19 01, 2023


2023-01-19T13:29:46-05:00January 19th, 2023|4- GSE Activity Report|

You Know Where to File That?

We will shortly send clients an in-depth analysis of the CFPB’s latest controversial proposal which would establish a public registry on which supervised nonbanks would file a lot of data on any form contracts they require which includes covered provisions the Bureau thinks unfairly and even dangerously lead consumers to abandon important protections.  These would not directly affect mortgage agency securitization, but the rule but could prove a significant compliance impediment to PLS.


5 01, 2023


2023-01-05T12:37:19-05:00January 5th, 2023|4- GSE Activity Report|

End-Game Standards in the End-Time

As we previously noted, the U.S. banking agencies will finally, finally, finally get around to proposing their version of the Basel IV capital rules more recently dubbed the “end-game” standards.  These will come with new, unique U.S. fillips due to the tough approach to big-bank capital announced by Fed Vice Chairman Barr strongly supported by Acting Comptroller Hsu and FDIC Chairman Gruenberg along with staff at all three agencies who have been doing this a long time and seen more than a financial crisis or two.  This report identifies key mortgage-finance issues with strategic impact along with what’s to become of them in the end-game.


24 01, 2022


2023-04-21T14:29:12-04:00January 24th, 2022|4- GSE Activity Report|

The Processing Problem

A new Federal Reserve Bank of Atlanta study adds another element to those prior research argues are evidence of widespread racial discrimination in U.S. mortgage finance.  It adds processing speed to the list of discriminatory practices that now is said to include denial disparities, pricing, and refi rates.  The paper’s findings cast particular aspersions on loans originated for the GSEs, but it does so at a time when PLS distorted the market in terms of both underwriting and processing speed.  Its conclusions that GSE practices exacerbated discrimination and that processing times added to the problem are not, in our view, clearly validated by the data, which suggest to us that processing speed is an artifact of other market factors (e.g., discriminatory steering by some lenders, GSE AU and put-back power).


6 01, 2022


2023-04-25T15:47:20-04:00January 6th, 2022|4- GSE Activity Report|

The Cost of Equity

As noted yesterday, FHFA followed through on its heavy hints in the 2022 GSE scorecards, mandating significant hikes in upfront fees on most high-balance mortgages and those for second homes.  There is little question in our mind that these price hikes will restore portfolio-based origination channels for these loans and, to a lesser degree, also give PLS a boost.  How much of the market transfers out of the GSEs will determine the extent to which remaining high-balance and second-home fee business cross-subsidizes lower-fee products aimed at more affordable, lower-income market segments.  If, as FHFA seems to expect, business migrates and GSE capitalization improves, then cross-subsidization might be minimal.


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