Jeb Hensarling tells bankers ending Fannie and Freddie is still the best path forward

Texas Republican Rep. Jeb Hensarling told a conference of mortgage bankers Wednesday his 2013 bill that would have ended Fannie Mae and Freddie Mac still remains the best path forward for reform of the housing finance market.

Appearing at a meeting of the Mortgage Bankers Association Wednesday morning in downtown Washington, the conservative chairman of the House Financial Services Committee said the legislation “still represents the best vehicle for reform.”

The bill cleared the committee with Republican votes in 2013, but failed to advance in the House thanks to finance industry skepticism.

Notably, it would have dissolved the bailed-out mortgage giants Fannie Mae and Freddie Mac. In their stead, it would have created a privately-run utility to facilitate the creation of mortgage-backed securities and support a secondary market for home loans.

The bill would have removed government backing for mortgage-backed utilities, though. At the time, many industry groups, including the Mortgage Bankers Association, argued eliminating the government backstop for mortgage-backed securities would make 30-year fixed-rate loans unavailable.

Hensarling on Wednesday called it a “fable” that his legislation would have ended the 30-year fixed-rate mortgage.

The lawmaker has been meeting with Senate Banking Committee Chairman Mike Crapo of Idaho and Treasury Secretary Steven Mnuchin to discuss housing finance reform. All parties have said they aim to address the status of Fannie and Freddie later this year or early next.

“I’m confident this is the Congress where we will finally achieve that goal,” Hensarling said Wednesday.

He also said that he was reviewing outside proposals for overhauling the system of housing finance, including the one published by the Mortgage Bankers Association earlier this year.

Fannie Mae-Freddie Mac Plan Worries Bond Investors

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PHH finalizes sale of Freddie Mac mortgage servicing rights portfolio to New Residential

At the end of last year, PHH announced that it planned to sell off its entire mortgage servicing rights portfolio in a massive deal with New Residential Investment.

Now, that process is moving closer to being complete, as PHH disclosed Monday that it recently completed the sale of “substantially all” of its Freddie Mac MSR portfolio to New Residential.

PHH made the disclosure in filing with the Securities and Exchange Commission.

In the filing, PHH said that the closing of this sale constituted the initial sale of MSRs under its agreement with New Residential. 

When PHH initially announced the deal in December, it said it planned to sell the servicing rights on 480,000 mortgages with a total unpaid principal balance of $72 billion to New Residential.

Based on the “MSR portfolio composition” and market conditions, PHH said that it expects the proceeds of the deal to be approximately $912 million.

Of that $912 million, approximately $612 million is from the sale of the MSRs themselves and approximately $300 million is related to the sale of servicing advances.

In this deal, PHH said that it sold the servicing rights on approximately 81,500 mortgages to New Residential.

Additionally, the SEC filing states the following:

The Company sold the Freddie Mac MSR Portfolio, together with all servicing advances related to the Freddie Mac MSR Portfolio, for total proceeds of approximately $110 million, of which approximately $101.5 million was attributable to the purchase price for the Freddie Mac MSR Portfolio and approximately $8.5 million was attributable to the related servicing advances.

As part of the deal, PHH will be subservicing the MSRs for New Residential for an initial period of three years.  The SEC filing also states that in order to facilitate New Residential’s financing of servicing advances as part of the subservicer agreement, New Residential will reimburse PHH on a weekly basis for any servicing advances that PHH makes.

PHH also notes that the closing of the Fannie Mae portion of the MSR sale is expected to take place in the third quarter.

Economy Watch: China Named Top Buyer, Seller of US CRE – Multi

China was the top country for both buying and selling U.S. commercial real estate in 2016, with Florida as the top destination for all international clients, followed by Texas, according to the 2017 Commercial Real Estate International Business Trends survey, which was released recently by the National Association of Realtors.

One-fifth of surveyed realtors practicing in commercial real estate closed a sale with an international client in 2016, the survey found. Moreover, as foreign investors flock to smaller-sized commercial properties in secondary and tertiary markets, realtors also expressed confidence that there will be increased sales and leasing activity involving foreign investors this year compared with last.

Nearly two-thirds of commercial foreign buyer and seller clients in 2016 were non-resident foreigners. The top countries of origin for buyers were China (17 percent), Mexico (14 percent) and the U.K. and Venezuela (both at 7 percent). Sellers were typically from China (17 percent) or Brazil, Canada, France and Mexico (all at 10 percent).

Of the 69 percent of realtors who said they completed a CRE transaction last year, 20 percent reported closing a deal for an international client. Realtors completed a median of one buyer-side international deal and two seller-side international transactions, with a median buyer-side sales price of $1 million, and a median seller-side price of $550,000.

Also, 22 percent of realtors said they completed a lease agreement on behalf of a foreign client. The median gross lease value for international lease transactions was $105,000, with most space typically under 2,500 square feet.

NAR 2017-commercial-international-infographic

Realtors® Highlight Flood Insurance Concerns as House Committee Finalizes Key Markup

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Divide widens between housing haves and have-nots

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May existing home sales up 1.1%


The median price of an existing home sold in May set a record high, but it’s not the price itself that is so stunning.

It’s the math behind that price that indicates how difficult it has become for the average American to become a homeowner. It also explains why the national homeownership rate remains stuck near its historic low.

The National Association of Realtors reported the median price of an existing home is $252,800, a 5.8 percent increase from the price reported in May 2016. The key here is that the calculation is done using a median figure. That means half the homes sold in May were priced higher, and half were priced lower. Other measures of home prices use so-called repeat sales figures, meaning they are looking at the year-to-year gains that the same or similar houses would see.

