Inside Mort Finance 2
Mike SP
Mortgage leaders speaking Monday at the Mortgage Bankers Association's annual convention in Las Vegas believe that concerns about the government-sponsored enterprises losing their government guarantee may be overstated.
Mark Jones, president at Union Home Mortgage, said during a panel that it would be a very heavy lift from the Trump administration to get the GSEs out of conservatorship. “I think this may just be a nothing burger,” he said.
Jones noted that any proposal to exit conservatorship would require some form of government guarantee to stay in place. He said that a government guarantee, whether explicit or implied, is needed to give the capital markets a sense of stability and ensure mortgage rates don’t go up substantially.
Stanley Middleman, CEO of Freedom Mortgage, added during the panel that the government guarantee would keep a status quo in the market even if the GSEs had an initial public offering. “I think there will be an IPO, but I don’t think it changes much,” he said.
Mike SP
Issuance of green bonds by the government-sponsored enterprises ground to a halt during the third quarter of 2025.
Neither Fannie Mae nor Freddie Mac issued a single green mortgage-backed security. Fannie also avoided issuance in May, bringing its hiatus to four months.
There were no notices on the websites of the Federal Housing Finance Agency or the GSEs saying the program had been closed, though the Trump administration has been critical of such programs.
GSE green bonds are pools of MBS backed by mortgages on single-family properties with lower energy and water usage. Fannie’s green bond issuance started in 2020 and Freddie followed in 2021.
For more details, see the latest edition of Inside MBS & ABS.
Mike SP
Trade groups representing small and mid-sized mortgage lenders this week offered a daring proposal to address the lack of affordable housing: Allow Fannie Mae and Freddie Mac to once again purchase mortgage-backed securities.
In a joint letter addressed to Treasury Secretary Scott Bessent and Federal Housing Finance Agency Director Bill Pulte, the Community Home Lenders of America and the Independent Community Bankers of America pin the affordability crisis, at least in part, on the spreads between MBS rates and 10-year Treasuries.
As of Oct. 17, this spread was a historically wide 222 basis points, the letter says. That’s compared to a normative spread of 140-170 bps. This increase, the trade groups say, is because the buyers of last resort — the Federal Reserve and the government-sponsored enterprises — no longer purchase MBS. This has led to a structural decline in demand.
Allowing Fannie and Freddie to purchase these securities could reduce mortgage rates by 30 bps or more, the lenders say.
For more details on the trade groups’ proposal, see Friday’s issue of Inside The GSEs.
Mike SP
In a surprise announcement Wednesday
afternoon, Fannie Mae revealed that Priscilla Almodovar is no longer CEO
of the government-sponsored enterprise. She was a holdover from the Biden
administration whereas the Federal Housing Finance Agency was quick to
replace Freddie Mac’s CEO near the beginning of the Trump
administration.
The press release announcing
Almodovar’s departure from Fannie didn’t include an explanation of the
move. “Serving as President and CEO of Fannie Mae has been the privilege
of a lifetime,” she said in the release. “I will be eternally grateful to
the entire Fannie Mae family, our many partners and [FHFA] Director
[Bill] Pulte for the opportunity to lead this incredible
organization.”
Fannie Chief Operating Officer Peter
Akwaboah will take over as acting CEO while the board conducts a search
for a permanent replacement for Almodovar. Akwaboah came to the
enterprise a year and half ago after eight years at Morgan Stanley, three
of those as head of technology and operations.
In addition, Fannie announced that Brandon Hamara, a former vice president of Tri Pointe Homes, who recently resigned from the board at Freddie to join the executive team at Fannie, will serve as co-president. The other co-president at Fannie will be John Roscoe, who took over as Fannie’s head of public relations in April and previously served as chief of staff to former FHFA Director Mark Calabria.
Mike SP
The Federal Housing Finance Agency is
exploring ways to allow reductions on loan level price adjustments for
mortgages on second homes and cash-out refinances, an idea suggested by
recently appointed Fannie Mae Director Barry Habib.
