Fannie Mae and Freddie Mac enjoy considerable advantages because of their lower cost of capital and significant government subsidies. But with some conforming loans, the private market is finding a way to compete.
Commercial and multifamily mortgage debt outstanding grew $44.3 billion during the first three months of 2018, the largest first-quarter gain since before the Great Recession, according to the Mortgage Bankers Association.
JPMorgan Chase has largely sat on the sidelines of Federal Housing Administration lending due to compliance concerns. But recent regulatory relief efforts have Chase Home Mortgage CEO Mike Weinbach eyeing an opportunity to jump back in.
Fannie Mae's first-quarter profits were enough for it to rebuild its minimum capital buffer and pay the Treasury Department dividend after being forced to take a draw during the previous fiscal period.
If Freddie Mac's credit-risk transfer activities continue to grow, mortgage lenders could eventually see a reduction in the guarantee fees they pay to the government-sponsored enterprise, according to CEO Donald Layton.
The future secondary mortgage market entities will receive high investment grade ratings, even as there is no clarity on their scope or form, Fitch Ratings said.
As inflation fears put upward pressure on 10-year Treasury bonds and mortgage rates nationally, borrowers could start to take more notice of what lenders are charging them locally.
The U.S. is taking steps to stamp out the practice of servicemembers and veterans being pressured into taking mortgages they don't need, a move that officials say will lower consumer costs and could lead to financial penalties for lenders.
Testing of the common securitization platform is taking longer than expected, but the Federal Housing Finance Agency said it won't delay the 2019 launch of Fannie Mae and Freddie Mac's new single "uniform mortgage-backed security."
