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Basel III Final Rule Keeps Proposed MSR Treatment, but Abandons Risk Weights
By Thomas Ressler
The Federal Reserve Board Tuesday morning unanimously issued a revised Basel III final rule that abandons the proposed changes to the risk-weighting of residential mortgages.
Officials cited community bank concerns about the complexity of calculating loan-to-value ratios under the proposed regime, as well as concerns about the unknown interaction the proposed changes would have with other mortgage-related rulemakings confronting the industry, most notably the Consumer Financial Protection Bureau’s “qualified mortgage” standard as well as the qualified residential mortgage definition, which is still in development by federal regulators.
“In light of new regulations designed to improve the quality of mortgage underwriting as well as continued uncertainty regarding the aggregate impact of pending mortgage-related rulemakings, the draft final rule does not include the proposed risk weights and instead incorporates the risk weights for residential mortgages under the general risk-based capital rules, which assign a risk weight of either 50 percent (for most first-lien exposures) or 100 percent for other residential mortgage exposures,” the Fed said.
However, the Fed Basel III final rule will go ahead with the proposed changes related to mortgage servicing rights – but with a “lengthy transition period.”
GSE Business Declined in 2Q13, Refis Drop but Purchase Volume Rises
By John Bancroft
The volume of new business flowing through Fannie Mae and Freddie Mac – a lagging indicator of primary market originations – declined modestly during the second quarter of 2013.
The two government-sponsored enterprises securitized $337.7 billion of single-family mortgages during the second quarter, down 5 percent from the first three months of the year. The decline reversed an upward trend in quarterly GSE production that started in the third quarter of 2012. Even with the downturn, business at Fannie and Freddie climbed 20 percent over the first six months of last year.
The second quarter decline clearly reflected a slowdown in refinance activity. The GSEs securitized $256.8 billion of refi loans during the period, off almost 14 percent from the first quarter. Fannie and Freddie financed $552.4 billion of refinance loans during the first half of 2013, a 17 percent increase over the same period last year.
The silver lining is a strengthening home-purchase market. Fannie and Freddie securitized $81.7 billion of home-purchase mortgages during the second quarter, their highest quarterly volume since the second quarter of 2009, when temporary tax breaks for homebuyers spurred $88.76 billion in purchase-mortgage business for the two GSEs.
It’s Official: GSEs Pay $66.4 Billion in Dividends to U.S., but Their Share Prices Suffer
By Paul Muolo
Fannie Mae and Freddie Mac forked over a combined $66.4 billion in dividends to the U.S. Treasury at the end of June with more payments – though not as large – expected for quarters to come.
Fannie paid the Treasury Department roughly $59.4 billion, Freddie $7 billion. A large chunk of their recent profits are tied to “deferred tax assets” which involve the recapture of money originally given to them by Treasury to bolster their capital positions. But both are now solidly profitable on an operating basis as well. The dividend payments were expected and foretold in earlier SEC filings.
Meanwhile, in recent weeks, the trading value of their common stock has slumped with speculators becoming somewhat weary about the prospects of the two ever coming out of conservatorship and being converted back into “private” entities.
In trading Wednesday, Fannie’s stock was selling for $1.69, compared to an early June high of $4. Freddie stock was trading at $1.54 compared to an early June high of just under $4.
Legislation has been introduced in the Senate to put them out of business, replacing the two with a new government guarantor that will offer “catastrophic” mortgage insurance with the private sector taking the first-loss position. A House bill is anticipated by the end of July.
