GSEs

Fannie Mae and Freddie Mac’s underserved markets plans usually cover a three-year period, but their terms have been shortened due to the pandemic.

When the Uniform Residential Loan Application transition deadline hits on March 1, a data set within Fannie Mae’s Desktop Underwriter Program, which many lenders have used for a host of functions, will no longer be supported and unprepared lenders could later experience disruption.

With limited plan removals due to the holidays, mortgages in coronavirus-related forbearance rose by 15,000, according to Black Knight.

The reference pools of mortgages supporting the credit-risk transfer notes sold by Fannie Mae and Freddie Mac were 'generally lower' in delinquencies per newly issued monthly reports, says DBRS Morningstar.

The top Democrats on the House and Senate banking committees urged the Trump administration to pull the plug on any steps to overhaul Fannie Mae and Freddie Mac with the pandemic still taking a toll on the economy.

With infection rates rising and unemployment claims increasing since Thanksgiving, mortgages in coronavirus-related forbearance rose by 37,000 last week, according to Black Knight.

Treasury Secretary Steven Mnuchin has all but ruled out letting Fannie Mae and Freddie Mac exit U.S. control before he steps down, leaving it to the Biden administration to decide the fates of the mortgage giants.

Last year, smaller lenders were put at a slight disadvantage in terms of what they were charged in guarantee fees when they sold loans for cash.

While 12,000 mortgages exited forbearance, the most borrowers entered forbearance protection in a week since early September, according to Black Knight.

But late payments for all other investor types rose compared with the second quarter.

The consumer bureau's revamp of criteria for "qualified mortgages," a special regulatory class of loans free from liability, emphasizes pricing instead of a borrower's debt-to-income ratio.

The average per-loan profit margin remains incredibly strong, but the share of senior executives expecting it to fall has risen markedly.

Even government-sponsored enterprise loans, which have seen forbearance rates drop for 24 weeks in a row, saw a slight uptick.

The price increase illustrates the extent to which federal rescue programs and a supply-demand imbalance have been counterweights to economic pressures from the pandemic.

The Structured Finance Association fears Treasury Secretary Steven Mnuchin may release the government-sponsored enterprises from conservatorship ahead of the change in administration, and that doing so could disrupt the mortgage-backed securities market.

To truly manage risk, banks must invest in more sophisticated modeling, reporting and analytics to track market movements and ultimately maximize profitability, Vice Capital Markets’ Christopher Bennett says.

The move follows a report last year that the government-sponsored enterprise was looking into working with the provider of artificial intelligence-driven credit-risk models.

The Trump administration has moved forward on a plan to privatize Fannie Mae and Freddie Mac, but Joe Biden appointees could take steps to slow or stop their release from conservatorship.

The new capital framework for Fannie Mae and Freddie Mac is a prelude to letting the mortgage giants potentially retain all their earnings. But efforts to privatize the companies could face pushback from the Biden administration.

The 2021 cap is still pretty high, historically speaking, but it’s down from the cap the Federal Housing Finance Agency put in place for a five-quarter period last year.