TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/624250
12 | TH E M R EP O RT MONTH IN REVIEW The Federal Reserve made the long-awaited, much-anticipated announcement last month regarding a federal funds rate increase. The announcement came as the Fed wrapped its eighth and final Federal Open Market Committee (FOMC) meeting of 2015. The federal funds rate is now one-fourth to one-half percent, according to the FOMC. Fannie Mae's gross mortgage portfolio contracted for the seventh consecutive month in October and the eighth time in 10 months, according to Fannie Mae's October 2015 Monthly Volume Summary. The FHFA announced the Freddie Mac and Fannie Mae's maximum conforming loan limits for 2016. According to the agency, the maximum conforming loan limits for mortgages acquired by the GSEs in 2016 will remain at the current level of $417,000 for one- unit properties. According to Freddie Mac, in the five year-period between 2008 and 2013, the cost of servicing a performing loan increased 2.6 times (from $59 to $156), while the cost of servicing a non-performing loan spiked by 4.9 times (from $482 to $2,357) during the same period. A group of Citigroup Inc. investors recently filed a lawsuit against the bank, with the allegations claiming the bank failed to address problems regarding residential mortgage-backed securities. The suit, filed by Pacific Investment Management Co. and other investors, accuses Citigroup of disregarding problems related to toxic RMBS backed by $13.8 billion of mortgage loans. Housing starts among single- family homes built for rent increased to approximately 9,000 for the third quarter of 2015, up from about 7,000 during the third quarter of 2014, according to data from the U.S. Census Bureau's Quarterly Starts and Completions by Purpose and Design and National Association of Home Builders analysis. HARP refinances plunged in Q3 2015. According to the Federal Housing Finance Agency third- quarter Refinance Report, a total of 25,824 HARP refinances were completed between July and September, down from the 31,561 refinances completed from April to June. Rate Hikes, Trends & Lawsuits