http://www.mortgagebankers.org/mbanewslink/issues/2005/05/20.asp#r1
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`Volume 4 | Issue 97 | Friday, May 20, 2005
`
`Sponsored by:
`
`
`
`Top National News
`White House Sets Forth Plan to Limit Size of Fannie, Freddie
`(Washington Post)
`Fannie Mae Says Reserves Are Increasing on Schedule (New
`York Times)
`New Hope for Buyers With 'Thin' Credit (New London Day
`(CT))
`Home Mortgages: Interest Rates Are Lowest Since February
`(Chicago Tribune)
`High Interest in Interest-Only Home Loans (San Francisco
`Chronicle)
`First American Ups Stake in Dorado Corp. (Inman News
`Features)
`Regulators OK Plan to Help Federal Home Loan (Seattle
`Post-Intelligencer)
`Senator to Hold Hearing on Title Insurance (Inman News
`Features)
`
`Residential Finance News
`Greenspan's Comments on GSEs
`New Technology Could Challenge Ubiquitous Blackberry
`Analysis: Leading Indicators Continue Streak of Declines
`Residential Briefs
`
`Commercial/Multifamily Finance News
`'Magic' Johnson Group Urges REMICs Modernization
`DealMaker of the Day
`
`MBA News
`CampusMBA eMortgage Audio Program May 25
`Next MBA State Legislative/Regulatory Exchange May 25
`
`Spotlight: Servicing
`The Role of Compliance in Correspondent Lending
`
`
`White House Sets Forth Plan to Limit Size of Fannie,
`Freddie
`
`"The Federal Reserve
`Board has been unable to
`find any credible purpose for
`the huge balance sheets built
`by Fannie [Mae] and
`Freddie [Mac] other than
`the creation of profit through
`the exploitation of the
`market-granted subsidy.
`Fannie's and Freddie's
`purchases of their own or
`each other's
`mortgage-backed securities
`with their market-subsidized
`debt do not contribute
`usefully to mortgage market
`liquidity, to the enhancement
`of capital markets in the
`United States or to the
`lowering of mortgage rates
`for homeowners."
`--Federal Reserve Chairman
`Alan Greenspan, in a
`speech yesterday in Atlanta.
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`the size of GSE portfolios. We see little empirical support for this notion. For example,
`we have found no evidence that fixed-rate mortgages were difficult to obtain during the
`early 1990s, when GSE portfolios were small. Indeed, the share of fixed-rate mortgage
`originations averaged slightly less than 80 percent in 1992, when GSE portfolios were
`small, and averaged 66 percent in 2004, when GSE portfolios were large. Clearly, these
`data do not support the proposition that the size of the GSEs' portfolios positively
`contributes to the availability or popularity of fixed-rate mortgages. It is, of course,
`mortgage securitization, and not GSE portfolios, that is the more likely reason for the
`continued market support for the popular thirty-year fixed-rate mortgage.
`
`"Without a notable direct or indirect effect on primary home-mortgage rates, it is
`difficult to see how the GSEs' portfolios can influence homeownership…Even with smaller
`portfolios, Fannie and Freddie would remain formidable institutions and their profits
`would provide more than sufficient support for their special affordable-housing
`programs. GSE mortgage securitization is a profitable activity and, with its modestly
`subsidized guarantee, earns above-normal rates of returns.
`
`"As I testified before the Congress both this year and in 2004, the GSEs need a
`regulator with authority on par with that of banking regulators, with a free hand to set
`appropriate capital standards, and with a clear and credible process sanctioned by the
`Congress for placing a GSE in receivership, where the conditions under which debt
`holders take losses are made clear. However, if legislation takes only these actions and
`does not limit GSE portfolios, we run the risk of solidifying investors' perceptions that
`the GSEs are instruments of the government and that their debt is equivalent to
`government debt.
`
`"The GSEs will have an increased facility to continue to grow faster than the overall
`home-mortgage market; indeed because their portfolios are not constrained, by law, to
`exclusively home mortgages, GSEs can grow virtually without limit. GSE's mortgage
`securitization, in contrast to their portfolio holdings, is the key to maintaining and
`enhancing the benefits of Fannie and Freddie to homebuyers and secondary mortgage
`markets. And mortgage securitization, unlike the GSE portfolio holdings, does not create
`substantial systemic risks.
