GSE Buybacks Fall to Second-Lowest Reading Ever
jbancroft@imfpubs.com
Mortgage sellers had to repurchase fewer defective loans from Fannie Mae and Freddie Mac mortgage-backed securities during the first quarter of 2019, although the inventory of pending repurchase claims rose during the period, according to a new tally from Inside The GSEs.
GSE sellers repurchased just $181.2 million of single-family mortgages during the first three months of the year, the second-lowest quarterly buyback total on record. The lowest three-month total, $173.3 million, was posted in the third quarter of last year.
While total GSE buybacks fell 6.0% from the fourth quarter, Fannie reported a much larger drop, 38.2%, in early 2019. Sellers repurchased only $17.3 million in defective loans during the first three months of the year, an all-time low for Fannie.
Freddie repurchases were down as well, but only by 0.5%, highlighting a persistent gap between the two GSEs. For more details and exclusive tables on Fannie/Freddie buybacks, see the new edition of Inside The GSEs, now available online.
Another Rate Drop, and Presto: More Refi Candidates are Created
pmuolo@imfpubs.com
With the interest rate on 30-year fixed-rate conventional mortgages falling to 3.73% last week, an additional 1.3 million mortgagors fell into the category of having an incentive to refinance, according to figures released Monday morning by Black Knight Inc., Jacksonville, FL.
The data analytics firm estimates there are now 8.2 million existing mortgagors who are refi candidates, the largest such cohort since late 2016.
Since November of last year – when rates peaked – 6.3 million mortgage customers have become more likely to refi into a lower-rate mortgage.
Greater refi activity should lead to an increase in originations in the coming months with lending profits fattening the coffers of mortgage bankers from coast to coast.
However, there is a downside to lower rates: An increase in refis most assuredly will lead to writedowns on mortgage servicing portfolios.
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