Refinancing drives first-quarter GSE loan volumes
Although 2017 is forecast to be the year that refinancing dries up for the mortgage industry, the first three months of 2017 defied expectations. Conventional-loan refinancing
volume through the government-sponsored enterprises (GSEs) was higher than in any
first quarter since the refinance boom of 2013. The counts and volumes of single-family
loan refinances purchased by the GSEs (Fannie Mae and Freddie Mac) rose by double
digits compared to the same quarter in 2016, according to the GSEs’ quarterly reports.
Fannie closes on landmark Blackstone loan
Fannie Mae recently closed on a $1 billion loan with the Blackstone Group subsidiary Invitation Homes. This was the first time one of the government-sponsored enterprises has
bankrolled a major loan with an institutional investor heavily invested in single-family
rental properties. Fannie has previously only done deals in the single-family rental market involving 10 properties or fewer. The loan, which was originated by Wells Fargo, was
collateralized by more than 7,000 homes scattered around the country. The deal closed
on April 28.
Housing starts disappoint in April
With rising home prices and high consumer demand across the country, homebuilders
are feeling better about the housing market, according to recent surveys. Surging
confidence didn’t result in a big boost in building to start the spring, however. Overall
housing starts fell in April month over month but ran slightly ahead of the pace a year
ago, according to the U.S. Census Bureau. At least 250,000 more single-family starts
are needed annually above the current building levels of just under 900,000 to relieve
inventory shortages, according to some analysts.
GSEs are eying the chattel-loan market
The GSEs Fannie Mae and Freddie Mac have been exploring the viability of purchasing
and securitizing chattel loans, the dominant financing in manufactured-home sales.
Chattel loans, which are secured by the asset itself with no underlying property, comprise about 80 percent of all mobile-home financed purchases. The GSEs are expected to
embark on three-year pilot programs that mostly involve outreach and market studies.
Fannie has specifically proposed purchasing a small number of chattel loans in the third
year of its program.
Consumer confidence in the housing market rises
Consumer confidence in the housing market rose in April after flagging somewhat in
March, according to Fannie Mae’s Home Purchase Sentiment Index. Only the net share of
Americans who say it is a good time to sell a home decreased in the survey. More people,
however, expressed confidence that it was the right time to buy a home and were more
confident about their jobs and incomes, interest rates and home prices. n
By Victor Whitman
The percentage of homes in some stage
of foreclosure in the past first quarter, the
lowest foreclosure-inventory rate since 2007
Source: Mortgage Bankers Association
The annualized rate of single-family home
starts this past April, up 0.4 percent from the
prior month and 8. 9 percent year over year
Source: U.S. Census Bureau
The percentage of homes that were
affordable to buyers earning the national
median household income of $68,000
Source: National Association of Home Builders