We are starting to see some early signs of the commercial banking sector finally start to move away from the Federal Government’s role in the mortgage market. We have a very long way to go before we can say that the market is weened off of Fannie Mae and Freddie Mac. At this point, Fannie, Freddie and FHA are the market.
Wells Fargo is the largest mortgage originator in the country so it’s a big deal that they are taking this step at establishing a business that provides GSE-free mortgages. This move also appears to show that there may be a return to risk appetite from investors who are once again willing to invest in mortgage backed securities. Although Wells Fargo hasn’t stated for sure if these GSE-free mortgages will be securitized and sold to investors, it may be something they look at down the road again.
Last week there was a story about Wall Street investors starting to step in to buy mortgage backed securities (MBS) again.
Many people ask if we are at the bottom of the housing market yet. Who knows, but stories like Wells Fargo looking at providing GSE-free mortgages and Wall Street starting to invest in MBS again is different this time than it has been every spring since the housing market turned down 6 years ago.
- Wells Fargo to Limit HARP 2 Financing (harptwo.wordpress.com)
- “I’m amazed people are still paying there mortgage”, Says Wells Fargo Economist. (cohenonrealestate.com)
- Plotting the Future of Fannie and Freddie (business.time.com)
- Second mortgage complicates refinancing (seattletimes.nwsource.com)
- What are Agency Bonds or GSE Bonds? Are they like Treasuries? | LearnBonds.com (learnbonds.com)