Tag Archives: Freddie Mac

Home prices were 0.6 percent lower in the second quarter than in the first quarter of 2011, according to the Federal Housing Finance Agency (FHFA). The agency's index is calculated using purchase price information on homes backing mortgages that have been sold to or guaranteed by Fannie Mae and Freddie Mac. Looking at this data over the past year, home prices have fallen 5.9 percent. That's the biggest annual drop recorded by FHFA since the second quarter of 2009.

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.

Freddie Mac's REO disposition unit HomeSteps rolled out a new program this week aimed at trimming its inventory of foreclosed condominiums. HomeSteps' Condo Cash is a special limited time offer that will provide eligible condominium buyers with up to $1,500 for standard condominium association dues. Offers must be submitted between August 15 and November 15, 2011 and close escrows by December 30, 2011.

Investors' growing appetite for the safety of U.S. Treasury bonds in the wake of European debt troubles and a stagnant economic recovery here in the U.S. have driven mortgage interest rates to their lowest level in over 50 years. Freddie Mac says both fixed- and adjustable-rate mortgages have reached all-time record lows, providing further incentive for homeowners looking to refinance. By the GSE's assessment, the 30-year rate is now averaging 4.15 percent and the 15-year rate is at 3.36 percent.

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.""

Freddie Mac says it is seeing a ""material increase"" in mortgage insurer rescissions, cancellations, and denials of coverage. The GSE has issued a notice alerting lenders that they may be forced to buy back loans if Freddie Mac determines they do not have the insurance coverage required at delivery, or if the mortgage insurance coverage is no longer in force. Freddie requires a primary mortgage insurance policy as protection against default for loans with a loan-to-value ratio of more than 80 percent.

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.

Turbulent financial markets served to push mortgage interest rates to new lows this week. Despite the much-ballyhooed downgrade by S&P, investors made a run on Treasuries to send yields plummeting, and the Federal Reserve pledged to keep a key interest rate near zero for two years. Both had a profound effect on mortgage rate trajectories. Freddie Mac puts the 30-year fixed rate at 4.32 percent, a new low for 2011, with the 15-year fixed and adjustable-rate mortgages setting all-time record lows.