In a recent ruling, the Nevada Supreme Court decided that in the case of Nationstar Mortgage, LLC v. SFR Investments Pool 1, LLC, a homeowner’s association priority lien cannot extinguish a first deed of trust in an HOA foreclosure sale. This is a win for Fannie Mae and Freddie Mac. Twenty-two states have super-lien laws that allow HOAs to take priority over first mortgages and foreclose the property to collect unpaid fees of up to six months’ worth. In 2014, the Nevada Supreme Court ruled that an HOA could indeed extinguish a senior mortgage. But Nationstar Mortgage argued...
Fannie Mae and Freddie Mac issued $189.70 billion of single-family mortgage-backed securities during the second quarter of 2017, a 13.1 percent drop from the first three months of the year. A new ranking and analysis by Inside The GSEs reveals that much of the decline resulted from a slowdown among large banks and thrifts. The four banks with over $1 trillion in assets delivered just $43.23 billion of home loans into Fannie/Freddie MBS during the second quarter. That was down 29.1 percent from the previous period, knocking the group’s combined market share down from 27.9 percent in the first quarter to 22.8 percent.
With GSE reform moving up the priority list in the minds of lawmakers and industry executives, Federal Reserve Governor Jay Powell joined the conversation last week and said it’s time to act now before it’s too late. Following the Senate Banking, Housing and Urban Affairs Committee hearing on GSE reform, Powell spoke at the American Enterprise Institute and urged lawmakers to come up with a solution while the economy is healthy. He worries that if reform doesn’t happen soon, the status quo will become comfortable. Moreover, Powell said any change would be more challenging to enact during difficult economic times.
Industry groups lauded the GSEs’ efforts to increase funding for underserved markets but recommend they add more specific activities focused on increasing loan purchases and speeding up the process. In May, Fannie Mae and Freddie Mac released draft proposals on ways to grow financing for specific underserved markets under the Federal Housing Finance Agency’s duty-to-serve requirements. Those markets include manufactured housing, rural housing and preserving affordable housing for low- and moderate-income households. The National Low Income Housing Coalition said while the plans demonstrate the GSEs’ commitment to increase their impact in underserved markets, they focus largely on scoring and technical compliance.
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