Forget the national jobs report for a second. The mortgage industry may have another problem on its hands: originations as measured by Fannie Mae and Freddie Mac acquisitions in the secondary market took it on the chin late this spring.
Fannie Mae bought just $52 billion of home mortgages from its seller/servicers in April, a 45% plunge from March, according to new figures released by the GSE. Freddie Mac bought $26 billion of loans, a 39% decline from March.
However, compared to the same month a year ago, secondary market acquisitions by both GSEs are up — Fannie by 33%, Freddie by 9%.
One observer close to the GSEs said the March purchase figures were an aberration because lenders rushed to get loans closed before an incoming g-fee increase. In other words, some of April’s volume was squeezed into the March number. However, others contend that it’s unlikely that a new 10 basis point g-fee charged on each newly originated loan in April would cause such a down draft in secondary market sales.
Anecdotally, many lenders say they are still hiring loan officers and are gaining market share because mortgage giants the likes of Bank of America, CitiMortgage and Residential Capital Corp. continue to scale back their presence in residential finance.
Secondary market loan purchases by Fannie and Freddie reflect activity in the primary market.
Fannie also reported that its issuance of mortgage-backed securities
fell 46% from March to $48.4 billion in April.
The sudden drop in mortgage market activity comes at a time when interest rates have never been lower. Early Friday morning, the yield on the benchmark 10-year Treasury was at an all-time low: 1.48%.
In other Fannie Mae news, the GSE’s single-family delinquency rate fell to 3.63% in April down 4 basis points from the month prior. A year ago, 4.19% of Fannie’s guaranteed loans were 90 days or more past due.