Government

In recent months, Fannie Mae and Freddie Mac took important steps toward transparency with the release of historical credit performance data. The move also paved the way for credit risk sharing transactions as the FHFA looks to reduce the GSEs' role in housing finance. In an effort to help investors ""evaluate upcoming credit-sensitive securitization proposals from the GSEs,"" Fitch Ratings completed an analysis of the historical data in a recent report. Overall, the report determined loans originated from 2009 and beyond should outperform earlier vintages.

Citigroup and Fannie Mae announced Monday an agreement to resolve future repurchase claims for breaches of representations of warranties on millions of loans originated between 2000 and 2012. According to release from Citi, the agreement covers 3.7 million residential first mortgage loans sold to Fannie Mae. As part of the agreement, Citi will pay Fannie Mae $968 million, ""substantially all of which was covered"" by the bank's existing mortgage repurchase reserves as of the end of the first quarter.

The reaction to Thursday's report on personal income and spending for May was generally positive. Personal income rose 0.5 percent from April--five times what was expected--and personal consumption expenditures (or PCE) were up 0.3 percent, matching economist forecasts.

While the current market environment is a haven for specialty servicers, Fitch Ratings suggests in time, these shops will have to rely more heavily on originations to survive. ""The decision by many banks to reduce or exit subprime and distressed mortgage servicing in part reflects regulatory risks faced by these institutions in the migration to Basel III,"" Fitch said.

Demand for rental housing is on the rise, but the federal government is reducing its role in the sector, according to a new report from Harvard University's Joint Center for Housing Studies (JCHS). Rental households now make up 35 percent of all households in the United States, according to JCHS. Researchers at the Center are concerned that as the federal government decreases its activity in the multifamily market, affordable housing may become scarce.

Mortgage performance improved in the first quarter of this year, with 90.2 percent of mortgages current and performing, the Office of the Comptroller of the Currency (OCC) reported Thursday. The share is up from 89.4 percent in the previous quarter and 88.9 percent a year ago. For the most part, delinquencies and foreclosures were down across the board, with the exception of early delinquencies and newly initiated foreclosures. Though, despite a near 14 percent quarterly increase in newly initiated foreclosures, home retention actions far outpaced new foreclosures in the first quarter.

According to Freddie Mac's Primary Mortgage Market Survey, the average 30-year fixed-rate mortgage (FRM) rose to 4.46 percent (0.8 point) for the week ending June 27, an increase from only 3.93 percent last week and the highest figure since the week of July 28, 2011. The weekly increase is the largest since April 1987. The 15-year FRM this week averaged 3.50 percent (0.8 point), up from 3.04 percent the previous week. While the massive rate hike will certainly dampen some housing activity, Nothaft noted the effect ""will be muted by the high level of buyer affordability, and home sales should remain strong.""

With a boost from the calendar, personal income rose 0.5 percent in May faster than economists had forecast while personal consumption went up 0.3 percent, as expected, the Bureau of Economic Analysis reported Thursday. Data for April was revised to show income grew $18.3 billion instead of the originally reported $5.6 billion decline. Data on spending for April was unchanged. Data for April was revised to show income grew $18.

First-time claims for unemployment insurance dropped 9,000 to 346,000 for week ended June 22, the Labor Department reported Thursday. Economists expected 345,000 claims. Claims filings for the week ended June 15 were revised up to 355,000 from the originally reported 354,000.

A past president from DocX LLC was sentenced to five years in prison for her role in a scheme involving over one million fraudulently signed and notarized mortgage-related documents, the Justice Department announced Tuesday.