Tag Archives: Freddie Mac

The ""juice"" that will fuel the economic recovery is housing, or more specifically, new home sales, according to Freddie Mac's economic and housing market outlook report for May. As the building of new homes adds to the availability of jobs, the unemployment rate should inch down. ""Based on historical correlations, every additional 100 thousand housing units started brings down the unemployment rate for construction workers by about three-fourths of a percentage point,"" the report stated. For 2013, Freddie Mac forecasts housing starts will increase by 200,000 units.

According to Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 3.51 percent (0.7 point) for the week ending May 16, a significant climb from last week, when it averaged 3.42 percent. Last year at this time, the 30-year fixed averaged 3.79 percent and falling. According to Bankrate's weekly national survey, the benchmark 30-year fixed rate climbed to 3.71 percent, an increase of 11 basis points.

Fannie Mae and Freddie Mac are offering the new Streamlined Modification Program to distressed borrowers before the effective date of July 1. As part of the program, Fannie Mae and Freddie Mac borrowers who are at least 90 days delinquent but no more than 720 days past due may be eligible for a modification that does not require the borrower to submit financial or hardship documentation.

Freddie Mac is hoping to spread information about a rule that allows people to leverage financial assets such as retirement accounts as qualifying income when applying for mortgage loans.Individual Retirement Accounts (IRAs), 401(k)s, distributions from retirement accounts, and funds acquired from the sale of a business can all contribute to a potential borrower's qualifying income, according to Freddie Mac. In order to contribute to a borrower's qualifying income, these financial assets must be accessible.

Most mortgage fraud takes place in the short sale and REO space, according to Rob Hagberg, associate director of fraud investigations at Freddie Mac. ""This area is ripe with fraud,"" he said during a webinar hosted by CoreLogic. While servicers and others in the industry have adapted to some fraud schemes and put measures in place to detect and prevent fraud, schemes continue to evolve as fraudsters find new ways to manipulate sales. Both short sale and REO fraud often require fraudsters to convince servicers a home is worth less than it actually is.

According to Freddie Mac, the 30-year fixed-rate mortgage (FRM) averaged 3.42 percent (0.7 point) for the week ending May 9, up from last week, when it averaged 3.35 percent. Frank Nothaft, VP and chief economist for Freddie Mac, explained the rise in fixed rates this week was a reaction to April's better than expected employment report.

Freddie Mac's first-quarter earnings came in slightly ahead of last year's final quarter, the company revealed in its quarterly filing. First-quarter net income at Freddie Mac was $4.6 billion, barely above the $4.5 billion recorded in Q4 2012 but well above the $577 million in last year's first quarter--and the second largest in company history.

Refinances through the government's Home Affordable Refinance Program (HARP) remained strong as mortgage rates stayed near record-low levels, according to the Federal Housing Finance Agency's (FHFA) most recent refinance report. In February, 97,738 Fannie Mae and Freddie Mac loans were refinanced under the program, bringing the total to 2.3 million since HARP's April 2009 inception. Underwater borrowers also continued to represent a large share total HARP refinance volume. Year-to-date through February, borrowers with LTVs beyond 105 percent accounted for nearly half of all HARP refinances.

The Federal Housing Finance Agency (FHFA) has directed Fannie Mae and Freddie Mac to limit future loan purchases to those that meet the Consumer Financial Protection Bureau's (CFPB) criteria for ""qualified mortgage"" loans. In a release, FHFA said that beginning January 10, 2014, the GSEs will no longer purchase loans subject to CFPB's ""ability to repay"" rule if those loans are not fully amortizing, have terms of longer than 30 years, or include points and fees in excess of 3 percent.

Without a government guarantee, Fannie Mae's and Freddie Mac's multifamily businesses would be less viable and ""have little inherent value,"" according to the Federal Housing Finance Agency (FHFA), the entities' conservator. As the FHFA works toward its goal of winding down the GSEs' presence in the market, the conservator required each GSE to determine whether its multifamily business could operate without a government guarantee. Both GSEs suggest without a government guarantee, their multifamily units would not be able to support affordable housing programs.