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 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…

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…

Share Of Mortgages In Forbearance Jumps To 5.95%

By Jim Perskie The number of loans in forbearance continues to rise, with nearly 6 percent of all mortgages in pause as borrowers cope with economic hardship caused by the coronavirus pandemic. The share of loans in forbearance climbed from 3.74 percent to 5.95 percent as of April 12, according to the Mortgage Bankers Association’s Forbearance and Call Volume survey released Monday. That amounts to roughly 3 million mortgages. Before the pandemic took hold of the economy, about 0.25 percent of mortgages were in forbearance. “With over 22 million Americans filing for unemployment over the past month, homeowners are contacting their mortgage servicers seeking relief, leading to a sharp increase in the share of loans in forbearance across all loan…

The Calabria Files: Very, Very Wrong

Federal Housing Finance Agency Director Mark Calabria said on April 1 he expected 300,000 Fannie Mae and Freddie Mac loans – or 1 percent of their mortgages – to go into forbearance in April. Less than three weeks later, he’s way, way off. The Mortgage Bankers Association reported that 4.64 percent of Fannie and Freddie loans were in forbearance as of April 12. And an analysis by financial technology firm Black Knight found that there were nearly 1.4 million Fannie and Freddie loans in forbearance as of Friday, April 19 – representing 4.9 percent of their mortgages. Calabria made his original prediction of 300,000 on CNBC on April 1, prefacing them by saying they were very preliminary and may change: …