Secondary

The home purchase target for Fannie Mae and Freddie Mac would set a new 10% benchmark for qualified single-family lending in census tracts that meet certain demographic and income targets.

The wholesale lender has a cost structure aimed at beating the competition in a rising rate environment, Chairman and CEO Mat Ishbia said on the second quarter earnings call.

Depressed margins and a $219 million hit to its servicing rights fair value translated to a lower bottom line at the wholesaler.

Originations of loans to the self-employed and other outside-the-box borrowers had better margins than mainstream mortgages in the second quarter, but rebuilding after the niche market’s temporary disruption last year generated significant expenses.

Financial institutions will have until early October to weigh in about new risk-based capital requirements for nonbanks.

While the company's mortgage originations saw a 46% annual drop in gain on sale margin, it anticipates that annual volumes will exceed 2020 levels.

This year's assessment for Fannie Mae and Freddie Mac is the first to take into account a January agreement between the Federal Housing Finance Agency and the Treasury Department that allowed the companies to retain more earnings.

Shrinking gain-on-sale margins also ate into earnings, with growth expected to slow for the rest of 2021.

A jump in jumbo loan programs was countered by lenders dropping high loan-to-value conforming products.

The company attributed its second quarter loss to competitive pricing pressures and GSE-imposed charges.