FHFA: Fannie, Freddie Play Too Big Of A Role

Federal Housing Finance Agency Director Mark Calabria on Monday warned Congress that Fannie Mae and Freddie Mac play a disproportionately large role in the housing market and are badly undercapitalized – creating significant risk to the nation’s economy. In a letter to the banking and housing chairs introducing FHFA’s annual report, Calabria urged Congress to give the agency greater authority to charter competitors to Fannie and Freddie and limit their relative power in the housing market. “A root cause of the 2008 financial crisis was imprudent mortgage credit risk backed by insufficient capital,” Calabria wrote to Congress. “This fundamental problem remains unresolved today. The Enterprises are inarguably undercapitalized for their size, risk, and systemic importance. Calabria said Fannie and Freddie…

FHFA To Re-Propose Minimum GSE Financial Eligibility

The Federal Housing Finance Agency announced Monday that it will not implement new financial eligibility requirements for mortgage lenders that service or sell loans to Fannie Mae and Freddie Mac. The new requirements, announced Jan. 31, were to be implemented this month. “Due to recent market events, the Federal Housing Finance Agency … will be re-proposing the updated minimum financial eligibility requirements for Fannie Mae and Freddie Mac Seller/Servicers,” FHFA said in a statement. “FHFA has determined that it is prudent to work with the Enterprises to reassess and re-propose these requirements, including incorporating lessons learned from the evolving COVID-19 national emergency.” The revised requirements would have forced mortgage sellers and servicers to maintain a base net worth of $2.5…

FHFA Extends Loan Origination Flexibility Through July

Another month. The Federal Housing Finance Agency announced Thursday that it is extending the loan origination flexibilities currently offered by Fannie Mae and Freddie Mac designed to help borrowers during the COVID-19 national emergency.  Originally put in place at the height of the pandemic, this is the second time they have been extended – this time through July 31. They include: Alternative appraisals on purchase and rate term refinance loans;Alternative methods for verifying employment before loan closing;Expanding the use of power of attorney and remote online notarizations to assist with loan closings; andAuthority to purchase mortgages in forbearance. …

FHFA Director “Encouraged” By Forbearance Trajectory

By Jim Perskie Federal Housing Finance Agency Director Mark Calabria told Congress that forbearance rates in the United States are “manageable,” noting that the number of homeowners pausing mortgage payments has slowed considerably in recent weeks. In testimony before the U.S. Senate Committee on Banking, Housing, and Urban Affairs on Tuesday, Calabria said that the number of mortgages in forbearance were significantly lower than some had predicted. “Early in the crisis, there were a wide variety of predictions about the future effects of COVID-19 on housing markets,” Calabria testified. “Some observers contended that forbearance rates would reach as high as 25 to 50 percent. Given the unprecedented nature of the pandemic and the high degree of uncertainty about the economic…

Calabria: Congress Must Strengthen FHFA

By Jim Perskie Federal Housing Finance Agency Director Mark Calabria told Congress on Tuesday that he will submit legislative recommendations net week to strengthen the agency’s regulatory and supervisory authority “to fix structural flaws in our housing finance system.” Testifying before the U.S. Senate Committee on Banking, Housing, and Urban Affairs, Calabria also stressed FHFA had done significant work to support borrowers, renters and the housing market as a whole during the COVID-19 pandemic – but challenges lie ahead. “FHFA recognizes that more work remains,” Calabria said. “The crisis caused by COVID-19 is not over. The full economic and financial impact of the pandemic is not yet known. The future state of the labor market remains uncertain. The mortgage market is still…

FHFA Extends Flexible Loan Origination Policies

With the coronavirus pandemic firmly entrenched in much of the country, the Federal Housing Finance Agency announced Tuesday that it is extending flexible loan origination policies offered by Freddie Mac and Fannie Mae. FHFA extended the policies through at least June 30. They include: Alternative appraisals on purchase and rate term refinance loans;Alternative methods for verifying employment before loan closing;Flexibility for borrowers to provide documentation (rather than requiring an inspection) to allow renovation disbursements (draws); andExpanding the use of power of attorney and remote online notarizations to assist with loan closings.​ “These loan origination flexibilities will continue to facilitate loan closings and go a long way to keeping the market functioning effectively during this national emergency,” FHFA Director Mark Calabria…

UWM’s Ishbia: FHFA’s Calabria “A Great Leader”

United Wholesale Mortgage CEO Mat Ishbia on Tuesday called embattled Federal Housing Finance Agency Director Mark Calabria “a great leader” who is “doing good things” amid the coronavirus pandemic. “Mark Calabria is trying to do the right thing,” Ishbia said in an interview with National Mortgage Professional Magazine on Facebook Live. “It’s really easy to judge people and say I wish Mark Calabria would do X, I wish the CEO of Fannie Mae would do Y, I wish the Fed would do Z, Trump would do A. He’s doing his best to try to help not just mortgage lenders but everybody. He’s overseeing Fannie and Freddie. Ishbia continued, “I would tell him to keep up the great work, continue to listen…

FHFA: No Lump Sum On Fannie, Freddie Loans

The Federal Housing Finance Agency issued a reminder Monday that borrowers who go into forbearance will not have to repay missed payments all at once if their mortgages are backed by Fannie Mae or Freddie Mac. FHFA said the statement was issued to “combat ongoing misinformation” and urged all mortgage lenders to adopt similar policies. “During this national health emergency, no one should be worried about losing their home,” FHFA Director Mark Calabria said. “No lump sum is required at the end of a borrower’s forbearance plan for Enterprise-backed mortgages.” The $2 trillion CARES Act includes a moratorium on foreclosures and the right to forbearance. Forbearance allows borrowers with a federally backed mortgage to put off payments for at least…

Mortgage Roundup (4/23/20) – GSEs, Home Prices & Debt

Good morning! Today is Thursday, April 23. The House is expected to approve an additional $320 billion for the Paycheck Protection Program targeted to small businesses hurt by the coronavirus. Harvard will return its $9 million federal stimulus check. President Trump announced that national parks will reopen. And in mortgage and housing news … GSE’S PURCHASE: The Federal Housing Finance Agency announced that it will allow Fannie and Freddie to purchase some single-family mortgages in forbearance in an attempt to support the liquidity of mortgage lenders during the coronavirus pandemic.  HOME PRICES: Home prices in the United States rose 0.7 percent in February over the previous month – and 5.7 percent over a year earlier, the Federal Housing Finance Agency announced.   NIGHTMARE SCENARIO: MBS Highway President and…

GSEs To Purchase Some Loans In Forbearance

The Federal Housing Finance Agency announced Wednesday that it will allow Fannie and Freddie to purchase some single-family mortgages in forbearance in an attempt to support the liquidity of mortgage lenders during the coronavirus pandemic. FHFA took action in response to borrowers seeking mortgage forbearance shortly after closing on loans – and before the lender could deliver the loan to Fannie Mae or Freddie Mac (GSEs). Prior to Wednesday’s change, loans in forbearance were ineligible to be sold under Fannie and Freddie requirements, placing the borrower and the lender in jeopardy. “We are focused on keeping the mortgage market working for current and future homeowners during these challenging times,” FHFA Director Mark Calabria said. “Purchases of these previously ineligible loans…