Mortgage Professionals Should be Optimistic About the Future

TheMReport — News and strategies for the evolving mortgage marketplace.

Issue link:

Contents of this Issue


Page 59 of 67

58 | Th e M Rep o RT O r i g i nat i O n s e r v i c i n g a na ly t i c s s e c O n da r y m a r k e t SECONDARY MARKET the latest SECONDARY MARKET industry Weighs in on gse Wind-down More than two-thirds of lenders and mortgage industry professionals back GSe reform but oppose completely eradicating the mortgage giants. a s policymakers con- tinue to mull over the possible dissolution of Fannie Mae and Fred- die Mac, a new survey shows industry professionals support the continued—albeit reduced— presence of the two mortgage giants in the market. In a report released last month, the Collingwood Group said 65 percent of lenders and other mort- gage industry workers polled by the company support the push for GSE reform, calling their current state of conservatorship under the Federal Housing Finance Agency unsustainable. At the same time, none of the survey respondents favored a complete wind-down or elimina- tion of the GSEs, calling instead for administrative changes and greater attention paid to issues ranging from "aggressive put-back tactics" to the companies' over- whelmingly dominant position in the market, which some firms see as the government crowding out the private sector. The Collingwood Group's findings run counter to tactics taken by lawmakers like Sens. Tim Johnson (D-South Dakota) and Mike Crapo (R-Idaho), party heads of the Senate Banking Committee and authors of a bill designed to dissolve the GSEs and replace them with a govern- ment corporation that has a more limited role. The Johnson-Crapo bill passed a committee vote against the wishes of many Democrats, but has yet to see a full Senate vote, despite support from the Obama administration. Critics of the legislation, including commit- tee members Charles Schumer (D-New York), Elizabeth Warren (D-Massachusetts), and Sherrod Brown (D-Ohio), say it doesn't do enough to provide affordable hous- ing for lower-income Americans. While Washington contin- ues to debate the next step for Fannie and Freddie, the Collingwood Group reports the two companies are mak- ing strides at improving their relationships in the mortgage industry. Sixty-seven percent of respondents in the firm's survey indicated Freddie Mac has become more supportive and re- sponsive to lenders' needs in the last year, while 63 percent said the same for Fannie Mae. "The industry's perception of Fannie Mae and Freddie Mac's boost in performance over the last year is evidence of the fight for market share," the Collingwood Group said in its report. "It's clear that the agen- cies are providing better service to customers in order to compete with each other and the private- label market." When asked which factors most influence their decisions about which GSE to sell their loans to, nearly half of respon- dents cited price as the biggest consideration, with one anony- mous respondent saying, "Amidst margin compression and rising expenses, we have to capture every basis point." Twenty-four percent of those polled said the most important factor is which GSE offers bet- ter support for smaller lenders, while 22 percent were more con- cerned about rep and warrant relief and enforcement.

Articles in this issue

Archives of this issue

view archives of TheMReport - Mortgage Professionals Should be Optimistic About the Future