FHFA « MBSQuoteline Blog

Below is a collection of articles, news, and announcements associated with our industry.

Posts Tagged ‘FHFA’

Special Update: More on G-Fee Increase

Tuesday, September 25th, 2012

On August 31st, FHFA announced another increase in the guarantee fee (G-fee) charged by Fannie Mae and Freddie Mac on the loans they insure. The amount of the increase is set to average 10 basis points, but the amount of the increase may vary by product and seller. The increase is to be effective on loans sold directly to Fannie or Freddie beginning in November and for any loans to be pooled in a mortgage-backed security (MBS) with a December 1st or later issue date. Longer term locks already reflect this increase. Short term locks may as well, depending who is buying the loan and whether the loan will be pooled in a MBS. If they don’t now, they will very soon. G-fees are paid by the borrower from the interest paid on the loan or are collected upfront as a cost to the borrower. The cost is approximately five times the increase in G-fee. The effect of this increase in G-fee on the borrower has been masked somewhat by recent price increases in the MBS market. Loans locked at prices before the G-fee increase was added will incur heavy extension fees, if required, so timely delivery of well documented, high quality loans is extremely beneficial.

Tags: FHFA, FHLMC, FNMA, Freddie Mac, G-Fee, MBS, mortgage backed securities
Posted in In The News, Special Update | Comments Off

Special Update: G-Fee Increases – Update 12.29.11

Thursday, December 29th, 2011

FHFA has answered a couple of the questions we raised on Tuesday regarding the Congressionally mandated increase in Fannie Mae and Freddie Mac guarantee fees (G-fees). Effective April 1st all G-fees charged by Fannie and Freddie will be increased by 10 basis points. In addition, FHFA said that during the first part of 2012 they will determine whether the new law will require additional increases in the G-fees.

Since G-fees are paid from the interest on a loan, this increase will cause mortgage rates on loans going into Fannie and Freddie mortgage-backed securities after April 1st to rise by a similar amount.

Tags: Fannie, FHFA, FNMA, Freddie Mac, G-fees, Guarantee Fees, mortgage industry, mortgage loans, mortgage market, mortgage prices, mortgage rates
Posted in BlogTalkRadio Podcasts, Special Update | Comments Off

Special Update: G-Fee Increases 12.28.11

Wednesday, December 28th, 2011

On Friday, President Obama signed into law the Temporary Payroll Tax Cut Continuation Act. This Act uses increased guarantee fees on new mortgages to pay for reduced payroll taxes. The amount of the g-fee increases will be included in future mortgage rates. Below are general provisions pertaining to increasing the Guarantee Fees for Fannie, Freddie, and FHA. Several elements in the bill are not quite clear and may take weeks or months to determine. The primary questions are:

1. How much will the Fannie and Freddie g-fee rise? The Act calls for a minimum increase of 10 basis points, but the amount of the increase is to be determined by FHFA and is supposed to a)”cover the risk of loss associated with the guarantee”, and b) be based on “the cost of capital allocated to similar assets held by other fully private regulated financial institutions”. This definition could result in a wide range of fee increases. The early expectation from insiders is that the increase will be 10 basis points.

2. When will the increase become effective? The Act says the increase is to be applied to guarantees issued after enactment of this section. The date this provision is to be enacted is not clear. FHFA and the GSEs will require substantial effort to prepare for this, so it may take some time.

3. Will the increase in guarantee fees hit all at once? The Act says the FHFA may phase in the increase over a two-year period. This could make the initial effect on mortgage rates fairly small. However, the FHFA could make the increase applicable all at once.

4. How much will the FHA’s annual insurance premium increase? This is the only easy question. The answer is 10 basis points.

5. When will the FHA increase take effect? The bill allows HUD to phase it in over two years following enactment of this subsection. Again, the date of enactment is not clear and the pace at which it is phased in is as HUD deems appropriate.

Tags: Dan Alpert, FHA, FHFA, GSE, Guarantee Fees, HUD, Joe Farr, MBSQuoteline, mortgage industry, mortgage market, Payroll Tax Cut, Temporary Payroll Tax Cut Continuation Act
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Special Update: New HARP Announcements 10.24.11

Monday, October 24th, 2011

This morning, FHFA announced their enhancements to the HARP refinancing program. Operational details of the plan are to be released on November 15. Only loans that were purchased or guaranteed by Fannie Mae or Freddie Mac on or before May 31, 2009 and have a current LTV over 80% are eligible. In addition, the loan must be current, no late payments in the last six months and no more than one late in the last 12 months. There are no restrictions on who may refinance these loans. Program guidelines include:

*No limit on LTV, if new loan is a fixed rate loan (current LTV must be above 80%)

*Loans previously refinanced under HARP not allowed

*Certain agency fees will be waived if new loan is a shorter term loan

*Appraisals not required where Agency AVM is available

*Certain originator Reps and Warrants will be waived

Borrowers can determine if their loan is owned or guaranteed by Fannie or Freddie at http://www.fanniemae.com/loanlookup/ or http://www.freddiemac.com/corporate/

If you need additional information about this blog post, please visit our website MBSQuoteline.com or call 800-627-1077.