Habib told IMFnews Monday morning that five out of
the eight largest loan sellers to Fannie have had conservations with the
government-sponsored enterprise about the concept.
A decision could possibly be made this
week by FHFA Director Bill Pulte, one source familiar with the matter
said.
A recent report from Keefe, Bruyette
& Woods noted, “While reducing LLPAs would reduce mortgage rates, we
think the impact is likely to be limited, mainly because LLPAs are
generally quite modest and higher LLPAs are on lower credit quality loans
that are most likely already being done at the FHA.”
The report added that any reduction in the LLPA would reduce GSE earnings.
FHFA Chief Sees GSE IPO as a Sure Thing. As For When...
Federal Housing Finance Agency Director Bill Pulte recently noted that, while President Trump made the right decision not to take Fannie Mae and Freddie Mac public during his first term, he “is opportunistically evaluating an offering this time around, which could be as early as the end of 2025.”
On his X account, Pulte urged investors to review the GSEs’ Securities and Exchange Commission filings to better understand the risks involved. For his part, Trump made a commercial for the GSEs.
Another development that could accelerate the process was the confirmation earlier this month of Jonathan McKernan as undersecretary for domestic finance at the Department of Treasury. The nomination of McKernan, who served as senior counsel of FHFA under former Director Mark Calabria, was widely supported by mortgage industry participants.
In his new position, McKernan is expected to play a leading role in whatever happens to the GSEs under the Trump administration.
For more details, see Inside The GSEs, now available online.
Mike SP
The specified-pool share of mortgage-backed securities from the government-sponsored enterprises increased during the third quarter of 2025, according to a new analysis by Inside MBS & ABS.
Specified-pool issuance rose 13.7% from the second quarter to $87.57 billion in the third. And the spec-pool share of new issuance edged up from 44.9% to 47.3% in the third quarter.
The growth came from a 21.5% gain at Freddie Mac, while Fannie Mae reported a 5.0% increase.
Florida pools remained the most common story, with a 9.3% share of spec pools, although issuance was down 2.7% from the previous period. Texas pools fell 18.2%.
For more details, see Inside MBS & ABS.
Mike SP
Fannie Mae reported net income of $3.86 billion for the third quarter of 2025, a 16% sequential improvement, though down from $4.04 billion in the same period last year. Net worth at the enterprise grew to $105.5 billion as of the end of September.
Almost all of those third-quarter gains were below the line. Fannie reported a $338 million provision for losses for the July-through-September period. That’s compared to a $946 million provision in the prior quarter.
That $608 million decline was boosted by a $198 million reduction in non-interest expenses, mostly due to debt extinguishment and lower foreclosed property expenses. Those below-the-line improvements were offset by a $191 million decline in fair value gains in the third quarter.
Meanwhile, net revenues rose by $66 million from the second quarter, though they fell by $34 million year over year.
Fannie calculated a third-quarter illustrative return on average required CET1 of 10.3% versus 9.9% in the second quarter.
Mike SP
A Legend rejoins Fannie
David Benson is rejoining Fannie Mae as a senior advisor.
Benson was president of the government-sponsored enterprise
from August 2018 until his retirement in May
2024.
Federal Housing Finance Agency Director Bill Pulte announced the move, calling Benson a “legend.”
Mike SP
Freddie Mac reported $2.77 billion of income for the third quarter of 2025, up 16.2% from the second quarter. The improvement was largely tied to changes in provisions for credit losses...
Mike SP
The volume of mortgages eligible for
sale to the government-sponsored enterprises flowing into prime
non-agency mortgage-backed securities was up 26.4% from the second to the
third quarter, according to a new ranking and analysis by Inside Nonconforming Markets.
Overall, $10.70 billion of prime
non-agency MBS was issued during the third quarter, down 3.1% from the
second quarter. Jumbo volume made up the bulk of loans in prime
non-agency MBS issued in the third quarter, with $7.34 billion flowing
into deals during the period. Still, jumbos flowing into prime non-agency
MBS were down 7.8% from the second to the third quarter.
