Fannie Mae and Freddie Mac this week directed servicers to inform homeowners reeling from the damage inflicted by the tornados that swept through Oklahoma and other states that they may be eligible for a temporary reprieve on their mortgage payments. The GSEs’ disaster relief policies are targeted to borrowers with homes in jurisdictions President Obama has declared to be Major Disaster Areas where federal Individual Assistance programs are being made available to affected individuals and households.
A federal appeals court has ruled in favor of Fannie Mae and Freddie Mac, overturning a lower court ruling that the counties and state of Michigan were entitled to collect local real estate transfer taxes from the two government-sponsored enterprises. This week’s unanimous ruling by a three-judge panel from the U.S. Court of Appeals for the Sixth Circuit said the lower court is not in a position to second-guess Congress by creating exemptions to tax statutes. “The statutes at issue here plainly state that the defendants are exempt from ‘all taxation,’” the court ruled. In June 2011, Oakland and Genesee counties each filed suit claiming Fannie and Freddie recorded deeds and other conveyances without paying the Michigan Transfer Tax.
Freddie Mac this week issued $1.04 billion of mortgage-backed securities backed by modified loans.The notes are being pooled into new Freddie Mac “Fixed-Rate Modified Participation Certificates” with new "MA-MD" prefixes. The GSE bought the majority of these loans out of participation certificates when they were at least 120 days past due. A Freddie official said that it will not sell the new bonds in the open market and instead will hold them on balance sheet.
Fannie Mae’s and Freddie Mac’ conservatorships have caused the government’s involvement in the mortgage market to “balloon to unhealthy proportions” since the two GSEs entered government conservatorship in 2008, creating far-reaching effects on the private sector, crowding out potential capital and blocking real market competition, according to the Mortgage Bankers Association.The fix, the MBA suggests, calls for the Federal Housing Finance Agency to require the two GSEs to accept loans with deeper levels of credit enhancement in exchange for reductions in guaranty fees and other loan-level charges.“By requiring the GSEs to offer programs such as up-front risk sharing between lenders and the GSEs, the FHFA would be taking a big step in the right direction,” said MBA President and CEO David Stevens. “Ultimately, this would put private capital, not taxpayers, in the first loss position and would allow lenders of all sizes to compete, driving down costs for borrowers.”
The two biggest components of the residential mortgage market – conventional loans below the conforming loan limits and government-insured mortgages – saw measurable declines in new originations in early 2013, according to a new Inside Mortgage Finance analysis and ranking. The conventional-conforming market – nearly all of which is financed through Fannie Mae and Freddie Mac securitization – fell to an estimated $333.0 billion during the first quarter of 2013. That was down 5.4 percent from the fourth quarter of last year, but the sector still accounted for a hefty 66.6 percent of total originations during the period. The conventional-conforming market share hasn’t changed...[Includes two data charts]
Private capital could better find its way back into the mortgage market, with decreasing costs for taxpayers and borrowers, if Fannie Mae and Freddie Mac would offer risk-sharing options to lenders at the “point of sale,” according to the Mortgage Bankers Association. The MBA first floated the concept several weeks ago at its secondary market conference in New York. In a white paper released this week, the group called on the Federal Housing Finance Agency to require the two government-sponsored enterprises to accept loans with deeper levels of credit enhancement in exchange for reductions in guaranty fees and other loan-level charges. “This new structure would bring...
The FHFA IG acknowledged the regulator's progress in stabilizing Fannie Mae and Freddie Mac but said the agency “can do more to enhance its role as conservator and regulator.”
Mortgage lenders that specialize in refinance lending have made a killing the past few years, especially call center operations with state-of-the-art technology. But is now the time for these firms to take their chips off the table or ponder a merger with more traditional lenders that have ties to real estate brokers and homebuilders? Paul Reddam, founder and president of CashCall, a top 30 lender, told Inside Mortgage Finance that he would be open to selling the company. “We would entertain an offer at any time,” said Reddam, who first made a name for himself in mortgages with Ditech Lending early last decade. Reddam noted...
After increasing for three consecutive months, the first-time homebuyer share of home purchases declined in April, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. Industry analysts suggest that the decline of first-time buyers is due to an increase in pricing for FHA mortgages and other changes aimed at reducing the FHA’s market share and losses. First-time homebuyers accounted for 35.8 percent of home purchases in the April HousingPulse survey, based on the three-month moving average, down from a 36.1 percent share the previous month. At the beginning of April, the annual premium for all FHA forward mortgages with a downpayment of less than 5 percent increased by 10 basis points. The upfront mortgage insurance premium also increased 75 basis points to 1.75 percent. Thomas Popik, research director for Campbell Surveys, said...
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