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I am not doing the 3.6 FORM deal

alebrewer said:
You really don't understand the process do you, J? They aren't 'selling' the loans - they are still held by the GSE's (or Ginnie Mae, depending on what type of loan it is). The 'investors' (as you call them) own securities representative of the claims on the principal and interest from the pools. So no, most of the loans aren't 'sold off to investors'?

How can folks not know this stuff?... :)
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I just posted the same from AI -so what?
Appraisers are not on the GSE side; appraisers are on the valuation side. It is not necessary for us to know the technical details of how they bundle their loans into securities. However, since waiver/value acceptance has stripped a portion of appraisal work away, it is relevant wrt questions about reps and warranties (if anyone is interested ).

Have a nice day. I am not interested in spending my Sunday sparring in a duel - you need to have the last word, so please post and you can have it.
 
chad hampton said:
GSEs got a good gig going. They get to Privatize gains and socialize losses. We should have let them all go under.
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That's the big corporation way in America. Too big to fail.
 
Non Sequitur said:
I’m surprised one or more of the software providers don’t just license this app and integrate it.

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I am using AI to write more code. Experienced programmers can probably work 10+ times faster with AI. Right now, we have a strong pool of programmers/software engineers with decades of experience programming the old-fashioned way and an excellent understanding of software. - The question is whether they can pick up AI and live with it. Some probably won't be able to. I don't know. I do wonder why Amazon and so many other companies are laying off experienced software engineers. Maybe, perhaps, they just don't have any use for more software.

Anyway, experienced programmers who can write code in 6+ languages can make very, very good use of AI.

I am pretty sure the newer programmers coming out of universities who have been using Co-Pilot from the start will be limited and most will never attain the programming skill of the pre-AI software engineers.

So, I predict a plethora of software systems coming down the road. Many will be almost the same for sure. EVENTUALLY, MOST WILL NOT BE MARKETABLE - THEY WILL BE OPEN-SOURCED. In fact, that is already happening.

Appraisers and other professionals who can learn enough about computers and software to use open-source software will have an advantage. What will be saleable to software engineers is their time to help other professionals set up and run open-source software, as well as other training, courses, and books. It can go in many directions.

The other prediction is that this software will become complex as hell - because you have AI constantly jumping in and adding more functionality.

Yes, the software will basically be free, but so complex to use that you will need training, advice, and maintenance help - at times.

A good computer nowadays is Mac Studio M2 Ultra, maybe even a mini-Mac M4 Pro. I asked ChatGPT about upgrading my M2 Ultra to an M3 or M5 Ultra with max memory and GPUs. It pooed on the idea, saying what was important was bandwidth which it didn't think would improve with the newer models, and the best I could hope for was a slight increase in performance. It said if I really needed more power for AI, I would have to go to one of the more expensive Claude, ChatGPT or Grok plans, in particular the so-called API versions. Probably it will be Claude Max - if I really need it.

My experience is that the ollama deepseek-r1:14b model does an excellent job of making changes to my code. It also handles the tedious work of creating unit and other tests, checking in and out of GitHub, and so on. If I need to do something really complex, like mathematical reasoning, I can move up to the deepseek-r1:70b model, which runs fine on the M2 Ultra, but is a little on the slow side.

Nonetheless, I probably will buy the M5 Ultra when it comes out. I hope it has more than 512 GB of Unified Memory; 1+ Tb would be nice. And more memory bandwidth. We don't know the exact specs yet. But going from the M2 to the M5 is predicted to provide only a 30% increase in performance - we are starting to hit a performance wall.

BTW, existing software companies are going to be making very hefty profits, unless their prices come down. With AI, they can get by with far fewer programmers. So, know - you should expect prices to decrease!! Look and expect min 20% price reductions.
 
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Justinjla said:
Fannie Mae does not buy back loans.
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It's so confusing!! It appears somebody doesn't know what "Fannie Mae Buy-Back means."