Pennymac was the top issuer of prime non-agency MBS in the third quarter, contributing $2.34 billion of loans to new issuance. It increased issuance by 28.0% from the second quarter to the third quarter.
JPMorgan Chase ranked second with $1.99
billion in loans flowing into prime non-agency MBS during the third
quarter, down 0.5%. United Wholesale Mortgage’s prime non-agency MBS
contribution rose 52.0% on a sequential basis to $1.99 billion,
essentially matching Chase. Many of UWM’s loans flow into MBS issued by Chase.
For more details, see the new issue of Inside Nonconforming Markets.
Mike SP
GSE Portfolios Increase to Level Last Seen in 2021
The government-sponsored enterprises’ combined holdings rose from $181.36 billion in the second quarter of 2025 to $215.20 billion in the third, the highest they’ve been since the end of 2021 at the tail-end of the pandemic refinance boom, according to a new analysis by Inside MBS & ABS.
Holdings of both mortgage-backed securities and mortgages increased during the third quarter.
MBS holdings rose 26.5% during the quarter to $73.50 billion at the end of September, also the highest level since the end of 2021. The whole-loan portfolios increased a more modest 15.0% to $141.70 billion.
In the third quarter, Freddie Mac increased its holdings of whole loans by 23.1% to $84.63 billion. Its MBS holdings, on the other hand, rose just 14.3% to $31.80 billion. The balance of those increases flipped at Fannie Mae, where whole loans rose just 4.7% to $57.07 billion while MBS holding spiked 37.7% to $41.71 billion. - For more details, see Inside MBS & ABS.
FHFA Considers Reducing LLPAs for Certain GSE
Mortgages
The Federal Housing Finance Agency is looking at ways to lower loan level price adjustments at the government-sponsored enterprises for mortgages on second homes and cash-out refinances.
The concept of reducing Fannie Mae/Freddie Mac LLPAs is being pushed by Barry Habib, a principal in MBS Highway, who was named to Fannie’s board this summer.
Habib told Inside Mortgage Finance that five of the eight largest sellers of mortgages to Fannie have had conversations with the GSE about the concept.
A report from Keefe, Bruyette & Woods last week noted, “LLPAs are generally modest, but can be meaningfully higher for certain loan types and for weaker credit quality borrowers.” - For more details, see Inside Mortgage Finance.
Mike SP
GSE Changes To Please LLenders.
GSEs Add Options to Selling Guides
Fannie Mae and Freddie Mac announced several changes to their selling guides Wednesday that should please lenders.
A Fannie update provides lenders with relief from representation and warranties related to borrowers’ undisclosed non-mortgage debt. This guidance applies to certain loans underwritten through Desktop Underwriter.
Under the updated guidance, when a final DU submission gets an “approve/eligible” recommendation, DU will alert the lender that the loan qualifies for enforcement of rep-and-warrant relief. That means Fannie will not seek to enforce those reps and warrants for any debts incurred on or prior to closing.
Lenders must still meet all post-closing quality control requirements to verify the accuracy of the information used to support underwriting.
To support its duty-to-serve requirements and affordable housing mission, Freddie announced that, for mortgages secured by manufactured homes, the property may include an accessory dwelling unit. However, that only applies if the primary dwelling is a multiwide.
For more details on the GSEs' guide updates, see Inside The GSEs later this week.
Mike SP
Some $22.84 billion in
refinance-mortgage volume was delivered to the government-sponsored
enterprises in October, according to a new Inside The GSEs analysis. That’s an
increase from $13.43 billion in September and the highest monthly refi
volume for the GSEs since June 2022. Overall, lenders delivered $72.13
billion in loans to Fannie Mae and Freddie Mac in October. That’s a 14.5%
increase from September and it helped to push volume up 6.1% year to
date. Many of those October refis appear to
have been borrowers of above-average credit. The average FICO score for
GSE refis spiked to 746.89 in October from 739.04 in September, a
7.85-point uptick. The other positive sign was a modest
decline in the average debt-to-income ratio for refis. Those DTIs slipped
to 36.24% in October from 36.78% in September. That was the third
straight month of improvement.