Using a median gives us a better look at not just the price, but what price points are selling — and that is key. If more expensive homes are selling, that skews the median higher, and that is now the case.

Sales of existing homes priced below $100,000 dropped 7 percent year over year, and sales of homes priced between $100,000 and $250,000 rose just 2 percent, according to the NAR. On the other side, sales of homes priced over $500,000 jumped more than 20 percent and sales of million-dollar homes surged nearly 30 percent.

The issue is both a wealth gap and a supply crunch.

“There is a housing shortage everywhere and a housing crisis in some markets,” said Lawrence Yun, chief economist for the NAR.

There are very few low-priced homes for sale, and far more expensive homes for sale. Homebuilders may claim they are increasingly targeting that first-time buyer, but their price points even for entry-level homes are still mostly above $200,000. Investors, who often have the advantage of all-cash offers, bought and continue to buy lower-priced and distressed homes, taking advantage of high demand for single-family rentals. It is difficult for first-time, mortgage-dependent buyers to compete.

“Because of the run-up in home prices, it’s making it more difficult for renters to convert into home ownership,” said Yun. “We are essentially stuck at a 50-year low in the homeownership rate.”

This is occurring at a time when overall housing equity has doubled, roughly, from $6 trillion to over $13 trillion in the past five years.

“Yet the renters are not participating in this wealth, so there is a greater divide between owners and nonowners,” said Yun.

There is most definitely high demand for homes, as younger Americans age into the traditional ownership years. There was even a slight uptick in the number of owned household formed in the first part of this year, compared to rental households formed, according to the U.S. Census. Still, there would be far more sales if homes were more affordable.

“It’s no exaggeration to say that current buying conditions in many markets are terrible, with sellers in complete control and buyers forced to contend with cutthroat competition and intense pressure to make a deal,” said Svenja Gudell, chief economist at Zillow.



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Fannie Mae announces winners of latest non-performing loan sale

Fannie Mae announced the winners of its seventh and eighth Community Impact Pools for non-performing loan sales. The transaction of $31.9 million in unpaid principal balance will close later this summer, and will be required to follow the FHFA’s guidelines which encourage sustainable modifications.

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Jeb Hensarling tells bankers ending Fannie and Freddie is still the …

Texas Republican Rep. Jeb Hensarling told a conference of mortgage bankers Wednesday his 2013 bill that would have ended Fannie Mae and Freddie Mac still remains the best path forward for reform of the housing finance market.

Appearing at a meeting of the Mortgage Bankers Association Wednesday morning in downtown Washington, the conservative chairman of the House Financial Services Committee said the legislation “still represents the best vehicle for reform.”

The bill cleared the committee with Republican votes in 2013, but failed to advance in the House thanks to finance industry skepticism.

Notably, it would have dissolved the bailed-out mortgage giants Fannie Mae and Freddie Mac. In their stead, it would have created a privately-run utility to facilitate the creation of mortgage-backed securities and support a secondary market for home loans.

The bill would have removed government backing for mortgage-backed utilities, though. At the time, many industry groups, including the Mortgage Bankers Association, argued eliminating the government backstop for mortgage-backed securities would make 30-year fixed-rate loans unavailable.

Hensarling on Wednesday called it a “fable” that his legislation would have ended the 30-year fixed-rate mortgage.

The lawmaker has been meeting with Senate Banking Committee Chairman Mike Crapo of Idaho and Treasury Secretary Steven Mnuchin to discuss housing finance reform. All parties have said they aim to address the status of Fannie and Freddie later this year or early next.

“I’m confident this is the Congress where we will finally achieve that goal,” Hensarling said Wednesday.

He also said that he was reviewing outside proposals for overhauling the system of housing finance, including the one published by the Mortgage Bankers Association earlier this year.

Fannie Mae Announces Winner of Seventh and Eighth Community …

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Visionet Systems integrates with Freddie Mac’s Loan Closing Dataset

Visionnet Systems, a provider of technology solutions and business process outsourcing services for the mortgage industry, became a verified technology integration vendor for Freddie Mac.

The tech provider’s solution was tested to ensure that its interface was developed in accordance with Freddie Mac’s requirements for its Uniform Closing Dataset.

Fannie Mae and Freddie Mac will soon require mortgage lenders to deliver a common collection of data digitally. This new dataset will be required starting Sept. 25, 2017 as part of the Uniform Mortgage Data Program, an industry-wide drive to build a better housing finance system in the U.S.

Visionnet Systems’ solution will simplify the closing process by automatically generating the UCD from existing loan documents supplied by lenders.

It will address many common challenges that arise during UCD preparation, such as embedding a closing disclosure image within the system. It also handles the GSE-required merging of buyer and seller UCDs before the delivery, caters to different closing disclosure and addendum formats and addresses inconsistent terminologies between the closing disclosure and MISMO.

It also offers creation, validation and delivery of the UCD that is compliant with the Consumer Financial Protection Bureau closing disclosure, and is an early solution that is prepared to deliver seller’s disclosures ahead of the 2017 mandate.

“Our CD2UCD solution facilitates UCD compliance when a lender’s legacy loan origination system can’t perform this task, or where a correspondent lender lacks the closing disclosure data and documents are of poor quality,” Visionet Systems CEO Arshad Masood said. “As a verified technology integration vendor, our customers can rest assured that they’ll be ready to comply with the UCD mandate.”