Tags: Fannie Mae, FHFA, FHLMC, FNMA, Freddie Mac, HARP, HARP refinancing, MBSQuoteline, mortgage backed securities, refinance
Posted in In The News, Special Update | Comments Off

In the News – Is HVCC working? Pt. 2: Appraiser’s Point of View

Thursday, June 3rd, 2010

So overall, lenders seem to be content with HVCC. That’s one out of four. But how about appraisers?

The popular method for lenders to comply with HVCC has been to contract with an appraisal management company (AMC) to handle the appraisal process (though some are managing the process internally). In this arrangement, the appraisal order is placed with the AMC by a non-production person in the lender’s office, the order is assigned on a random basis to one of the appraisers in a pool, and if the appraiser accepts the order, the appraisal goes forward. Sounds simple enough and workable, right? Most appraisers I’ve talked to are somewhat ambivalent on the issue. They’ve lost business from long term, cultivated, relationships but picked up business from others in the random assignment process. There’s a middleman now (remember the AMC) and middlemen have to get paid. We’ve all heard of AMCs demanding appraisers to accept a lower fee for reports to be on their panel. A common refrain is less qualified appraisers that otherwise might not be able to get business on their own, gladly step in on these terms with the result being poorer quality appraisals. So, appraisers have had to deal with that issue, but established ones seem to have figured out how to get their fair share.

Additionally, some appraisers lament the fact that when they realize a value is not going to work, the line of communication to the loan officer is broken, preventing them from discussing the issue and potentially stopping the order, saving time and money for all involved. And remember, there is still a relationship component in business, a fun part aside from just making money. And HVCC has essentially eliminated some long time relationships between loan officers and appraisers. But overall, the sense I get from appraisers is a position of neutrality with respect to HVCC. There are positives and negatives, but at the end of the day it’s a push; just different. And what’s not in the mortgage business these days?

Ah, but now it gets more interesting. Two (lenders and appraisers) seem to be okay with HVCC but how about consumers and loan officers? Stronger opinions emerge, and those we will begin to tackle next time…

Tags: AMCs, Appraisal Management Companies, Appraisal quality, Appraiser, Appraiser Independence, Attorney General, Fannie Mae, Federal Housing Finance Agency, FHFA, FHLMC, FNMA, Freddie Mac, Home Valuation Code of Conduct, HVCC, MBSQuoteline, New York, Scott Sanderson, Subprime
Posted in In The News, Uncategorized | Comments Off

In the News – Is HVCC working? The Real Answer? Well, It Depends.

Thursday, May 27th, 2010

The industry has had a year to operate within HVCC guidelines and the benefits of it pretty clearly depend on just whom you ask.

May 1, 2009 marked the implementation of another regulation on the mortgage industry when Fannie Mae and Freddie Mac adopted the Home Valuation Code of Conduct (HVCC) as a result of an agreement between their regulator, the Federal Housing Finance Agency (FHFA), and the New York State Attorney General. One of many initiatives aimed at improving loan quality in the wake of the subprime market meltdown (and we’re finding quality problems weren’t limited to the subprime market) HVCC’s intent was to ensure appraiser independence in the valuation process, thereby improving appraisal quality. Doing so, it was reasoned, would better serve lenders because they would get more accurate valuations on which to base their loan decisions. And borrowers as well would be protected from obligating themselves on loan amounts based on inflated property values.

So is HVCC working? Well, who are you asking? Basically you have four different players in the origination process impacted by HVCC- the lender (and we’ll include Fannie and Freddie in this category to keep it simpler), the appraiser, the originator and the borrower. Let’s take it one step at a time.

Lenders, at least publicly, seem to be content HVCC is working. Remember here the originator was the popular choice of many as the culprit responsible for a lot of the problems in the industry (that is an entirely different debate to be saved for another day). And eliminating contact between the originator and the appraiser eliminates the likelihood that the originator will influence the appraiser’s opinion of value. No matter your role in the business, I think we can all agree that is a good thing. Originators are not trained to appraise real estate. Additionally, this separation basically eliminates for lenders another front for attack from regulators on appraisal quality. There are statistics out supporting the position that appraisal quality is up, appraisal fraud is down and better loans are being made today as a result of HVCC. Arguments for the success of HVCC from lenders abound. But talk to appraisers, originators and consumers and you’ll likely get a very different view. And not surprisingly, those views won’t all be the same. So is HVCC working for them? Well, it depends. We’ll dissect their views a little bit next time.

Additional Resources:

HVCC FAQs

Tags: AMCs, Appraisal Management Companies, Appraisal quality, Appraiser Independence, Attorney General, Fannie Mae, Federal Housing Finance Agency, FHFA, FHLMC, FNMA, Freddie Mac, Home Valuation Code of Conduct, HVCC, MBSQuoteline, New York, Scott Sanderson, Subprime
Posted in In The News, Uncategorized | Comments Off