`
`"Thus, one way to limit the GSE portfolios is to create a strong presumption that almost
`all mortgage-related assets can be securitized. The GSEs would need to establish, with
`their regulator, that any asset held in their portfolio could not be securitized. In other
`words, the method of GSE financing most consistent with their missions is to securitize
`assets first and to hold in their portfolios only those assets that are very difficult or
`unduly expensive to securitize.
`
`"Without the needed restrictions on the size of the GSE balance sheets, we put at risk
`our ability to preserve safe and sound financial markets in the United States, a key
`ingredient of support for housing.
`
`"Financial instability coupled with the higher interest rates it creates is the most
`formidable barrier to the growth, if not the level, of homeownership. Huge, highly
`leveraged GSEs subject to significant interest rate risk are not conducive to the
`long-term financial stability that a nation of homeowners requires.”
`(Back To Top)
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`New Technology Could Challenge Ubiquitous Blackberry
`MBA (5/20/2005) McAfee, Jamie
`Move over Blackberry and Treo, there's a new kid on the block.
`
`Although the name of it is not official yet, insiders at the service provider,
`Rosetta-Wireless Corp., Oakbrook Terrace, Ill., refer to it as Secure Mobile
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`Enterprise (SME).
`
`Rosetta touts its proprietary (patents pending) software-driven “wireless pipeline” for its
`ability to enable information to be continuously pre-positioned to mobile users, so that
`any information needed is already waiting to be accessed. Keith Campbell, vice
`president of Rosetta-Wireless, said as workers are faced with limited capabilities in
`text-only versions or limited access to wireless connections, they are looking for more
`options.
`
`“All the stuff you have access to we pre-position to a device the size of a palm pilot,”
`Campbell said. “We put all those files, and as they change on your enterprise, we
`continually monitor them and we send them out to that device. Wherever you are, when
`you need to look at a piece of information, it is already there."
`
`Campbell described the technology as "similar to a Blackberry without a screen. You are
`going to access it via a wireless connection with a laptop or PDA, 802.11 or Bluetooth,"
`he said. "It is like a remote drive for your PDA or your laptop. We do all that in the
`background. We communicate over two channels over a cellular band, which is a
`wireless wide-area network or an 802.11 via an available hot spot.”
`
`Download times are not a factor either. According to Campbell, “Because we keep track
`of both ends of the data—visualize a pipe connecting your enterprise to this little unit
`and because we track both ends we can really use cellular the way nobody can. We can
`be dropped to pick up a call for example. We use cheap airtime because they can cut us
`off at anytime and we will pick right up where we left off."
`
`Nowadays, security is also a major concern for mobile workers. Hackers could target
`them since their connections are not as protected as they would be within the security
`net of a network. “We encrypt everything as it passes through our network and we only
`store encrypted files,” Campbell said. “They can have their own encryption running on
`top of that. We tend to be very secure because if you pick up a bit of it you never know
`what it is.”
`
`When it comes down to it though, what will pry that Blackberry out of users hands? “We
`are different because our system is designed to be disconnected. It works the same if it
`is connected or disconnected, you will never know the difference,” Campbell said. "It’s
`different from a Blackberry because your limited with attachments, we move the file
`once you don’t have to open up your laptop and download the file again.”
`
`“It is kind of a change in thinking. Everyone else says I can wireless ask a question and
`get my answer back,” Campbell noted. “With our system, the answer is already there
`because it’s continually being updated. It is a very easy concept. But, it entails a shift in
`most people, because most people are used to going out and getting what they want,
`when they want, versus it already being there for them.”
`
`Availability of the service is anticipated in the fourth quarter. “We are in the final beta
`testing right now. What you would do is go to a Best Buy or a carrier store and buy the
`device and take it to the office and put in a CD and it would run you through
`provisioning it. You tell it where to go and get your files and then it takes over all by
`itself,” Campbell said.
`
`Rosetta-Wireless is currently in discussions with a fulfillment company, as well as in
`contact with several wireless carriers. “We have had some initial discussions. We believe
`the service will be under $100 a month all-inclusive, that includes the equipment, all the
`airtime and all the other good things,” Campbell said.
`
`(Back To Top)
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