Demands for loan quality aren't just coming from regulators and the government-sponsored enterprises. Secondary market partners and investors don't want to be left holding the bag if loans that lenders create have quality issues.
Fannie Mae's first-quarter profits were enough for it to rebuild its minimum capital buffer and pay the Treasury Department dividend after being forced to take a draw during the previous fiscal period.
If Freddie Mac's credit-risk transfer activities continue to grow, mortgage lenders could eventually see a reduction in the guarantee fees they pay to the government-sponsored enterprise, according to CEO Donald Layton.
The future secondary mortgage market entities will receive high investment grade ratings, even as there is no clarity on their scope or form, Fitch Ratings said.
Credit unions favor housing finance reforms that would keep the government-sponsored enterprises or something similar in place, but add an explicit government guarantee to their mortgage-backed securities, according to a recent survey.
As inflation fears put upward pressure on 10-year Treasury bonds and mortgage rates nationally, borrowers could start to take more notice of what lenders are charging them locally.