For more details, see the new issue of Inside The GSEs.
Trump, Pulte Tout 50-Year Mortgages From GSEs
The government-sponsored enterprises are working on offering mortgages with 50-year terms, according to Bill Pulte, director of the Federal Housing Finance Agency. The announcement was made over the weekend on social media following a post by President Trump.
“Thanks to President Trump, we are indeed working on the 50-year mortgage — a complete game changer,” Pulte wrote.
The initiative is out of the blue, with no public requests from industry trade groups or consumer advocates.
Currently, mortgages with 40-year terms are available in the non-agency market but are rarely used. About $2.0 billion of mortgages with 40-year terms were originated in 2024, according to an Inside Mortgage Finance analysis of data from the Home Mortgage Disclosure Act. That’s well below 1.0% of total originations last year.
Mike SP
Production and sales revenue helped drive a 9.6% increase in mortgage-banking income during the third quarter of 2025 at a select group of banks, according to a new analysis by Inside Mortgage Trends.
A group of 25 publicly traded banks generated a combined $1.39 billion in mortgage-banking earnings for the third quarter. Thirteen companies saw mortgage-banking income go up, while a dozen mostly smaller institutions reported declines.
The 14 banks that provide details on their mortgage-banking operations reported $52.04 billion in new originations during the third quarter, up slightly from $51.56 billion in the previous period. Meanwhile, these companies reported a combined $513.0 million in production-related income for the third quarter, up 20.8%.
JPMorgan Chase reported $372 million in mortgage fees and related income, a 7.2% gain from the second quarter. Most of the improvement came from production, which rose 14.6% to $173 million in the third quarter. Servicing saw a modest increase, largely stemming from better hedging results on mortgage servicing rights.
For more details, see Inside Mortgage Trends.
Pennymac Mixing GSE-Eligible Mortgages and Jumbos in MBS
Pennymac is increasing the share of mortgages eligible for sale to the government-sponsored enterprises mingling with jumbo loans in non-agency mortgage-backed security issuance.
The nonbank is marketing a $341.2 million non-agency MBS where 41.0% of the dollar volume of the MBS is mortgages eligible for sale to the GSEs, with jumbos accounting for the rest.
In similar deals issued by Pennymac in August and October, the GSE-eligible share of the MBS was around 30%.
Pennymac also issued a $291.7 million non-agency MBS in October just focused on GSE-eligible mortgages for primary residences.
Also:
Bill Pulte,
director of the Federal
Housing Finance Agency, announced Monday that FHFA is close to
approving FICO Score 10T for use in mortgage deliveries to the government-sponsored
enterprises. “This would be great for consumers and the safety of the mortgage
market, to have both FICO 10T Score and Vantage Score 4.0,” he wrote on X...
Click Titles Below to Follow
Mike SP
While the Trump administration continues to work toward a public offering involving the government-sponsored enterprises, many industry participants remain skeptical about the administration’s ability to successfully complete a public offering.
Speaking last month at the ABS East conference produced by FT Live in Miami Beach, Kevin Jackson, head of strategy for the structured products trading desk at Wells Fargo, noted that the business model for the GSEs hasn’t been fully laid out.
For example, pre-conservatorship, the bulk of the GSEs’ profits came from their retained portfolios, but it’s unclear what future plans for those portfolios are. Jackson pointed out that, if the GSEs continue the long-term path of reducing the size of those portfolios, that’s not attractive for potential investors in a capital raise by the GSEs.
“As an investor,” he said, “I don’t know if I want to own a guarantee fee business.”
On the other hand, Jackson noted that any effort to make the GSEs attractive to investors could run counter to the administration’s goal of reducing interest rates on mortgages. In order to improve profits and secure a better capital position, for example, the GSEs would probably have to increase guarantee fees. But that would raise the effective interest rate on GSE mortgages.
