Biden nominates president for Ginnie Mae, FHFA proposes capital rule changes and more news of the week
September 17, 2021 5:59 PM
Andrew Harrer/Bloomberg
FHFA aims to change Fannie and Freddie’s post-conservatorship plan
The Federal Housing Finance Agency is proposing to revise the post-conservatorship capital framework for Fannie Mae and Freddie Mac that was finalized under the Trump administration in order to encourage the transfer of risk to private investors and make the leverage requirements more dynamic.
Acting FHFA Director Sandra Thompson said the refinements the agency is looking to implement would enable the government-sponsored enterprises “to support the housing market throughout the economic cycle in a safe and sound manner.”
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Acting FHFA Director Sandra Thompson said the refinements the agency is looking to implement would enable the government-sponsored enterprises “to support the housing market throughout the economic cycle in a safe and sound manner.”
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Andrew Harrer/Bloomberg
Alanna McCargo gets Biden nod for Ginnie Mae presidency
President Biden nominated Alanna McCargo, a senior advisor at the Department of Housing and Urban Development, to be president of Ginnie Mae.
The quasi-insurance agency has lacked a permanent leader for more than four years. Ginnie provides backing to investors in mortgage-backed securities, ensuring that borrowers of government-backed home loans are able to capture lower interest rates.
Despite the agency’s importance to the housing market, McCargo would be the first Senate-confirmed president at the agency since January 2017.
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The quasi-insurance agency has lacked a permanent leader for more than four years. Ginnie provides backing to investors in mortgage-backed securities, ensuring that borrowers of government-backed home loans are able to capture lower interest rates.
Despite the agency’s importance to the housing market, McCargo would be the first Senate-confirmed president at the agency since January 2017.
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Trump-era GSE restrictions suspended by FHFA and Treasury
The Treasury Department and Federal Housing Finance Agency have agreed to suspend certain unpopular changes former Trump officials made in January to the government’s oversight of Fannie Mae and Freddie Mac while the Biden administration reviews the revisions.
Those changes agreed to in the waning days of the Trump administration and promulgated by former Treasury Secretary Steven Mnuchin and former FHFA Director Mark Calabria allowed the government-sponsored enterprisesto hold significantly more capital , but also baked in several restrictions to the GSEs’ activity that drew ire from lenders and community groups alike.
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Those changes agreed to in the waning days of the Trump administration and promulgated by former Treasury Secretary Steven Mnuchin and former FHFA Director Mark Calabria allowed the government-sponsored enterprises
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Andrew Harrer/Bloomberg
Lenders uncertain in wake of GSE cap suspension
A level of uncertainty remains for lenders and the secondary market following the Federal Housing Finance Agency decision to suspend the riskier loan purchase caps on government-sponsored enterprises.
The key word here is "suspend," several observers noted and that in itself doesn't provide the clarity around the issue that had been hoped for.
"Suspended means it can be unsuspended again next week, I don't think anybody really knows 100% where it's headed," said Tom Hutchens, executive vice president of production at non-qualified lender Angel Oak Mortgage Solutions.
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The key word here is "suspend," several observers noted and that in itself doesn't provide the clarity around the issue that had been hoped for.
"Suspended means it can be unsuspended again next week, I don't think anybody really knows 100% where it's headed," said Tom Hutchens, executive vice president of production at non-qualified lender Angel Oak Mortgage Solutions.
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<i>Contributed, Bloomberg News</i>
Potential FHFA head envisions Fannie, Freddie as utilities
A potential nominee to head the Federal Housing Finance Agency could offer key insight into how the Biden administration envisions the future of the mortgage giants Fannie Mae and Freddie Mac.
Speculation is mounting that Mike Calhoun, the president of the Center for Responsible Lending, is under consideration to head the FHFA. Though the White House has made no announcements about who will lead the agency, experts say nominating Calhoun would be an endorsement of spinning Fannie and Freddie into regulated utilities.
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Speculation is mounting that Mike Calhoun, the president of the Center for Responsible Lending, is under consideration to head the FHFA. Though the White House has made no announcements about who will lead the agency, experts say nominating Calhoun would be an endorsement of spinning Fannie and Freddie into regulated utilities.
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FHA sets mandatory electronic appraisal policy
The Federal Housing Administration set a date of March 14, 2022 by which all electronic appraisals must be delivered through FHA Catalyst , including those done in conjunction with Home Equity Conversion Mortgages.
Delivery of electronic appraisals through FHA Catalyst will become mandatory for single-family loans unless a previous version was submitted through legacy technology. In cases where legacy technology submissions occurred prior to March 14, 2022, the older channel can be used until April 15 of next year.
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Delivery of electronic appraisals through FHA Catalyst will become mandatory for single-family loans unless a previous version was submitted through legacy technology. In cases where legacy technology submissions occurred prior to March 14, 2022, the older channel can be used until April 15 of next year.
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Warren calls for disbandment, Wells Fargo fights back
Wells Fargo pushed back against an effort by Sen. Elizabeth Warren to force the megabank’s breakup, saying that it has made significant progress in overhauling its operations and addressing scandals.
