Fannie Mae Announces Results of Tender Offer for Any and All of Certain CAS Notes

Mizuho downgraded Fannie Mae (FNMA) and Freddie Mac (FMCC) to Neutral from Buy, citing delays in privatization and rising mortgage rates.

Regulators and lenders are now allowing VantageScore, a metric by Equifax, Experian, and TransUnion, for mortgage underwriting, challenging FICO's dominance. The FHFA, overseeing Fannie Mae and Freddie Mac, aims to lower mortgage costs and increase affordability. Fair Isaac's stock has fallen about 60% this year. Lenders like Rocket Mortgage and United Wholesale Mortgage are adopting VantageScore, potentially affecting mortgage rates and market dynamics.

Fannie Mae (FNMA) sold nonperforming loans totaling $260M, including 1,217 deeply delinquent loans. The sale also included its 29th Community Impact Pool, with 27 loans worth $5.7M in unpaid principal.

Fannie Mae and Freddie Mac reported August multifamily mortgage delinquencies. Freddie Mac's rate hit a 20-year high at 0.64%, up from 0.6% in July. Fannie Mae's rate fell to 0.57% from 0.62% in July. Rising delinquencies may reflect slowing rent growth and increased cost of living, according to Multifamily Dive and Urban Institute research.

FHFA director Bill Pulte directed Fannie Mae (FNMA) to align its servicing policy with Freddie Mac (FMCC), allowing servicers to proactively contact borrowers for mortgage insurance cancellation. FNMA shares dropped 9% and FMCC nearly 8% following the directive. Higher rates may lead to homeowner sell-offs or refinances, but a 2008-like crisis is not expected.

Federal Housing Finance Agency Director Bill Pulte ordered Fannie Mae and Freddie Mac to allow all lenders to use VantageScore, a move aimed at increasing competition in the credit scoring market. FICO, which has long dominated the market, saw its shares fall in April after the initial announcement. Pulte also criticized credit bureaus Equifax, Experian, and TransUnion for overcharging consumers.