For more details, see Inside Mortgage Finance.
Mike SP
Mortgage Stakeholders Split on Housing Goals
Mortgage industry stakeholders have mixed views when it comes to the Federal Housing Finance Agency’s reproposed housing goals for Fannie Mae and Freddie Mac. Lenders, in general, support the changes; affordable housing advocates are aghast.
The proposal significantly lowers two key benchmarks from the 2025-2027 housing goals, dropping the low-income home purchase goal from 25.0% to 21.0% and the very-low-income purchase goal from 6.0% to 3.5%. The proposal also combines two sub-goals — one for low-income census tract home purchases and another for minority census tract purchases — into a single low-income areas purchase subgoal of 16%.
FHFA argued that, given current high interest rates and supply constraints, the existing goals were too high and distorted markets. The new goals also reflect skepticism about the ability to forecast future market behavior.
By setting these targets at the lower end of the forecast range, the agency expects to more appropriately balance two enterprise goals: support for affordable lending while still encouraging other secondary market participants to provide liquidity to the sector.
For more details, see the latest edition of Inside The GSEs.
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U.S. foreclosure activity increased year-over-year for the eighth straight month, according to ATTOM's October 2025 U.S. Foreclosure Market Report. Rob Barber, CEO at ATTOM, said foreclosure starts rose nearly 20%, while completed foreclosures were up 32% from last year...
Fitch Ratings announced Wednesday that it expects annual home price growth to be flat in 2026. Home price growth is projected to slow from 1.5% in 2025 and 4% in 2024, amid low affordability and regional supply gluts...
Mortgage applications increased 0.6% from one week earlier, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey for the week ending Nov. 7. Joel Kan, vice president and deputy chief economist at MBA, said purchase applications picked up almost 6% percent over the week to the "strongest pace since September..."
Redfin reported Thursday that U.S. pending home sales fell 0.3% from a year earlier during the four weeks ending Nov. 9, a first, but small, decline in four months. The real estate brokerage said homes that are selling are staying on the market longer, taking an average of 49 days to go under contract.
More Than Half of Wells’ Originations Are Jumbos
Wells Fargo made $7.54 billion of jumbo loans through the first six months of 2025, for a 5.9% share of that market. That represented more than half (63.7%) of Wells’ business over that time period. Learn more about Wells and the other 24 top lenders with IMF’s Top 25 Lender Profiles. On one data-filled page per lender, you’ll have specifics on volume and share by product, servicing performance, channel breakdown, secondary market choices and more. Available by the set or individually, for a specific quarter or as a four-quarter subscription.
Mike SP
Investors Taking Advantage of Slower Purchase Market
The investor share of home purchases rose from 29% in June 2025 to 30% in September 2025, according to a recent report by Cotality, a data analytics provider.
Cotality said that the recent increase builds on the elevated market share controlled by investors since late 2024 and represents a year-over-year increase of three percentage points.
Thom Malone, principal economist at Cotality, said in the report that investors are waiting until a home has been sitting on the market for a longer period so they can negotiate a lower price. “As sellers find it harder to sell at the price they want, inventory is accumulating and investors are taking advantage of the opportunity for discounts,” he said.
Cotality expects the investor share of purchases to rise until January, potentially surpassing the previous record of 32% in January of this year. Still, the company is uncertain how investors will react if buyers seeking owner-occupied properties jump back into the market later in 2026 after an expected decline in interest rates.
Mike SP
Refis Soar at UWM & Rocket
Refis Soar at UWM, Rocket With Help From Technology
United Wholesale Mortgage and Rocket Mortgage quickly produced refinances in mid-September as interest rates were declining. Leaders at the nonbanks attributed the influx in volume to investments in technology, including artificial intelligence.
“We’ve been prepared for a [rate-driven refi] rally for years,” Mat Ishbia, CEO and president of UWM, said during the nonbank’s earnings call. “The third quarter gave us a little bit of a glimpse of what it would look like, and we delivered on everything we said we would.”
