Most mortgage lenders expect profit margins to remain steady in coming months, but more of them are bracing for reduced earnings and fewer anticipate increases than in the past, according to results from a Fannie Mae survey released this week. Just over half (51 percent) of the 185 participants said they expect profit margins on loan production activity to be unchanged in the next three months. But a third of the lenders predicted tighter margins, up from 29 percent in the previous survey, mostly because of ...
The Senate’s housing finance reform bill would save the government some $60 billion over 10 years according to an analysis by the Congressional Budget Office, but don’t hold your breath waiting for the windfall, say critics. Earlier this month, the CBO issued its estimate, which concluded that replacing Fannie Mae and Freddie Mac with a new securitization program that couples a first-loss position for private capital with back-end government insurance could reduce “direct spending” by $60 billion over the 2015-2024 period.
Experts Laud FHFA’s Plan for ‘Single Security,’ But Urge Quicker Arrival at Goal. The Federal Housing Finance Agency’s “single security” proposal for a generic Fannie Mae/Freddie Mac MBS is “well-thought out” and “worthy of serious consideration,” but the agency should pick up the pace in its implementation to avoid making the solution part of the problem, according to a paper from the Urban Institute. Lewis Ranieri, chairman of Ranieri Partners, and Laurie Goodman, director of the UI’s Housing Policy Center, expressed concern that the FHFA “may be contemplating a slower pace in the project than it warrants.”
Together, Fannie Mae and Freddie Mac in August posted a combined increase in the volume of single-family mortgages securitized, according to a new Inside The GSEs analysis. Fannie and Freddie issued $61.1 billion in single-family mortgage-backed securities in August, a 5.5 percent increase from July.However, August's MBS issuance was down 56.7 percent on a year-to-date basis.
Purchase-mortgage originations jumped 44.3 percent from the first quarter of 2014 to the second quarter, according to a new Inside Mortgage Finance analysis and ranking, with first-time homebuyers representing about 43.9 percent of agency activity in the sector. Purchase mortgages accounted for 64.1 percent of total mortgage production during the second quarter. That’s the highest purchase share since 1995, when financing for home purchases represented 67.2 percent of total originations. At the midway point of 2014, purchase-mortgage originations were up...[Includes four data charts]
The Federal Housing Finance Agency is pushing back against the findings of its Inspector General that the agency rushed a mandated new representation and warranty framework “despite significant and unresolved operational risks” to Fannie Mae and Freddie Mac. Announced in September 2012 and implemented Jan. 1, 2013, the framework relieved sellers from certain reps and warrants, including those relating to credit underwriting and eligibility of the borrower and the property that were formerly effective for the life of the loan. It allowed for repurchase relief to seller/servicers if mortgages acquired by the government-sponsored enterprises after the effective date had acceptable payment history for 36 months. And the GSEs apparently weren’t...
Time is not a friend to the housing finance system so long as Fannie Mae and Freddie Mac remain in government conservatorship with no endgame in sight, according to the former head of the Federal Housing Finance Agency. Former FHFA Acting Director Edward DeMarco, now a senior fellow in residence for the Milken Institute’s Center for Financial Markets, told attendees at this week’s Bipartisan Policy Council’s housing summit in Washington that the ongoing conservatorships of the two government-sponsored enterprises – now in the sixth year – will continue to distort the market and place taxpayers at risk. “The conservatorships are...
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