WASHINGTON (8/6/14)--The number of government-sponsored mortgage bonds issued in the beginning of 2014 fell to its lowest level since 2000, the Federal Housing Finance Agency (FHFA) reported Tuesday, with the share of securities sold by Fannie Mae and Freddie Mac also falling (Politico Aug. 5).
As interest rates have started to edge up, fewer borrowers are refinancing their mortgages because there is less financial incentive to do so, Politico reported. In turn, mortgage bond activity has been tamped down.
Freddie Mac and Fannie Mae leaders continue to urge borrowers who qualify to utilize the government-backed refinancing programs, but their work only has made a small dent, as the sluggish housing market, anchored by a dearth of first-time homebuyers, has tripped up business, Politico noted.
About $196 billion in total mortgage-backed securities were sold in the first quarter, according to the FHFA, including bonds issued by Ginnie Mae. Fannie Mae and Freddie Mac now account for 70% of all mortgage-bond issuances, down from 74% at the end of 2013.
Meanwhile, to recoup mounting losses but avoid burdening taxpayers, the two investment giants may have to rely more on the fees they collect from buying loans and selling mortgage-backed securities.