to the Consumer Financial Protection Bureaus ability-to-repay rule, may face further problems trying to make sure loans originated for sale to Fannie Mae and Freddie Mac can actually be delivered to the government-sponsored enterprises. The Federal Housing Finance Agency this week said the GSEs will be prohibited from buying anything other than qualified mortgages, as that term is defined by the ATR rule. The directive rules out interest-only loans Fannie has purchased a smattering of these loans but Freddie shut down its IO program a while ago and mortgages with terms exceeding 30 years, a product neither GSE buys. The troublemaker in the policy is...