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GSE Business Rebounds in 2Q as Purchase Mortgages Gain Strength

The anxiously-awaited Spring surge in purchase-mortgage lending finally arrived at Fannie Mae and Freddie Mac during recent months, according to a new Inside Mortgage Finance ranking and analysis of loan-level data from the two government-sponsored enterprises.

The two GSEs issued $141.83 billion of single-family mortgage-backed securities during the second quarter, an encouraging 9.4 percent increase from the dreary levels recorded in the first three months of 2014. During the first quarter of this year, Fannie/Freddie MBS production set a 14-year low of just $129.21 billion.

Clearly, the market isn’t out of the woods yet. The April-June cycle generated the second lowest quarterly volume since the end of 2008, and refinance volume continues to reach new lows – falling another 8.5 percent from the previous quarter. Year-to-date MBS production by Fannie and Freddie was down 60.9 percent from the first half of 2013.

But the GSEs saw a solid 15.2 percent increase in single-family MBS issuance from May to June, which produced $51.59 billion in business, the best month so far this year. For more on the story, plus an exclusive ranking of the nation’s top GSE sellers for the first six months of the year, see the new edition of Inside Mortgage Finance.