When the godfather of mortgage securitisation speaks, you listen.
This week Lewis Ranieri devoted a not insignificant amount of time from his Milken conference panelist discussion to Harp 2.0 — the US government’s refinancing programme for underwater mortgages. Read more
Policymakers are considering ways to buy troubled government-guaranteed mortgages from a new refinancing programme in case investors balk, people familiar with the matter have told the FT. Mortgages refinanced under the Home Affordable Refinance Program, which has recently been extended to cover more loans, are currently not eligible for packaging into securities. Officials are considering allowing Fannie Mae and Freddie Mac to issue MBS made up of refinanced loans to investors, and for the agencies to buy the MBS to retain on their balance sheet if a private market fails to develop. Read more
One part of Obama’s new refi plan that remains open-ended is exactly which changes to rep and warranty exposure will be granted to originators. Since the potential for putbacks has been one of the biggest obstacles standing in the way of more Harp participation, the details, which we’ll have on November 15, matter.
To that end, here’s a useful chart from Nomura (click to enlarge): Read more
US mortgage giants Fannie Mae and Freddie Mac will ease the refinancing process for distressed US homeowners, reducing fees and allowing borrowers who owe significantly more on their mortgages than the actual value of their homes to acquire new government-backed loans, reports the FT. President Obama promoted the plan in Nevada, the state with the highest foreclosure rate in the US, says Bloomberg. (And a key state in the 2012 election.) FT Alphaville reckons the plan lacks key details and ambition. Read more
Details of Obama’s allegedly supercharged Home Affordable Refinance Program are here, and the Wall Street Journal had the scoop on Monday morning.
For our part, we’ll focus on this, from the FHFA’s Q&A (our emphasis): Read more
Fannie Mae and Freddie Mac are exploring ways to help homeowners refinance into cheaper mortgages, Bloomberg says, but the companies’ regulator stopped short of promising to deliver on a proposal from President Barack Obama. In his speech on Thursday, President Obama pledged to “work with federal housing agencies to help more people refinance their mortgages at interest rates that are now near 4 per cent”. Federal Housing Finance Agency officials met on the weekend with with mortgage industry executives to discuss possible changes to the Home Affordable Refinance Program, or HARP, the news agency says, citing two people with knowledge of the private meeting. Edward DeMarco, acting director of the FHFA, said agency must determine whether the programme can be expanded without more losses for the firms. Read more
As we noted earlier, President Obama’s speech was perhaps a little too hotly anticipated, given the political constraints it faces.
And markets were not deeply impressed — Asia’s main indices were up less than 0.5 per cent, and that’s with Chinese consumer price inflation slowing as expected. Treasury yields and crude oil futures were up, but again, just a little. Read more
In 2007, Credit Suisse achieved something of a coup in what was then a much smaller, less mainstream financial blogosphere.
Analysts at the bank produced the following chart, which quickly (and uniquely) went viral, appearing on Calculated Risk and a slew of other housing and financial blogs. The chart even made a cameo appearance in the pages of an IMF report on ‘risks to global financial stability’. Read more