Tag Archives: Fannie Mae

Fannie Mae expects overall economic growth to decline, taking the housing market with it on its downward trend. The company bases these predictions on declining business and consumer confidence in addition to weak job growth. The GSE said in the August edition of its regular economic and mortgage market analysis report that ""recovery has clearly lost momentum."" Macro economic factors are driving the mindset of consumers, according to Fannie Mae, and housing is being impacted.

Fannie Mae and Freddie Mac have both suspended PMI Mortgage Insurance and its affiliates PMI Insurance Co. and PMI Mortgage Assurance Co. as approved mortgage insurers. Mortgages insured by any of the three PMI units with note dates before May 19, 2011, or after September 16, 2011, will no longer be purchased or securitized by either of the GSEs. To allow lenders and sellers to clear their pipelines, PMI-insured mortgages with note dates that fall in between that time will continue to still be accepted by the mortgage financiers.

The Arizona Department of Insurance has placed two subsidiaries of PMI Group, Inc. -- PMI Mortgage Insurance Co. (MIC) and PMI Insurance Co. (PIC) -- under the department's supervision and ordered them to cease issuing new mortgage insurance. PMI alerted investors of the possibility of such actions earlier this month. PMI says further measures by the regulator could result in up to $735 million of the parent company's outstanding debt coming due, obligations which the PMI Group would be unable to pay.

Fitch Ratings has affirmed the long-term Issuer Default Ratings (IDRs) of Fannie Mae and Freddie Mac at 'AAA', citing the federal government's implicit guarantee that the mortgage giants will remain solvent and its explicit outlays of monetary support as key for the agency's decision. Fitch says the rating outlook for the two GSEs remains ""stable.""

While the Obama administration continues to consider options for the future of housing finance, two mainstream media outlets reported Tuesday that officials are looking into a plan that would retain major government involvement in the housing market, namely by preserving federal loan subsidies through the GSEs. The administration has issued a statement negating these reports, stressing that any government support for housing finance will be ""targeted and limited.""

The term 'underwater' has become common industry jargon in today's marketplace of depressed home values and high loan balances, and it's increasingly making its way into the everyday vocabulary of consumers. Twenty-six percent of mortgage borrowers now say they are underwater, according to a new survey conducted by Fannie Mae. The GSE also found that the idea of being in negative equity is more prevalent among minorities, and that underwater borrowers are more likely to know someone who has defaulted on their mortgage.

Fannie Mae and Freddie Mac have suspended Republic Mortgage Insurance Company (RMIC) and Republic Mortgage Insurance Company of North Carolina as approved mortgage insurers. According to North Carolina law, mortgage insurers must maintain at least one twenty-fifth of their aggregate insured risk outstanding. RMIC fell below this amount in September 2010 but was granted waivers from the North Carolina Department of Insurance. A recent extension of the waiver is set to expire August 31.

Bank of America has sold the servicing rights of 400,000 home loans to Fannie Mae, according to media reports. The unpaid principal balance on the loans is said to be $73 billion. The loans were sold at a price of $500 million. BofA's CEO Brian Moynihan referenced a sale of mortgage servicing rights in a CNBC interview this week, but did not name the purchaser. A BofA spokesperson told DS News the sale is consistent with steps the company is taking to address legacy mortgage issues and position for growth.

The Obama administration is setting the stage for a public-private collaboration to tackle the growing inventory of REO homes. On Wednesday, federal officials called on private investors and industry stakeholders to share their recommendations on how best to dispose of foreclosed homes held by Fannie Mae, Freddie Mac, and FHA. Together, the three hold nearly 250,000 REO homes. Federal officials believe the most effective tactic is to sell off pools of properties to responsible investors who will employ an REO-to-rental strategy.

Arizona State Credit Union is now offering Fannie Mae HomePath loans, making it one of only a handful of credit unions in the nation approved for the mortgage program. HomePath is the GSE's venture for marketing and selling its REO properties, providing special financing terms for the purchase of select Fannie Mae-owned properties. Arizona State Credit Union says its participation in the program is expected to help reduce the inventory of foreclosed homes on the market in Arizona.