He noted that UWM locked $4.8 billion of volume in one day in September, a record for the lender, and quickly processed the volume into closed loans.
“That was only a 3-, 4-, 5-day window of opportunity, and we took advantage of it by handling all the volume all the way through the organization, from setup to submission to underwriting to closing to client service priorities and it all went pretty close to flawless,” Ishbia said.
For more details, see Inside Mortgage Finance.
Mike SP
California
regulator cites two mortgage lenders for overcharging borrowers
For the second time this year, the California Department of Financial Protection and Innovation finalized a consent order against a mortgage company accused of overcharging borrowers.
Title above is link to full story - Click Title for full story
Mike SP
Bill Ackman, CEO of Pershing Square Capital Management, pitched a new plan Tuesday to reprivatize Fannie Mae and Freddie Mac. Pershing Square is one of the largest private-sector shareholders in the two government-sponsored enterprises.
Ackman proposed a timeline that would allow the Trump administration to claim some short-term victories while working toward a larger capital raise.
He argued that attempting to sell a large volume of GSE shares while Fannie and Freddie are still in conservatorship won’t attract sufficient attention from investors. That’s partly because those investors are still acutely aware of how the enterprises were treated in both the 2008 federal bailout and the 2012 net worth sweep.
Still, Ackman called for some major changes involving the federal government’s senior preferred shares in the companies, including the roughly $1.0 billion liquidation preference. And he said the highly conservative enterprise regulatory capital framework must be revised for Fannie and Freddie to offer a healthy enough return on equity to attract investors without raising guarantee fees.
For more details, see Inside Mortgage Finance later this week.
Mike SP
Credit-risk transfer activities at the government-sponsored enterprises dropped sharply in the third quarter of 2025. Combined issuance of CRT notes declined from $2.15 billion in the second quarter to $1.25 billion in the third, according to an analysis by Inside MBS & ABS.
Fannie Mae issued $635.2 million in Connecticut Avenue Securities for the third quarter, down 60.8% from the prior period. Year-to-date CRT issuance from Fannie came to $3.74 billion, down 17.3% from $4.52 billion in the first three quarters of 2024.
Fannie also didn’t execute any Credit Insurance Risk Transfer deals in the third quarter.
Freddie Mac’s third-quarter issuance of Structured Agency Credit Risk notes increased by 15.4% to $610.4 million. Year-to-date volume at Freddie was down 22.5%, dropping from $3.14 billion in the January-through-September period of 2024 to $2.43 billion for the first nine months of this year.
For more details, see Inside MBS & ABS.
Mike SP
Ackman Hoping for GSE ‘Christmas Present’ From Trump Admin
Bill Ackman, CEO and portfolio manager of Pershing Square Holdings, elaborated Thursday on the new plan he offered this week involving the government-sponsored enterprises.
Pershing Square is one of the largest private-sector holders of stock in Fannie Mae and Freddie Mac. Speaking during Pershing Square’s earnings call, Ackman noted that he had already made the revised GSE reform pitch to leaders in the Trump administration, and his public presentation Tuesday was a “trial balloon” to help determine how much support there is for the proposal.
Near-term steps in the proposal include stopping payments from the GSEs to the federal government for the government’s senior preferred shares in the companies and exercising the government’s warrants for 79.9% of the permanent common stock in the companies. And then re-listing stock in Fannie and Freddie on the New York Stock Exchange.
Ackman suggested that the effort could move quickly.
“The president’s got a lot on his plate,” he said of President Trump. “We’re approaching Thanksgiving, but it’s actually theoretically possible. We’ve spoken to the [NYSE] about a relisting. They’re obviously prepared to do whatever is required to get that done. It could be a nice Christmas present for the long-suffering shareholders of Fannie and Freddie.”
Mike SP
Report on Collateral Pledged to Federal Home Loan Banks -
November 2025
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Mike SP
Industry analysts are seriously considering the plan recently offered by Bill Ackman, CEO of Pershing Square Capital Management, to reform the government-sponsored enterprises.
