Oct. 2015 - Diversified We Stand, Divided We Fall

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60 | TH E M R EP 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 Freddie Mac's Portfolio Expands Further to Reach $1.925 Trillion The GSE's portfolio expanded for six straight months ending in July. W hile not as sub- stantial as June's increase, Fred- die Mac's total mortgage portfolio expanded in July, this time at a compound annualized rate of 0.8 percent, according to Freddie Mac's July 2015 Monthly Volume Sum - mary released in August. July marked the sixth consecu- tive month and the 11th time in the last 13 months Freddie Mac's mortgage portfolio expanded. The 0.8 percent rate of increase calculated to a month-over-month improvement of $1.29 billion, up to approximately $1.925 trillion. This is following June's annual - ized rate of increase of 2.8 per- cent, which caused the portfolio's value to rise by $4.5 billion. At the beginning of that 13-month period (July 2014), which saw 11 months of expan - sion for Freddie Mac's total mortgage portfolio, the portfolio's value was $1.895 trillion. Though the portfolio expanded in 11 of the last 13 months, July was only the 18th time in the last 67 months the portfolio grew dating back to January 2010. Freddie Mac's deputy chief economist, Len Kiefer, said low mortgage rates and surging home sales have driven up conventional mortgage activity considerably from where it was at this time last year, and he expects mort - gage origination volume to be up by 8 percent, to $100 billion, in 2015 compared to 2014. The serious delinquency rate on Freddie Mac-backed, single- family, residential mortgage loans fell by another 5 basis points from June to July, down to 1.48 percent and is now lower than the 1.52 percent serious delinquency rate reported for Freddie Mac-guaranteed loans in November 2008 at the start of the financial crisis. By comparison, CoreLogic reported the overall national delinquency rate at 3.5 percent in June. A total of 4,347 homeowners with Freddie Mac-backed loans received permanent loan modifi - cations in July, down from June's total of 4,895. Year-to-date as of July 31, a total of 34,659 Freddie Mac-insured homeowners have received loan modifications, an average of 4,951 modifications per month. In 2014, homeowners averaged 5,596 permanent loan mods per month. Single-family refinance loan purchase and guarantee vol - ume totaled $20.2 billion in July, down slightly from June's total of $20.2 billion. The percent- age of single-family refinance loan purchase and guarantee volume that comprised the total single-family mortgage portfolio dropped slightly from 56 percent in June to 55 percent in July after dropping from 61 percent in May. Relief refinance mortgages comprised about 9 percent of all of Freddie Mac's single-family refinance volume during July. The aggregate unpaid principal balance of Freddie Mac's mort - gage-related investments portfolio declined by about $9.6 billion in July after experiencing a $7 bil- lion drop in June. Administration Outlines FHA Financing for PACE Loans FHA will encourage energy efficiency through its new program. T he Federal Housing Administration (FHA) and the Obama administration said in August they plans to issue a set of guidelines that will support borrowers who want to make energy-efficient improvements to their homes. The new guidelines are part of the White House's National Clean Energy Summit. In addition, the FHA also noted its intent to allow borrowers to use their single-family financing for properties with existing Property Assessed Clean Energy (PACE) loans that meet certain conditions. "These new tools will help homeowners make smart choices for their pocketbooks and for the environment," said Julián Castro, HUD secretary. "HUD and the Obama Administration are proud to invest in American families and in the future of our planet." Through this guidance FHA is committing to develop more spe - cific guidance in the near future that will include the following requirements: » » PACE liens that preserve pay- ment priority for first lien mort- gages through subordination are eligible; » » PACE assessments must be fixed-rate and fixed repayment schedule; » » PACE assessments must be recorded and identifiable to the lender; and » » PACE assessments must be at- tached to single-family proper- ties, as defined by FHA, which are 1- to 4-unit dwellings. FHA also announced a new partnership with the Department of Energy (DOE) that will incor- porate the use of DOE's Home Energy Score into FHA's single- family existing Energy Efficient Home (EEH) program. Under the new partnership, FHA will provide flexible underwriting to recognize the reduced costs of utilities when those costs are established with the DOE's Home Energy Score. Homebuyers or homeowners who want to obtain an FHA- insured purchase or refinance mortgage for a single-family home that receives a Home Energy Score of 6 or higher will be eligible to in - crease their income qualifying ratio by 2 percent above the standard single family FHA limit. "These new tools will help homeowners make smart choices for their pocketbooks and for the environment." —Julián Casto, HUD Secretary

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