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Ginnie Seeks More Staff for MBS Load
American Banker (01/26/09)
Ginnie Mae has requested permission from the Obama administration to increase its 61-person staff by 30 full-time employees, as demand for its mortgage-backed securities ramps up. The company set an internal record for newly issued MBS in 2008 and in recent months has been outperforming Fannie Mae and Freddie Mac in backing new MBS. Its securities are getting a great deal of attention because they are underpinned by FHA and VA loans, both of which give borrower low downpayment options.
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Freddie May Tap Another $35 Bil
Investor's Business Daily (01/26/09) P. A2
In an effort to preserve its positive net worth following unanticipated losses in the 2008 fourth quarter, Freddie Mac could seek $35 billion more from the Treasury. The government-controlled mortgage finance company has a $100 billion preferred share purchase agreement with the agency, under which it tapped $13.8 billion late last year.
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Foreclosure Debate Shifts to Bankruptcy Court
Business First of Columbus (01/26/09) Burns, Adrian
Congressional lawmakers are wrestling with the idea of giving bankruptcy judges power to alter home loans, but many financial industry insiders warn that doing so will only create more risk in what is already an unstable mortgage market. One consequence of such legislation, says Scott Talbott of the Financial Services Roundtable, is that mortgage securities investors could demand higher rates. Another consequence is higher interest rates on home loans, reports John Mechem of the Mortgage Bankers Association. "A rate could go to 6.5 percent from 5 percent, which on a $300,000 mortgage would cost an extra $290 bucks a month," he said.
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More Buyers Turn to FHA for Help With Homes
Indianapolis Star (01/26/09)
The Federal Housing Administration insured more than 8 percent of all residential purchase loans in the year ended Sept. 30--up from less than 2 percent three years ago--and when counting refinancings, its total market share has risen to 26 percent in terms of total dollar volume. Loans insured by the FHA have become more popular with the decline of conventional lending, says Frank Donnelly, who sits on the board of governors of the Mortgage Bankers Association of Metropolitan Washington.
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Banks to Unleash Flood of REOs
Inman News (01/26/09) Carter, Matt
Mortgage lenders are likely to put their growing supply of repossessed homes up for sale in the months to come. According to the Mortgage Bankers Association, 10 percent of home loans was either delinquent or in the foreclosure process at the end of September; and Fannie Mae and Freddie Mac saw repossessions grow nearly 25 percent to 15,196 homes from the second quarter to the third quarter of 2008. Lenders may have to reduce the principal balance on loans to do more than slow down the foreclosure process for many borrowers.
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Ellington Sues Defunct Mortgage Lender Over Subprime Loans
FINalternatives.com (01/26/09)
Ellington Management Group has sued Ameriquest Mortgage Corp., saying it lied about the risks inherent in securities that Ellington reportedly lost $354 million on. According to the lawsuit, Ellington alleges that Ameriquest failed to verify borrowers' employment, ignored late payments and misstated whether the borrowers actually lived on their properties. Once ranked as one of the nation's biggest subprime mortgage lenders, Ameriquest folded in 2007.
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Fannie Laying Off Hundreds in D.C.
Fort Wayne Journal Gazette (IN) (01/26/09) Goldfarb, Zachary A.
Fannie Mae is restructuring itself to concentrate on preventing residential foreclosures--a move that is costing several hundred of its workers in the District of Columbia area their technology, administration and communications jobs. Some positions also will be cut in the mortgage giant's single-family operation, which purchases and packages loans from lenders. However, Fannie Mae also intends to hire a like number of employees in the Dallas market, which is ground zero for its anti-foreclosure arm.
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Lending Drops at Big U.S. Banks
Wall Street Journal (01/26/09) P. A1; Enrich, David
A Wall Street Journal analysis of the nation's banks has found that 10 of the 13 big beneficiaries of the Treasury Department's Troubled Asset Relief Program saw their outstanding loan balances decline by nearly $46 billion between the third and fourth quarters of 2008. Those banks have collected the bulk of the roughly $200 billion the U.S. government has disbursed since TARP was launched this past fall in an effort to stabilize financial institutions and jump-start lending to consumers and businesses.
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Residential Finance News |
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Housing Woe Worsens Despite Declining Mortgage Rates
The housing downturn deepened toward the end of 2008 along with the rest of the economy. Home building activity is suffering the worst conditions in 50 years, with December total and single-family starts dropping below November's record lows.
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Residential Briefs
Just Price Solutions, Pasadena, Calif., the technology subsidiary of the nonprofit Neighborhood Housing Services of America, announced an automated, web-based process to create mortgage modifications, both individually and in bulk.
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Washington Update |
MBA Advocacy Update
On Tuesday, nearly two million people gathered on Washington's National Mall to witness the inauguration of Barack Obama--the largest inauguration crowd in U.S. history.
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The Week Ahead
The Mortgage Bankers Association holds its annual State of the Real Estate Finance Industry press briefing today at 10:30 a.m. ET.
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Commercial/Multifamily News |
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'Bad Bank' Creates Good Tool for Distressed Assets, Report Says
Troubled Assets Relief Program funds or an overall national Resolution Trust Corp.-type vehicle to aggregate and physically remove troubled assets from bank balance sheets would add liquidity to the commercial mortgage market and keep financial institutions private, said a report from Citigroup Global Markets Inc., New York.
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DealMaker of the Day
Texas Realty Capital, Austin, Texas, financed $22.7 million for Austin-Mueller Healthcenter, a 100 percent occupied health care property funded through Thrivent Financial for Lutherans, Appleton, Wis.
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QuoteLink
"If bought near current market price levels, the economics of the loans should return the government's entire investment with a good yield over time."
--Darrell Wheeler, head of CMBS Research at Citigroup Capital Markets, New York.
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