In a letter to Federal Reserve Chair Jerome Powell that was made public Tuesday, Warren wrote that the bank is “simply ungovernable.” She asked the regulator to break off Wells Fargo’s traditional banking operations from its Wall Street activities.
The $1.9 trillion-asset bank has proved to be an “irredeemable repeat offender” despite two CEO changes and numerous regulatory penalties, including an unprecedented asset cap, Warren wrote.
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In a letter to Federal Reserve Chair Jerome Powell that was made public Tuesday, Warren wrote that the bank is “simply ungovernable.” She asked the regulator to break off Wells Fargo’s traditional banking operations from its Wall Street activities.
The $1.9 trillion-asset bank has proved to be an “irredeemable repeat offender” despite two CEO changes and numerous regulatory penalties, including an unprecedented asset cap, Warren wrote.
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Bloomberg News
Rohit Chopra has a long 'to-do' list for CFPB
A packed regulatory agenda awaits Rohit Chopra — the Biden administration's choice to lead the Consumer Financial Protection Bureau — on everything from supervising fintech lenders to assessing mortgage servicers' pandemic response.
The only problem: It's still anyone's guess when he will get the job.
Chopra is still in a holding pattern eight months after being tapped by the White House to run the agency. Analysts attribute the delay primarily to jockeying at the Federal Trade Commission, on which he currently sits, and legislative timing with the Senate negotiating the infrastructure and reconciliation bills.
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The only problem: It's still anyone's guess when he will get the job.
Chopra is still in a holding pattern eight months after being tapped by the White House to run the agency. Analysts attribute the delay primarily to jockeying at the Federal Trade Commission, on which he currently sits, and legislative timing with the Senate negotiating the infrastructure and reconciliation bills.
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Pacaso reaches $1.5 billion valuation
Pacaso, a startup offering shared ownership of vacation homes, has reached a $1.5 billion valuation after raising $125 million from investors including SoftBank Vision Fund 2.
Real estate-focused venture firm Fifth Wall, Gaingels, Greycroft, Global Founders Capital, 75 & Sunny Ventures and Crosscut also participated in the funding round, said Pacaso Chief Executive Officer Austin Allison, who co-founded the company with Spencer Rascoff.
“The capital will empower us to expand into markets domestically and outside the U.S. where there is pretty obvious desirability,” Allison said.
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Real estate-focused venture firm Fifth Wall, Gaingels, Greycroft, Global Founders Capital, 75 & Sunny Ventures and Crosscut also participated in the funding round, said Pacaso Chief Executive Officer Austin Allison, who co-founded the company with Spencer Rascoff.
“The capital will empower us to expand into markets domestically and outside the U.S. where there is pretty obvious desirability,” Allison said.
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Chris Kleponis/Bloomberg
Maxine Waters pushes for Sandra Thompson to lead FHFA
House Financial Services Committee Chair Maxine Waters is calling on President Biden to name acting Federal Housing Finance Agency Director Sandra Thompson as the agency’s permanent leader, calling Thompson “uniquely qualified” to lead the agency.
The Democrat from California released a statement late Thursday night outlining Thompson’s accomplishments as acting FHFA director in the three months she has served in the role.
Waters’ input could complicate the administration's process for selecting a chief for the regulator of Fannie Mae and Freddie Mac. Her statement came amid rumors that Biden is considering nominating Mike Calhoun, the president of the Center for Responsible Lending.
Read the full story here.
The Democrat from California released a statement late Thursday night outlining Thompson’s accomplishments as acting FHFA director in the three months she has served in the role.
Waters’ input could complicate the administration's process for selecting a chief for the regulator of Fannie Mae and Freddie Mac. Her statement came amid rumors that Biden is considering nominating Mike Calhoun, the president of the Center for Responsible Lending.
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HUD to give nonprofits first crack at 50% of its notes for sale
The Department of Urban Development dramatically increased the share of mortgage notes it plans to give community organizations first crack at in an upcoming sale.
On Nov. 10, HUD will give potential nonprofit, state and local buyers priority on 50% of loan pools containing 1,730 notes associated with vacantreverse mortgage properties. Typically just 10% of notes HUD puts up for bid are offered first to these types of buyers.
The sale will test the effectiveness of offering higher shares of note sales to community organizations, which is in line with some of theBiden administration’s affordable housing goals.
Read thefull story here.
On Nov. 10, HUD will give potential nonprofit, state and local buyers priority on 50% of loan pools containing 1,730 notes associated with vacant
The sale will test the effectiveness of offering higher shares of note sales to community organizations, which is in line with some of the
Read the
Black Knight offers LOS for mortgage brokers
Black Knight took another step toward covering every inch of the lending industry, with the release of its mortgage broker loan origination system.
Cloud-based LoanCatcher gives brokers working in the wholesale market a platform that automatically transfers data from Black Knight’s existing Empower LOS. The product was largely the result of theacquisition of NexSpring Financial in March. Black Knight spent the past six months tweaking the NexSpring product, integrating its customer relationship management and price search tools with brokers specifically in mind, Mark Besch, origination technologies product director, told NMN.
