TheMReport — News and strategies for the evolving mortgage marketplace.
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local edition SECONDARY MARKET Or ig i nat ion Adoption of these new limitations by Fannie Mae and Freddie Mac is in keeping with FHFA's goal of gradually contracting their market footprint and protecting borrowers and taxpayers. s e r v ic i ng "The leadership behind Sabal Commercial Advisors represents the best in class," Jackson said. "Ned Smith and Sarah Suther are both CMBS veterans and have demonstrated a successful track record in this industry." The leadership team will be supported by a crew of skilled underwriters strategically located throughout the country, enabling the firm to provide clients with a single-source CMBS services solution demonstrating regional expertise and national coverage. FHFA Tells GSEs to Purchase Only QM Loans A na ly t ic s Agency says it is keeping its word to reduce GSES' market footprint and protect consumers. WASHINGTON, D.C. // The delivery eligibility requirements outlined in their selling guides, including loans processed through their automated underwriting systems and those with a debt-to-income ratio (DTI) of greater than 43 percent—which fall outside the classification of qualified mortgages unless they are eligible for purchase by the enterprises under the special or temporary qualified mortgage definition. Freddie Mac Continues to Post Banner Profits Refinance volume is large contributor to large earnings. WASHINGTON, D.C. // 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 Q 4 2012 but well above the $577 million in last year's first quarter—and the second largest in company history. First-quarter comprehensive income was $7 billion, up from $5.7 billion quarter-over-quarter. While Fannie Mae hasn't yet released its first-quarter earnings, the company reported record profits in the fourth quarter (and in 2012 as a whole). The latest reports from both enterprises illustrate how the ongoing recovery has contributed to growth. Through the end of March, Freddie Mac provided—through purchases and issuances—approximately $138 billion in liquidity to the housing market (with $132 billion going toward single-family purchases and issuances and $6 billion going to the multifamily sector). According to the filing, refinance loan purchases accounted for about $111 billion of the company's single-family volume during Q1, while purchase mortgages made up the remaining $21 billion. Relief refinance mortgages (including those originated through the Home Affordable Refinance Program) accounted for $33 billion. Credit quality also continues to improve. As of the end of Q1, loans originated in 2009–2013 made up 5.5 percent of Freddie Mac's credit losses. As expected, loans originated in 2005–2008 made up the vast majority—84.9 percent—of losses. The single-family serious delinquency rate was 3.03 percent as of March 31, down significantly from 3.25 percent at the end of 2012. The multifamily delinquency rate was 0.16 percent, down slightly from 0.19 percent as of December 31. The M Report | 79 se c on da r y m a r k e t 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-torepay 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. Effectively, this excludes interest-only loans, loans with 40year terms, and those with points and fees exceeding the thresholds established by regulations. CFPB handed down those guidelines earlier this year as part of its efforts to protect borrowers and assure lenders they can operate safely. "Adoption of these new limitations by Fannie Mae and Freddie Mac is in keeping with FHFA's goal of gradually contracting their market footprint and protecting borrowers and taxpayers," the agency said. Fannie Mae and Freddie Mac will continue to purchase loans that meet the underwriting and