Realtors Push for Clarification of Appraisal Code Sunset Date

The National Association of Realtors yesterday urged the Federal Housing Finance Agency and the New York attorney general to clarify exactly when the controversial Home Valuation Code of Conduct will expire as part of an agreement hammered out back in 2008. The code, which was implemented by Fannie Mae and Freddie Mac earlier this year, has been criticized by real estate interests as being overly restrictive and limiting any housing recovery. At issue is whether the code will sunset in July or November of 2010, according to terms of the original agreement between the FHFA and the New York AG’s office.

Preliminary Numbers Show Originations Fell 9% in Third Quarter

A noticeable drop in refinance activity–particularly in the Fannie Mae/Freddie Mac sector–during the third quarter appears to have taken its toll on overall mortgage originations for the period. According to preliminary numbers analyzed by Inside Mortgage Finance, 3Q09 mortgage production slipped about 9 percent from the previous quarter to reach approximately $500 billion in volume. That would bring mortgage originations for the first nine months of the year to some $1.50 trillion.

Significantly, the biggest drop in third quarter originations took place in September when refinance activity declined the most. Nevertheless, the recent drop in 30-year mortgage rates to below 5 percent is likely to boost refinance business in the fourth quarter and limit any major decline in 4Q09 originations.

Wells Fargo and BofA Account for Nearly 40% of GSE Business in 2009

While more and more lenders have started selling mortgages to Fannie Mae and Freddie Mac this year, an increasing share of the two government-sponsored  enterprises’ business is coming from just two mega lenders. According to a new report in Inside Mortgage Finance, some 39 percent of Fannie’s and Freddie’s total business came from Wells Fargo and Bank of America in the first three quarters of 2009.

Wells was by far the biggest GSE customer in the year-to-date with a whopping $225 billion in volume and a 22 percent market share. BofA was in second place with $168 billion in GSE business and a 17 percent market share. Chase Home Finance and CitiMortgage rounded out the top four GSE customers in the first nine months with $88 billion and $55 billion, respectively, in volume.

Fannie Executives to Discuss HAMP Progress, Challenges

Two senior executives from Fannie Mae have joined the panel that will discuss the government’s Home Affordable Modification Program at an Inside Mortgage Finance audio conference on October 21 at 2 pm EDT. Fannie regulates its customers for HAMP compliance plus it serves as an administrator –including managing incentive payments– for the overall program. Joining Fannie Mae at the upcoming audio conference are executives from CitiMortgage, the Boston Fed as well as a legal expert on HAMP.

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Mortgage Securitization Rate Hits New High in 2009

The percentage of new mortgages rolled into securities climbed to a new record high in the first half of 2009 as the mortgage market’s dependence on government-related programs continued to grow. According to a new analysis by Inside MBS & ABS, a hefty 82 percent of the estimated $995 billion in mortgages originated in the first six months of the year ended up in mortgage-backed securities. This was up from 79 percent in 2008 and was the highest level ever recorded by Inside MBS & ABS.

While much of the blame for the recent mortgage crisis has been leveled at mortgage securitization, the plain fact is that most of the major government mortgage programs rely heavily on securitization. Some 93 percent of FHA and VA mortgages and 89 percent of Fannie Mae and Freddie Mac eligible mortgages were securitized in the first half.

Little Change in Mortgage Product Mix in 2Q09

Despite a 24 percent jump in mortgage origination activity between the first and second quarters of this year, there was relatively little change in the mix of mortgage products in the marketplace. According to a new analysis by Inside Mortgage Finance slated to be published this week, conventional conforming mortgages–the kind sold to Fannie Mae and Freddie Mac–continued to account for the largest share of new mortgages made in 2Q09 at 69 percent. This was down slightly from the 70 percent share found in 1Q09. The FHA/VA share of new originations rose modestly from 22 to 23 percent during the same period. Meanwhile, the jumbo share and home-equity loan share of new originations remained flat in the second quarter at 5 percent and 3 percent, respectively.