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Cloud-based LoanCatcher gives brokers working in the wholesale market a platform that automatically transfers data from Black Knight’s existing Empower LOS. The product was largely the result of the
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Home sales trend reverses course for first time since May 2020
August’s housing market followed the indicators that pointed toward a cooling off .
After bidding wars hit asix-month low in July , home sales posted an annual decrease for the first time in 15 months, according to Redfin. Completed sales dropped 6% annually in August and 1.4% monthly. Meanwhile, pending sales grew 7% from August 2020 and 6.1% from July.
The decline in total properties sold didn’t slow the rate of price growth, however. August marked the 13th straight month of double-digit annual gains, posting a 16.2% jump in median sales price to $380,300. Prices did, however, dip 1% month-over-month.
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After bidding wars hit a
The decline in total properties sold didn’t slow the rate of price growth, however. August marked the 13th straight month of double-digit annual gains, posting a 16.2% jump in median sales price to $380,300. Prices did, however, dip 1% month-over-month.
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Purchases bump weekly mortgage volume
Purchase activity hitting its highest point since April led to heightened mortgage volume in a shortened holiday week, according to the Mortgage Bankers Association.
The Market Composite Index, a measure of mortgage-application volume based on surveys of MBA members, came in 0.3% higherweek over week for the period ending Sept. 10 on a seasonally adjusted basis. The unadjusted index fell 10% during the abridged Labor Day week. Compared to the levels of one year ago, seasonally adjusted volume declined 6.5%.
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The Market Composite Index, a measure of mortgage-application volume based on surveys of MBA members, came in 0.3% higher
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Investor wariness keeps interest rates in holding pattern
Mortgage rates remained relatively flat, consistent with their late-summer trend, as latest monthly inflation data did little to move the needle.
The 30-year fixed-rate mortgageinched down two basis points to 2.86% from 2.88% for the period from Sept. 10-16, according to the latest Freddie Mac Primary Mortgage Market Survey. The latest average is at a similar level compared to the same week one year ago when it stood at 2.87%.
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The 30-year fixed-rate mortgage
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Startup raises capital for all-cash financing
The fintech startup Ribbon announced that it raised $75 million in Series C funding and $75 million in working capital.
Through its platform, Ribbon provides borrowers with upfront financing to make all-cash offers on home listings. The fintech aims to strengthen consumer bids against those from real estate developers and investors.
Across the country , investors are making up a larger portion of single-family home buyers. In the second quarter, investor purchases and dollar volume spent in the sector were more than double from the same period the year before, according to a Redfin study.
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Through its platform, Ribbon provides borrowers with upfront financing to make all-cash offers on home listings. The fintech aims to strengthen consumer bids against those from real estate developers and investors.
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Covius adds to its post-close products
"One of our primary goals is to create a counterbalanced, diversified earnings business model," said Rob Clements , Covius Holdings' chairman and CEO. "Over time we've been able to really diversify with products and services that are targeted towards the origination business, servicing-related businesses and with the Clayton acquisition, now we have strong capital markets capabilities."
The acquisition of Nationwide Title Clearing allows the company to draw revenue in any macroeconomic environment and interest rate cycle for the mortgage business, similar to the natural hedge between originations, servicing and capital markets that many lenders rely upon, Clements said.
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The acquisition of Nationwide Title Clearing allows the company to draw revenue in any macroeconomic environment and interest rate cycle for the mortgage business, similar to the natural hedge between originations, servicing and capital markets that many lenders rely upon, Clements said.
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Genworth reduces IPO pricing for mortgage insurance spin-out
After long wait, Genworth Financial will launch the initial public offering for its mortgage insurance business, Enact Holdings.
However, both the size and the expected price range have been reduced to approximately 13.3 million shares to be sold (with another nearly 2 million for an underwriters option) to be priced between $19 and $20 per share.
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However, both the size and the expected price range have been reduced to approximately 13.3 million shares to be sold (with another nearly 2 million for an underwriters option) to be priced between $19 and $20 per share.
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Ginnie Mae cuts borrowers more slack
Ginnie Mae has extended relief aimed at addressing the impact of forbearance on mortgage companies’ ability to meet typical delinquency thresholds for the third time, pushing the deadline further into next year.
The insurer of securitizations backed by certain types of government loans is giving issuers an additional six months of leeway for mortgages made on or after April 2020 to account for temporary payment suspensions offered to borrowers with pandemic-related hardships. The move suggests Ginnie doesn’t expect to see loan performance return to normal levels until next summer.
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The insurer of securitizations backed by certain types of government loans is giving issuers an additional six months of leeway for mortgages made on or after April 2020 to account for temporary payment suspensions offered to borrowers with pandemic-related hardships. The move suggests Ginnie doesn’t expect to see loan performance return to normal levels until next summer.
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The biggest and latest mortgage job moves and promotions
Mr. Cooper, NMI, FHL Bank of Boston made C-suite promotions.
Meanwhile, Geneva Financial and Homespire boosted secondary market teams and NFM Lending hired a strategy officer from Fannie Mae.
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Meanwhile, Geneva Financial and Homespire boosted secondary market teams and NFM Lending hired a strategy officer from Fannie Mae.
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