Review Mortgage Lenders

Fannie Mae

Fannie Mae-Buster Brown

US R&B Chart #1 Hit in 1960, this song belongs to Buster Brown.

Mortgages without appraiser visits? Fannie Mae pilot asks why not ...

In a bid to cut time and costs from the mortgage process, Fannie Mae is testing whether appraisers can accurately determine a home's value without actually visiting the property.

Instead, the government-sponsored enterprise is asking appraisers to combine local market data with property-specific details from a home inspection to create a "hybrid appraisal" report.

Fannie Mae declined to comment about the program, but the pilot was described to NMN by multiple sources familiar with the tests.

Hybrid appraisals tend to be faster for lenders and cheaper for borrowers than traditional, "full" appraisals, particularly in rural areas and hot markets where there are appraiser shortages, and they are being increasingly used for originations in the home equity market in response to higher rates, costs and competition.

"We think it's a game changer, the fact that they're going down the path of testing it," said Jim Smith, president of Property Solutions, the valuations, title and asset management division of Computershare.

Fannie Mae rebuilds capital cushion with enough left to pay dividend

Fannie Mae's first-quarter profits were enough for it to rebuild its minimum capital buffer and pay the Treasury Department dividend after being forced to take a draw during the previous fiscal period.

Fannie recorded more than $4 billion in net income in the quarter, up from almost $3 billion in the first quarter of 2017 , and a net loss of more than $6 billion during the fourth quarter of 2017 that stemmed from a one-time adjustment to the value of its deferred tax assets.

The comprehensive income measure used to determine Fannie's dividend to Treasury was less than $4 billion, so Fannie was able to retain a minimum $3 billion capital buffer and pay a dividend of more than $900 million.

"We're replenishing the $3 billion capital buffer and paying the rest as a dividend," President and CEO Tim Mayopoulos said in an interview with National Mortgage News.

Fannie's smaller rival, Freddie Mac, also generated a multibillion-dollar profit during the first quarter. But while Freddie's comprehensive income of more than $2 billion allowed it to begin to rebuild its capital base, it wasn't enough to return a dividend to Treasury. Both GSEs' capital bases had dwindled in line with reforms drawn up by their conservator and regulator, the Federal Housing Finance Agency, until late last year, when they each were allowed to retain a minimum $3 billion.

Fannie Mae?

What is the difference between Fannie Mae and Freddie Mac in terms of their purposes and in terms of the assets they hold? Are these two essentially identical?

The main difference is how they came about. Freddie Mac is the result of the S&L bailout during the 80s. Fannie Mae's inception dates back to the time of the New Deal. They both, I believe, operate in a similar fashion.