Be on the lookout for up-listing soon
she's running guys, let her run. I repeat let her run lol
lets hope 100m
I'm a newbie, what are some good books I can read to be a good trader/investor
Friday, Jun 28, 2013
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What We’re Hearing: Cerberus Buys a Mortgage Firm? / Fear and More Fear for Jumbo Issuers / Freedom Sizes its Broker Network at 2,500 Strong / Mortgage Insurers Raise $8 Billion in Capital
By Paul Muolo
Remember the IPO filing by Cerberus Mortgage Capital, which hit the SEC’s shelves back in early February? So far, there’s been no movement on the deal, but industry sources say that hasn’t stopped Cerberus from being active in the mortgage space. Within the past 10 days, a unit of Cerberus called First Key Holdings bought a mortgage company based in Georgia, according to one source who was briefed on the transaction. There’s talk that First Key/Cerberus may move the business to Westchester County in New York and that some former Lehman officials are involved. At this point, details are sketchy. Former Freddie Mac executive Bruce Witherell is in charge of CMC and perhaps First Key. CMC’s original goal was to buy agency and non-agency MBS, but also whole loans and mortgage servicing rights…
And in case you didn’t know, Cerberus hasn’t exactly had a stellar record in mortgages. Before the housing bust, the company (which operates dozens of funds) bought a little company called GMAC Mortgage, which eventually became the property of Uncle Sam…
So, we don’t need Fannie Mae and Freddie Mac and the private market can provide for all? Don’t bet on it. The recent rapid rise in rates has jumbo securitizers spooked. At an Inside Mortgage Finance webinar Thursday the headline was clear: No new jumbo MBS deals, for now…
How high can the servicing acquisition market go? Most potential MSR buyers like Ocwen and Nationstar say $1 trillion in (mostly legacy) servicing rights will change hands the next two years. But a new IPO filing from Cherry Hill Mortgage Investment Corp. says the potential market is $2 trillion. Cherry Hill – which has yet to go public – is an affiliate of Freedom Mortgage…
Freedom, by the way, is privately held. The company was launched back in 1990 by Stan Middleman and rarely reveals much information about itself. But thanks to the Cherry Hill IPO filing all that is changing. In fact, once CHMIC goes public Middleman (via CHMIC) will be revealing a whole lot more about the firm’s financial position. Here are two tidbits about Freedom courtesy of the IPO filing by its REIT: the nonbank lender has a network of 2,500 loan brokers that it uses. Its subservicer of choice is LoanCare Servicing Center which is part of FNF Servicing Inc. FNF is actually owned by Fidelity National Financial, the publicly traded title insurance giant…
We’re told that Stan Middleman picked the name Cherry Hill because it’s his home town. But it’s also where Freedom is based. That’s New Jersey, by the way…
Have mortgage insurance companies raised $8 billion in capital over the past few years? It’s a figure that Shellpoint chairman Lewis Ranieri recently mentioned in a policy speech in Washington, citing the health of the sector. We know that two relatively new players in the MI space – Essent and National MI – each raised $500 million. (Goldman Sachs is one of Essent’s backers.) But where did the $8 billion figure come from? We’re told that a former mortgage insurance executive working for Ranieri dug it up. The figure comes from an open and operating MI.
She's on another run. Same as last run
That's how it always is. With all the manipulated and misleading news we know FnF will win in the end. It's all a game, if people start paying attention they'll notice it too
Enough said, thank you
I agree with that. I wasn't getting mad at you. He repeatedly kept saying the reason for the financial crisis was because people that were not qualified to repay the loans back were getting loans. He basically saying that it's not the fnf fault it was the banks, and that's exactly why they're getting sued.
The media is full of crap, I personally want to kick cramer's and all the stuff on cnbc's butt. It's funny how on Tuesday they reported about Corker introducing the bill but they did not say anything about Watt's nomination.
It's all polotics
He is, people are just talking shit. He basically said if congress come out with the bill to abolish the gse that he would have no choice but to abide by what they're saying. Man people are so full of it. He also said he wanted them to be privatized.
Why don't you go watch the video and tell me when he ever said that please. Thank you
lol, you can tell who's new to this board.
I have etrade also and its not showing that
What are you talking about? Bid is at 1.02x100 and ask at 1.50x100
funny huh?
I'm gone ask this question again. How come we didn't go below $1 yesterday or today? I'm really starting to think they want fnf to be up listed. There have to be a reason why they didn't let it go below $1
Mark my word, don't worry about Monday. What happened the last time we had a holiday? The market will be close next Thursday then as usual every Friday fnma grows leg and will run. Next week will be a great week, firework lol
Rep. Mel Watt Promises an ‘Open and Transparent’ FHFA If Confirmed
By Charles Wisniowski
The man who might be the next director of the Federal Housing Finance Agency assured Senators during his confirmation hearing Thursday that the agency under his leadership will operate in an “open and transparent manner working with all stakeholders” but was a bit fuzzy on details.
“You can also be assured that we’ll continue to build a solid bridge from where we are now to whatever you decide the future housing finance system will be,” said Rep. Mel Watt, D-NC, in his prepared testimony. “We’ll continue to test risk-sharing models that move housing finance aggressively to the private sector, and we’ll cooperate fully and be a resource to members of the Senate and the House as you decide the future of housing finance.”
Watt’s slightly more than two pages of prepared testimony was long on biographical detail but lacking on mortgage-finance specifics. The 20-year House veteran was one of five government agency nominees appearing before the Senate Banking Committee.
