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Inside Mortgage Finance

October 9, 2008

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GSE Business Slumped in Third Quarter as New Lending Fell Sharply and FHA Gained Share

Fannie Mae and Freddie Mac reported significant declines in the volume of new MBS guaranty business during the third quarter as the government-sponsored enterprises continued to gradually tighten their underwriting. Mortgage lenders delivered a total of $171.64 billion of single-family mortgages to GSE securitization programs in the third quarter, making it... [Includes three charts] Read More

Treasury Rushes to Set up $700 Billion TARP As Feds Struggle to Stabilize Financial System

The Treasury Department this week launched headlong into the complex process of spending $700 billion to shore up a financial market that’s finding new problems around every corner. If you were interested in working on the new Troubled Asset Relief Program as an asset manager, accountant, auctioneer or other “infrastructure services” provider, you had about three days to... Read More

Countrywide, State AGs Settlement a Win for Bank of America, States, Consumers and H4H

Bank of America’s nationwide loan modification program announced this week appears to settle a festering legal liability it inherited from Countrywide without requiring the company to spend any more money than it expected to pay on the latter firm’s beleaguered subprime and option ARM business. Approximately 400,000 troubled Countrywide borrowers nationwide will get relief from an... Read More

New Study Suggests Homeowners May Have Tough Time Weathering Economic Problems

A residential mortgage market that already has been battered by a storm of badly underwritten loans is now facing a new wave of problems created by a rapidly deteriorating U.S. economy that is in-creasing unemployment at an alarming rate. According to a new Inside Mortgage Finance-sponsored study, mortgage borrowers may be more vulnerable than ever to an economic downturn given that the two... Read More

GSEs Give Little Back to the Market in First Stab at New Focus on ‘Affordability’

Fannie Mae and Freddie Mac took the smallest steps possible toward a retooled mission in the mortgage market by separately announcing that they would cancel pending fee hikes for mortgages on properties in adverse housing markets. The government-sponsored enterprises were sharply criticized by some housing groups for a series of moves over the past two years to impose new delivery charges on higher... Read More

Congress Approves Higher Loan Limits For VA, Broader Refinance Options

Lost in the tumultuous waning days of the 110th Congress, lawmakers approved a veterans benefits bill that raises loan limits for home loans guaranteed by the Veterans Administration and expands refinance options under the program. The “Veterans’ Benefits Improvement Act of 2008” has been approved by both the House and the Senate and sent to the White House, where the... Read More

Wachovia’s Future Up in the Air as Dueling Suitors Contemplate Carving Up the Firm

The outcome of ongoing negotiations between Citigroup and Wells Fargo over the future of Wachovia will have little effect on the rapid consolidation in the mortgage servicing business. No matter which firm winds up with Wachovia’s mortgage operations, the top four companies in the market still end up with over 54 percent of the mortgage servicing market. The only... Read More

New FHFA Rule Would Help Lenders Participate in H4H, But Small Dollar Amount Means Only Modest Market Benefit

The Federal Housing Finance Agency is freeing up Federal Home Loan Bank affordable housing subsidies to help lenders take advantage of the new HOPE for Homeowners program. One of the toughest pills to swallow in the H4H program is the requirement that first mortgage lenders agree to hefty writedowns of the loan before it is refinanced into a new FHA mortgage... Read More

Lenders Call for More Flexible H4H Guidelines As HUD Stumps for Foreclosure Alternatives

Lenders this week called for some flexibility in the government’s $300 billion borrower-rescue scheme HOPE for Homeowners, particularly in the sharing of future equity gains on refinanced properties that could make voluntary writedowns more palatable. The suggestion came up at a national housing summit sponsored by the Department of Housing and Urban Development during discussions of... Read More

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