Fannie Mae is snatching potential profits away from mortgage lenders as it posts record earnings that are fueling industry concern the government-backed company is regaining its swagger even as lawmakers plot its demise.
Edward J. DeMarco, the overseer of taxpayer-supported Fannie Mae and Freddie Mac, said the firms need to increase the fees they charge to guarantee mortgages in states where it’s costlier for them to deal with bad debt.
Yields on Fannie Mae and Freddie Mac mortgage securities that guide U.S. home-loan rates approached record lows relative to Treasuries as evidence of climbing borrowing costs and homeowners’ refinancing difficulties reduce concern that supply will increase.
Redwood Trust Inc. plans to sell securities backed by about $400 million of new U.S. home loans, only the fourth sale of such debt since credit markets seized in 2008, according to two people with knowledge of the transaction.
Government-backed mortgage bonds are poised to underperform Treasuries this month by the most since the height of the global financial crisis, roiled by speculation about potential public policy changes and a wave of home refinancings spurred by record-low interest rates .
Yields on Fannie Mae and Freddie Mac mortgage securities that guide U.S. home-loan rates fell to the lowest in more than a year and many of their notes reached record high prices as investors seeking safe debt wager prepayments will stay manageable.
Redwood Trust Inc. sold bonds tied to about $405 million of new U.S. home loans, the fourth sale of such debt without government backing since credit markets seized in 2008, according to a person with knowledge of the offering.