Posted on 10/25/2013 7:30:21 AM PDT by whitedog57
The mortgage market is undergoing a transformation. Fannie Mae and Freddie Mac are doing more credit risk-sharing deals (a sign of things to come) while Citi decides to sells its mortgage servicing portfolio.
Oct. 25 (Bloomberg) By Jody Shenn — Freddie Mac “expects to complete another” sale of risk-sharing securities “shortly,” FHFA acting director Ed DeMarco said in speech yesterday afternoon.
• NOTE: Freddie spokeswoman said last month it hopes to complete another deal this year; Fannie Mae execs said this month no more deals in 2013, working on one for early next year • FHFA plans for “scope and depth of risk-sharing transactions to continue to expand,” DeMarco says • “Going forward, I expect to see work done on other types of transactions such as senior/subordinated structures for certain portions of the Enterprises’ mortgage guarantees.” * DeMarco also says GSE g-fees to continue rising after about doubling to ~50 bps from pre-conservatorships • May rise ~20 bps more, Compass Point’s Isaac Boltansky says
And now we find that Citigroup is selling its mortgage-servicing rights on its mortgages.
Oct. 24 (Bloomberg) — Citigroup Inc., the third-biggest U.S. bank, is selling mortgage-servicing rights on $63 billion of loans, its largest potential sale of this type since the 2008 financial crisis, according to two people briefed on the offer.
The servicing rights, or MSRs, represent about 21 percent of Citigroup’s total contracts as of midyear, and could be sold in pieces, said the people, who asked not to be identified because the sale is private.
Well, apparently not TOO private.
We are seeing a fundamental transformation in the mortgage industry. Fewer mortgages being origination and serviced and more risk-sharing with investors.
mtgvol
Obama's speech on the US economy spelled out the beginning of the end for federally-controlled mortgage buyers Fannie Mae and Freddie Mac. “We’ll work with both parties to turn the page on Fannie and Freddie, and build a housing finance system that’s rock-solid for future generations,” Obama said, according to a copy of his prepared remarks
The House Financial Services Committee approved a bill in July that would get rid of the firms in five years, to be replaced by a National Mortgage Market Utility to help "securitize" mortgages. (Excerpt) more at blogs.marketwatch.com
NOTE WELL---what Obama left out of his remarks Wall Street Journal report on page A15---article entitled “Treasury’s Fannie Mae Heist“.
WSJ: The Federal government is seizing the substantial profits of the government-chartered mortgage firms, Fannie Mae and Freddie Mac, taking for itself the property and potential gains of private investors the government induced to help prop up these companies. This conduct is intolerable.” A scathing article follows--a must read.
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