The nation's mega banks and other depositories repurchased roughly $30 billion in residential mortgages from Fannie Mae and Freddie Mac in the second-half of 2009 and will suffer losses of up to 40% on the loans, according to a new report from Credit Suisse. Penned by CS analyst Moshe Orenbuch, the report notes that repurchase volumes are accelerating and will "remain elevated in 2010 and moderate thereafter." Mr. Orenbuch estimates that large cap banks followed by CS account for roughly 88% of the $30 billion in buybacks. Among this universe of large caps, he told National Mortgage News, is Wells Fargo & Co., Bank of America, JPMorgan Chase, and Citigroup -- all of which have acknowledged buyback problems in earnings reports. The analyst said the loans being repurchased are "likely to be delinquent and/or deficient" and include what he called "differentiated" products, meaning alt-A, interest only mortgages and payment option ARMs. But there is some good news in the report: "given the bulk of the repurchases are from the 2007 vintage, we would expect repurchase demands to moderate in 2011, as the quality of industry originations strengthened during 2008."
So who among you can dig up for me, the $$$$ numbers and %%% numbers about current and historical buy back requests. Both those that resulted in an actual buy back vs. push backs where lenders said 'Nope, what are ya gonna do about it GSE's?' I bet previously most buy-back requests we're less than 25% of what they are these days, and that today a lot of seller/servicer lenders say NO when previously they probaby rarely said no - that's my sense of it. Why? Because today they're Government union employees and they're into over-reaching by nature - plus they've successfully smothered the securitization market the last couple of years, giving them their current 'train-wreck' monopoly. :-)
GOP Plan Wants 'Private Capital' to Replace Fannie/Freddie
Republicans on the House Financial Services Committee Friday released a bare bones blueprint for the future of the nation's housing finance system, saying "private capital" should be the "primary source" of home mortgage money, replacing Fannie Mae and Freddie Mac. According to a document entitled "Goals and Principles for GSE Reform," Republicans, led by ranking member Spencer Bachus (R-Ala.), said Fannie and Freddie should wind down their operations within four years. Under its blueprint, the GOP thinks a covered bond market should replace the secondary market role currently played by the GSEs. They also want to see an end to GSE "jumbo loan limits" which they say is a taxpayer subsidy for mortgages made to millionaires. To date, the government has provided $127 billion in capital to Fannie and Freddie through the purchase of preferred stock. The cash has kept their net worth positions above zero. Next year the Obama Administration will release its official plan on restructuring the GSEs. Fannie and Freddie were taken over by the government in September 2008.
Why bother having TWO plus FHA - why not just ONE Government agency in housing (and a small one at that), since in my view, all they've done so far is screw it up, like everything else they seem to do these days.
Citigroup Reverses Course on Correspondent Lending
Citigroup -- which has whittled down its third-party lending programs severely over the past year -- is changing course, at least when it comes to correspondent loan production. It a recent interview with Bloomberg, Sanjiv Das, who heads the lender's U.S. mortgage business, confirmed that CitiMortgage, O'Fallon, Mo., will ramp up its purchase of mortgages underwritten by other companies and keep more loans on its balance sheet. Two months ago National Mortgage News reported that CitiMortgage had been selectively contacting certain high performance loan brokers with the idea of expanding its wholesale business. According to the Quarterly Data Report, CitiMortgage bought $3.2 billion of home mortgages through the correspondent channel in the fourth quarter, a stunning 69% decline from 4Q08. Among correspondent buyers, CitiMortgage ranks sixth nationwide but was the only top 10 buyer to post a huge decline in 4Q. (A year ago CitiMortgage cut back its broker network significantly.) Now, based on what Das told Bloomberg, it appears CitiMortgage has changed course on correspondent lending. "We decided that we can't have a consumer bank without a mortgage product," Das said. "Then, we said, 'let's now start to grow this business back in a high-quality way."'
No big surprise with this move ... bet I could have made some money had I bet with people this trend would begin right about now -- not like I'm some genius, I've simply been an eye witness to this sort of thing several times before in history ... so it figures ....
| |
