Origination

Fannie Mae provided $10.1 billion in debt financing for the multifamily rental housing market through its lender and housing partners in the first half of 2009. At a press conference held Monday in Washington, Fannie's vice president of multifamily production Heidi McKibben said that, of the $10.1 billion in debt financing the government sponsored enterprise provided, $9.9 billion of the company's total investment in multifamily housing were delivered. All of the business delivered by this group utilized the company's delegated underwriting and servicing platform, which provides liquidity to multifamily housing projects. "Fannie Mae and its DUS lenders had a very strong first half of the year," said Phil Weber, senior vice president of Fannie's multifamily division, adding that reinvigorating its mortgage-backed securities business and broadening the investor base was Fannie Mae multifamily's top priority in 2009. According to the GSE, 71% of total production in the first half of 2009 was an MBS execution, compared to 17% in the first half of 2008.

House appropriators have instructed the Federal Housing Administration to cut the proceeds seniors receive when taking out a FHA-insured reverse mortgage in fiscal year 2010, which starts Oct. 1. The Obama administration originally asked the appropriators to provide FHA with an $800 million credit subsidiary to cover possible losses coming from declining house prices. However, HUD secretary Shaun Donovan told Congress he was willing to make changes to the FHA Home Equity Conversion Mortgage program to offset some of the losses, but he did not want to increase the mortgage insurance premiums. The House Appropriations Committee approved a Department of Housing and Urban Development appropriations bill on July 17 that instructs HUD to reduce the principal amount a senior can receive on a HECM. The principal limit is based on the borrower's age and the expected interest accrual over the life of the loan. The committee's action "reduces what seniors will get, which is problematic at a time when there is great need," said Peter Bell, president of the National Reverse Mortgage Lenders Association. "We might find that some people that want a reverse mortgage won't be able to get enough money to pay off their existing mortgage. They will be forced to sell the house and move."

The House Appropriations Committee has approved an extension of the $729,750 loan limits for Fannie Mae, Freddie Mac and the Federal Housing Administration through September 2010. The committee also increased the lending and guarantee authority of FHA and Ginnie Mae, as requested by the Obama Administration. The Department of Housing and Urban Development appropriations bill authorizes FHA to insure $400 billion in single-family loans during fiscal year 2010, up from $315 billion in the current 2009 fiscal year, which ends Sept. 30. The FY 2010 appropriations bill allows Ginnie Mae to guarantee up to $500 billion in securities backed by single-family and multifamily loans. Congress provided the secondary market agency with $400 billion in MBS guarantee authority in the FY 2009 appropriations bill. The massive stimulus bill that President Barack Obama signed in February raised the maximum loan limit for the GSEs and FHA to $729,750. But the higher limit is due to expire at year-end, if the full House as well as the Senate does not approve this bill.

The House Appropriations Committee has approved an extension of the $729,750 loan limits for Fannie Mae, Freddie Mac and the Federal Housing Administration through September 2010. The committee also increased the lending and guarantee authority of FHA and Ginnie Mae, as requested by the Obama Administration. The Department of Housing and Urban Development appropriations bill authorizes FHA to insure $400 billion in single-family loans during fiscal year 2010, up from $315 billion in the current 2009 fiscal year, which ends Sept. 30. The FY 2010 appropriations bill allows Ginnie Mae to guarantee up to $500 billion in securities backed by single-family and multifamily loans. Congress provided the secondary market agency with $400 billion in MBS guarantee authority in the FY 2009 appropriations bill. The massive stimulus bill that President Barack Obama signed in February raised the maximum loan limit for the GSEs and FHA to $729,750. But the higher limit is due to expire at year-end, if the full House as well as the Senate does not approve this bill.

The average rate for the 30-year fixed-rate mortgage fell to 5.14% during the week of July 16, down six basis points from the previous week, according to the Freddie Mac Primary Mortgage Market Survey. Lenders charged an average of 0.7 points for a 30-year FRM. The average rate on a 15-year FRM was 4.63% with a 0.7 point. The five-year Treasury indexed adjustable rate mortgage averaged 4.83%, up slightly from 4.82% the previous week. "Average fixed rate mortgage rates were lower than last week and were down 0.4% to 0.5% from the levels of early June," said Freddie Mac chief economist Frank Nothaft.

Catherine Cruz Wojtasik, a Democratic lobbyist for the Mortgage Bankers Association, is leaving the trade group to take a job on Capitol Hill. A MBA spokeswoman confirmed her departure noting that it will hire a replacement for Ms. Wojtasik. It's believed that she has accepted a position with the Senate Banking Committee but at press time it could not be confirmed. Meanwhile Cheryl Malloy, who handles multifamily issues for MBA, is retiring soon but will stay on as consultant through September.

Citigroup reported net income of $4.3 billion for the second quarter of 2009, after taking $2.4 billion in credit losses on its residential mortgage portfolio. The New York banking giant said $12.1 billion or 6.5% of its residential loans are 90 days or more past due. On a dollar basis, seriously delinquent loans are up 88% from a year ago. The company did tout the fact that since 2007, it has worked with 625,000 homeowners to avoid a potential foreclosure on mortgages totaling over $67 billion. The second-quarter earnings report also shows that Citigroup reported a mark-to-market gain of $613 million on its subprime-related direct exposures (as opposed to a loss one year prior of $3.4 billion). It reported a loss of $390 million on mark-to-market and impairments on alt-A mortgages (one year prior, there was a loss of $277 million). Mark-to-market on its commercial real estate positions resulted in a loss of $354 million, an improvement from a loss of $480 million for the second quarter 2009.

The mortgage insurance division of Genworth Financial is removing 136 metropolitan areas from its "Declining/Distressed Markets" list which will effectively loosen loan-to-value requirements and FICO scores for certain borrowers. The changes are effective Monday, July 20. On Friday the company would not provide the identity of the markets removed with a spokesman saying the metro areas are on an "internal site and protected so they can't be copied." However, Genworth is telling its lender clients that 14 states "in their entirety" will remain on the list. The 13 include Arizona, California, Connecticut, Florida, Hawaii, Maryland, Michigan, Nevada, New Hampshire, New Jersey, Oregon, Rhode Island, Utah and Vermont. In Arizona, California, Florida and Nevada the minimum FICO score is 720. In California Genworth will not insure loan amounts north of $417,000.

Bank of America saw its residential mortgage income increase more than fivefold in the second quarter to $2.6 billion as it originated $110 billion worth of home loans during a strong refinancing boom. Refinancings accounted for 71% of its residential loan production. In the year-ago quarter, the bank did not own Countrywide Financial Corp., which at the time was still the nation's largest lender. Even though BoA posted strong mortgage (and overall results) its 2Q mortgage earnings fell compared to 1Q when it earned $3.4 billion.

The Federal Reserve Board will consider amendments to the Truth in Lending Act placing new restrictions on mortgage broker compensation. "The proposal will include new rules governing mortgage originator compensation," Fed governor Elizabeth Duke said. The proposed rule — which the Fed will take up on July 23 — also includes "re-redesign, consumer tested disclosures and rule changes for closed-end mortgages and home-equity lines of credit," Ms. Duke told a congressional panel. The Fed punted on regulating broker compensation and yield-spread premiums last July when it approved a Home Ownership and Equity Protection Act rule to clamp down on abusive lending practices that led to the subprime meltdown. However, Fed chairman Ben Bernanke directed staff to continue their efforts to address the issue. He noted YSPs that brokers receive from lenders are based on the interest rate, which "on its face seems to be an incentive for steering borrowers into higher price loans."