Keefe, Bruyette & Woods analyst Bose George is fairly optimistic about Ackman’s new plan. The key is whether the Treasury Department is willing to give up not just the $193.4 billion combined value of its senior preferreds, but also the $367.2 billion liquidation preference that goes with it.
“We believe that if Treasury decides it wants to forgive the [senior preferred shares], then this plan appears reasonable,” George said.
However, TD Cowen analyst Jaret Seiberg pointed out that there are also political calculations to consider with the effort. “To us,” Seiberg wrote, “the president is unlikely to decide before the midterms to limit election risk.”
For more details, see the new issue of Inside MBS & ABS.
Mike SP
Planned revisions to a proposal on
Basel III capital requirements could include changes involving mortgages,
according to Michelle Bowman, vice chair for supervision at the Federal
Reserve. Bowman discussed federal banking
regulators’ plans for a re-proposal of Basel III capital requirements
Tuesday at a hearing by the House Financial Services Committee.
“The capital treatment of mortgages and
mortgage servicing assets under the U.S. standardized approach has
resulted in banks reducing their participation in this important lending
activity, potentially curtailing access to mortgage credit,” she said.
“We are considering approaches to more granularly differentiate the
riskiness of mortgages with benefits extending to financial institutions
of all sizes, not just the largest banks.”
The Mortgage Bankers Association recently met with bank regulators regarding the pending re-proposal of Basel III capital requirements. The trade group said the re-proposal could be issued as soon as this month.
Large MSR Owners Considering Sales in Early 2026
At least two top-20-ranked owners of mortgage servicing rights look set to sell their portfolios early in the new year, according to investment bankers familiar with the situation.
One investment official, requesting anonymity, declined to provide details but insisted that these two companies were exiting the business. “They’re entirely going away,” he said.
One of the biggest problems facing the industry, the investment official noted, is that originations aren’t growing very much thanks to conventional rates presently being in the range of 6.25% to 6.5%.
Mark Garland, a managing director at SitusAMC in Denver, declined to discuss specific M&A transactions but noted what would really change the servicing sales market would be conventional mortgage rates falling to 5.75%.
For more details, see Inside Mortgage Finance.
FHFA’s Fair-Lending Policy for GSEs Unclear, GAO
Claims
The Federal Housing Finance Agency hasn’t established clear policies regarding fair lending activities at the government-sponsored enterprises, according to a new report from the Government Accountability Office.
The GAO noted that earlier this year under FHFA Director Bill Pulte, FHFA made changes to its fair lending oversight program, including changing its examination approach, waiving components of its fair lending rule and rescinding related guidance.
“Although the enterprises remain subject to fair lending and other consumer protection laws, FHFA has not communicated its revised compliance requirements or supervisory expectations,” the GAO said.
The GAO recommended that FHFA clarify its expectations for how the GSEs should comply with fair lending requirements. Christopher Bosland, deputy director of the division of enterprise regulation at FHFA, responded, saying FHFA believes no further action is required to address the GAO’s recommendation. He said FHFA maintains that the GSEs are responsible for complying with all applicable statutory requirements and FHFA will continue to assess relevant risks at the GSEs.
Mike SP
Republicans in the House plan to reduce regulations to help address housing affordability.
Rep. French Hill, R-AR, chair of the House Financial Services Committee, opened a hearing Wednesday detailing causes that he thinks have contributed to the limited availability of affordable housing. Inflation, rising costs, interest rates and insurance premiums, and “overburdensome building regulations” have together led to the current shortage, he said.
Rep. Sean Casten, D-IL, criticized the calls for flat deregulation.
“I hope all my colleagues will go home tonight and reread The Three Little Pigs,” he said. “It’s true, you build a house out of straw it’s cheaper than building a house out of brick, but there are big bad wolves out there we’ve got to protect against.”
For more details, see Inside Mortgage Finance later today.