TheMReport — News and strategies for the evolving mortgage marketplace.
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the latest SECONDARY MARKET FHFA, GSEs Overhaul Mortgage Insurance Master Policy The new policy will go into effect sometime this year. originators, and servicers, and they enhance the insurance protection provided to Fannie Mae and Freddie Mac, which ultimately benefits taxpayers." The new requirements include a number of provisions intended to facilitate faster and more consistent claims processing, establishing specific time frames and creating standards for the circumstances under which coverage must be maintained and when it may be revoked. Also included are requirements for master policies to support recently developed loss mitigation strategies and guidelines to promote information sharing among mortgage insurers, servicers, and the GSEs. FHFA anticipates the master policies will go into effect in 2014 pending review and approval by state insurance regulators. Both enterprises will provide guidance to lenders and servicers in the coming weeks regarding specific effective dates. The M Report | 59 se c on da r y m a r k e t M oving forward on another of its performance goals for 2013, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac have completed a major overhaul of mortgage insurance master policy requirements. Earlier last year, FHFA laid out its 2013 Conservatorship Scorecard, which—among other things—calls for the GSEs to develop aligned requirements for master policies. Through an ongoing effort, FHFA says both enterprises have worked with the mortgage insurance industry "to address and update gaps in the existing master policy framework." "Updating the mortgage insurance master policy requirements is a significant accomplishment for Fannie Mae and Freddie Mac," said FHFA acting director Ed DeMarco. "The new standards update and clarify the responsibilities of insurers, For their parts, Fannie Mae and Freddie Mac both put their support behind the new master policies. "The updated master policy for mortgage insurance announced today builds on the market reforms of the past five years, and we were happy to work with FHFA to bring about this latest step toward greater operational efficiency and transparency in the mortgage market," said Paige Wisdom, EVP and chief enterprise risk officer at Freddie Mac. "We look forward to working with our servicers and the nation's mortgage insurers as they adopt the new master policy." "Mortgage insurers are an important part of the mortgage finance system, and these changes help lay the foundation for a stronger system going forward," added Andrew Bon Salle, EVP of single-family underwriting, pricing, and capital markets at Fannie Mae. "These updates will help us better manage our credit risk, which we believe will ultimately benefit Fannie Mae, mortgage insurers, homeowners, and taxpayers." A na ly t ic s By industry, domestic profits at financial corporations increased $8.6 billion in the third quarter, a little more than a third of the increase recorded in the second. s e r v ic i ng $8.6 B Or ig i nat ion increase in the second (and a 1.5 percent estimated increase in the first third-quarter release). Durable goods increased 7.7 percent (down from 7.8 percent in the first estimate), nondurable goods increased 2.4 percent (compared to 2.7 percent in the first release), and services were unchanged (shifting from a 0.1 percent tick up in the first report). The GDP revisions were accompanied by a preliminary estimate of corporate profits in Q 3; BEA estimates profits from current production increased $38.3 billion in Q 3 compared to a $66.8 billion rise in Q2, while taxes on corporate income decreased $4.8 billion compared to a $10 billion increase the previous quarter. Dividends fell $179.7 billion in the third quarter, reflecting Fannie Mae's large contributions to the government in the second quarter, BEA reports. By industry, domestic profits at financial corporations increased $8.6 billion in the third quarter, a little more than a third of the increase recorded in the second. Domestic profits at nonfinancial corporations increased $13 billion compared to the second quarter's $37.8 billion.