Brett Ludden is managing director and co-head of the financial services team at Sterling Point Advisors, a merger and acquisitions advisory firm. He is also the co-founder and managing partner of Augment Analytics.
“We’re seeing a downward trend in total [loans] repurchased [on a dollar basis], and that’s true for both Fannie and Freddie,” Ludden said. “I anticipate that trend continues for both.
“… But the data [for Q3 2023] indicate that Freddie’s repurchase rates are going down at a much faster pace [than Fannie’s]. … We’ll get more definitive data when we get the fourth-quarter results to see if the trends continue at that point.”
A report from the Urban Institute focused on Fannie and Freddie loan repurchase rates shows that the GSEs in recent years “have become more aggressive, forcing more repurchases earlier in the life of the loan than was the case in earlier vintages.”
The Urban Institute report, published in November 2023, shows that the average number of months from origination to repurchase between 2005 to 2008 (prior to and during the early stages of the
The loan repurchase trend that began to sting many mortgage originators in 2022 appears to finally be winding down, according to a recent report by Sterling Point Advisors and Augment Analytics.
The report, based on loan-level data from Fannie Mae and Freddie Mac, shows that the dollar amount of loan repurchases peaked in the second quarter of 2022, at $630 million for Freddie Mac and $593 million for Fannie Mae.
A large portion of those loans, once repurchased from the government-sponsored enterprises (GSEs) at par, were later resold for much less in the so-called “scratch and dent market.“ This created balance-sheet details ⇒
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