Secondary Market

On the heels of the Federal Housing Finance Agency├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós announcement of its revised representation and warranty guidelines comes news that Freddie Mac will be increasing its repurchase claims in the near future. The revised rep and warranty guidelines were designed to provide more clarity in the market, but in the meantime, the FHFA Office of Inspector General reports Freddie Mac will increase repurchase requests to between $0.8 billion and $1.2 billion this year and between $2.2 billion and $3.4 billion overall.

Before the Five Star Conference went into full swing last week, one firm, Valuation Vision, announced the participation of one of its members at one of the industry event├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós noteworthy academic courses. The Oceanside, California-based valuation products company, a subsidiary of The Kirchmeyer Group, revealed that Bill Mohler, director of product development, would join other distinguished panelists in the class titled ├â┬ó├óÔÇÜ┬¼├àÔÇ£Opposing Values: BPO vs. Appraisals vs. Desktops vs. AVMs.├â┬ó├óÔÇÜ┬¼├é┬Ø

Richard Cordray, director of the Consumer Financial Protection Bureau, met with general praise and a few pointed concerns Thursday when he addressed the Senate Banking Committee when he presented the agency├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós semi-annual report. While most members of the committee praised the Bureau├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós progress thus far, a few questioned the extent of its authority and the implications of some of its actions. He said the agency has received 72,297 consumer complaints thus far, noting that complaints have ramped up over the past year.

The Federal Open Market Committee announced Thursday a new plan to stimulate a moribund economy continuing two earlier plans which at best stopped the economy from contracting. The FOMC said it would keep the federal funds rate near zero into mid-2015, six months longer than it had said previously. Separately, later in the day, the Fed issued its projections for the economy out to 2015, a more optimistic outlook than previous forecasts. The Fed painted a grim picture of the economy.

While Americans may be feeling pain at the pumps, Freddie Mac doesn├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ót believe the recent increase in gas prices will have a huge impact on the economy. In the GSE├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós most recent U.S. Economic and Housing Market Outlook, Freddie Mac VP and chief economist Frank Nothaft looked at energy costs and their potential effects on the economic recovery. The U.S. Department of Energy reported that gas prices averaged $3.84 per gallon on September 3, up about $0.50 over the past two months.

Mortgage applications shot up 11.1 percent from the week before, according to the Mortgage Bankers Association. The trade group found that mortgage loan volume fell by 12 percent on a seasonally unadjusted basis from the week before. According to their indices, refinance volume and purchases went up 12 percent and 8 percent, respectively. Purchases fell more than 15 percent on an unadjusted basis, although it stayed 7 percent higher than figures seen at the same time last year.

The housing market is seeing signs of recovery, and this recovery may be bolstered by the new representation and warranty framework the Federal Housing Finance Agency announced Tuesday, according to Fitch. Relying on signing offers and home tours as a future indicator of home sales, Redfin, a technology-driven real estate broker, predicts the market improvement seen this summer will continue into the fall. Offers fell 4 percent in August.

Though the Great Recession officially ended three years ago, weakened aggregate income is keeping Americans from climbing out of the income slump that resulted. So said Fannie Mae's Economic & Strategic Research group in its latest edition of Housing Insights. In the report, the research group turned its eye to average and aggregate earnings in the last five business cycles to examine the impact of weakened income growth in the current economic recovery.

Fannie Mae and Freddie Mac released new representations and warranty guidelines for lenders Tuesday to clarify lenders├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ó risk regarding repurchase claims and define steps lenders can take to challenge repurchase claims they feel are without grounds. Under the new guidelines, if a loan is current for 36 consecutive months, lenders ├â┬ó├óÔÇÜ┬¼├àÔÇ£will be relieved of certain repurchase obligations,├â┬ó├óÔÇÜ┬¼├é┬Ø according to the Federal Housing Finance Agency, regulator of Fannie Mae and Freddie Mac.

The National Credit Union Administration (NCUA) is suing the global investment firm UBS Securities for allegedly falsely representing the level of risk associated with mortgage-backed securities the firm sold to two federal credit unions. According to NCUA officials, the defaults and losses that resulted directly contributed to the collapse of both credit unions. The suit, filed in a federal district court in Kansas, alleges 10 counts of securities laws violations by UBS at both the federal and state level.