Ranking Member Sen. Mike Crapo, R-ID, took aim at Watt’s qualifications to serve as GSE regulator and conservator. “Because the powers of this position are so unique and unparalleled within government, any nominee to this important position must be politically independent and must have the necessary policy and technical expertise,” said Crapo. “Additionally, the nominee must understand the business strategies necessary to operate two multi-trillion dollar companies in a manner that conserves their assets until Congress determines our future housing finance system.”
Thursday, Jun 27, 2013
Mortgage Banking: It’s All About Rates, Still Purchase-Money Holding Up
By John Bancroft, Paul Muolo
Effective interest rates being quoted for 30-year fixed-rate Fannie Mae/Freddie Mac mortgages shot up to 4.64 percent in this week’s primary market sampling by Inside Mortgage Finance, a 42 basis points increase from last week. A month ago, the average rate was 3.78 percent.
Meanwhile, lenders continue to talk about declining refi applications but purchase-money firms remain mostly optimistic about their prospects.
One loan officer who works for a top five lender told IMF that, “Purchasers have woken up. Lots of them are flocking in.” This LO, who was not authorized to talk by his company, works in the greater New York metropolitan area. He typically closes 12 to 15 loans per month.
Bill Dallas, CEO of Skyline Home Loans, said his purchase volume has held up but said some of his competitors that focus solely on refis have pipelines that are off 35 to 40 percent from their peaks.
If they get rid of FnF Watt won't have a job.
Did any of you guys thought to yourself why they didn't let it go below $1.00
unnhh lol
Why didn't you quote the rest of his statement? He said that 5 years ago when the economy was fd up. GO somewhere else with that negativity
Short Takes: Origination Profits Tumble 21 Percent / Former Senate Staffer on Corker-Warner: Are They Sniffing Glue? / Lender Pulls Out of New Jersey Because of Fraud? / White House GSE Petition Running out of Time
By Paul Muolo, Charles Wisniowski
Are the salad days over when it comes to origination profits? Well, not quite yet, but it appears the industry is in for some leaner times. According to new figures compiled by the Mortgage Bankers Association, “independent” mortgage firms made an average profit of $1,772 on each loan they originated in the first quarter of 2013, down 21 percent from the fourth quarter of last year. “The average firm’s production volume dropped about 10 percent in the first quarter. On a per-loan basis, the combination of lower revenues and rising costs resulted in lower profits compared to the previous three quarters,” said MBA associate vice president of industry analysis Marina Walsh. “Nonetheless, the margins remain strong in comparison to other quarters since 2008”…
The reactions continue to pour in concerning the Corker-Warner GSE bill. This comment comes from a former Senate Banking Committee attorney who still does occasional work for the FHLBs: “Are they sniffing glue these days in the Senate? Who thought it would be a good idea to create a mortgage guaranty corporation with a federal guarantee that has no agency overseeing its operations?”…
A large money center bank is contemplating halting its purchases of mortgages backed by two- to four-family units in New Jersey because of concerns about fraud. One loan officer who relayed the story to Inside Mortgage Finance described the situation as “off-the-charts fraud frequency.” And no, Tony Soprano’s name did not come up in regard to mortgage fraud…
With only a handful of days to the deadline, organizers behind a White House petition demanding that the government “restore fairness” to Fannie Mae and Freddie Mac common shareholders are hoping to beat the odds by rallying some 95,000 additional signatures by Monday, July 1. White House rules call for 100,000 signatures within 30 days of a petition’s creation in order to merit an official administration response. Despite an initial swell in the autograph count when IMFnews Daily first reported on the issue three weeks ago, the tally on Wednesday morning stood at less than 4,500 signatures…
Compensation for directors at each of the 12 Federal Home Loan Banks increased in 2012, continuing a trend begun in 2011. The Federal Housing Finance Agency’s fifth annual report to Congress noted that during 2012, the total fees paid to all FHLBank directors were $12.1 million, ranging from $679,817 for the 14-member board of the FHLBank of Seattle to $1.44 million for the 18-member board of the Indianapolis Bank. For more on the story, see the recent edition of Inside The GSEs.
We're expecting news tomorrow right?
No, just fear. It can also be people taking advantage to flip it
At least the bill got introduced and we can track it now. I think it's a good thing they came out with it. We probably won't hear from them for a while which should bring the pps back up. GLTA
Its not going to happen in one day
How did you come up with that conclusion?
link please
might be able to find it on cspan
If that happen I will clear out my bank accounts and bet it all on FNMA. Lmao