Secondary markets

Equitable housing initiatives the government–sponsored enterprises detailed Wednesday will rely on mortgage company uptake of experimental underwriting strategies.

Fannie Mae and Freddie Mac asked originators to resubmit applications that contained errors and adjust sold mortgage information due to incorrect life-of-loan representations and warranties.

The inability to include both types together in standard loan pools has been one of the hurdles to the adoption of digital collateral.

However, in line with promises housing agencies have made to be cautious in their expansion of underwriting, new rules around financing for properties with accessory dwelling units still have several guardrails.

Fannie Mae and Freddie Mac will need to submit annual capital plans to the agency. The move follows the introduction of new public disclosure requirements through a separate action last week.

Dynex Capital CEO Byron Boston sees the slow process of unwinding the Fed’s balance sheet, which officially began Wednesday, as an opportunity for his company.

Privately securitized mortgages made by these institutions have already exceeded 2021 levels, however some of the collateral lacks income verification, according to a new KBRA report.

Mortgage companies selling loans to the government-sponsored enterprise will be able to use the information for one type of employment check as well as to validate income and assets.

The government-sponsored enterprises will start releasing information similar to what large banks already do, starting in the first quarter of 2023.

Non-depositories historically haven't been big originators of home equity lines of credit, but fintechs that offer the easily automated countercyclical products are reporting growth.

The acting head of the Federal Housing Finance Agency will become the first African American woman to lead the agency as a result of the vote Wednesday.

The Treasuries market is girding for potential disruptions from the next and trickiest stage of policymakers’ tightening campaign: the shrinking of an $8.5 trillion bond portfolio.

First quarter gain-on-sale at nine originators tracked by Keefe, Bruyette & Woods averaged 149 basis points, much higher than the 5 bps recorded for independent mortgage bankers tracked by the MBA.

At the Mortgage Bankers Association Secondary Conference this week, issuers noted their concern about rising delinquency levels, accusations of racial bias in lending, and whether regulators in Albany and Washington are preparing a new campaign against “abuses” in mortgage servicing, the chairman of Whalen Global Advisors writes.

The ability to produce a cohesive, visible audit trail is “like nirvana” for lenders, ICE Mortgage Technology Vice President Christopher McEntee said.

Lending that can fulfill Biden administration aims around equity and supply, like an FHA premium cut or financing for accessory dwelling units, remain possible, but late-cycle housing risk is a concern.

The White House outlined a specific role for the agency in its housing supply agenda, which has not happened before, Ginnie President Alanna McCargo said at the MBA Secondary Conference. Meanwhile, the acting head of the FHFA said preferred stock talks haven’t happened — yet.

Preliminary data from the trade group indicates that mortgage lenders an average of 5 basis points earned per loan as costs reached an all-time high.

Mid America will retain its focus on technology, third-party originations and secondary market executions for specialty products while helping the acquirer expand the scope of its operations.