Grok: "Yes, Fannie Mae does buy back loans, but it depends on the specific circumstances.
Fannie Mae (Federal National Mortgage Association) primarily purchases mortgages from lenders on the secondary market and securitizes them into mortgage-backed securities (MBS). However, under certain conditions, Fannie Mae requires or requests that the original lender (or servicer) repurchase the loan from Fannie Mae. This is commonly referred to as a "loan repurchase" or "repurchase demand."

Common Reasons Fannie Mae Demands a Loan Buyback (Repurchase):​

  1. Early Payment Default (EPD) – The borrower misses payments within the first few months after Fannie Mae purchased the loan (often within the first 4–6 payments).
  2. Underwriting Defects – Material misrepresentation, fraud, or violations of Fannie Mae’s Selling Guide (e.g., income, assets, or appraisal issues that would have made the loan ineligible).
  3. Non-compliance with Fannie Mae Guidelines – The loan didn’t meet eligibility or documentation requirements at the time of delivery.
  4. Servicing Breaches – Serious servicing errors that harm the borrower or investor.
  5. Life-of-Loan Exclusions – Certain violations (like fraud) can trigger repurchase demands years later, though most demands occur within the first 1–3 years.

Key Points:​

  • Fannie Mae does not routinely buy back loans from investors just because they go delinquent (normal credit risk is borne by MBS investors).
  • Repurchases are enforcement actions against the seller/servicer, not a voluntary buyback program.
  • The volume of repurchase demands has dropped significantly since the financial crisis due to better underwriting, representations and warranties (reps & warrants) relief, and the use of tools like Fannie Mae’s Loan Quality Initiative and Day 1 Certainty.

Recent Trend (2020s):​

After 2015–2020 reforms, Fannie Mae introduced a 36-month reps & warrants sunset for many loans (meaning if the loan performs for 36 months, most repurchase risk expires, except for egregious issues like fraud). This has dramatically reduced repurchase demands compared to the 2008–2014 period.

Summary:Fannie Mae itself does not typically "buy back" loans voluntarily, but it forces lenders to repurchase loans when serious defects are found. So yes — loans do get bought back from Fannie Mae’s portfolio, but it’s the lender doing the buying under pressure, not Fannie Mae voluntarily repurchasing.


Me: "How do you define the concept of "Fannie Mae buying back a loan"

The phrase “Fannie Mae buying back a loan” is commonly used in the mortgage industry, but it is technically a misnomer — it is the reverse of what actually happens.

Accurate Definition (Industry Reality)​

  • Fannie Mae does NOT buy back the loan. (note: That is, in the literal sense)
  • Instead, Fannie Mae forces the original lender/seller (or current servicer) to repurchase the loan from Fannie Mae.
So the precise concept is: “Fannie Mae buying back a loan” = Fannie Mae making a repurchase demand that requires the selling lender to buy the loan back from Fannie Mae’s portfolio (or from the MBS trust that Fannie Mae guarantees).

Why the phrase is phrased that way (even though it’s backward)​

People say “Fannie Mae is buying the loan back” as shorthand because:
  • From the lender’s perspective, the loan is coming back onto their balance sheet.
  • In everyday conversation and even in some news articles, it’s described as “Fannie/Freddie bought back $X billion in loans” when they really mean “forced originators to repurchase $X billion.”

Correct Technical Terminology vs. Common Slang​


Common (slightly incorrect) phrasingTechnically accurate phrasing
Fannie Mae bought back the loanFannie Mae issued a repurchase demand; the lender repurchased the loan from Fannie Mae
Fannie Mae is forcing buybacksCorrect — this is the accurate way
$10 billion in Fannie Mae buybacks$10 billion in loans that lenders were required to repurchase from Fannie Mae

Bottom line – the real definition of the concept​


“Fannie Mae buying back a loan” means Fannie Mae has compelled the original lender (or current owner of the servicing rights) to repurchase a mortgage loan that Fannie Mae previously purchased, typically because of underwriting defects, early payment default, fraud, or material breaches of representations and warranties.

In practice, in the case of a repurchase by the lender, money flows from the lender to Fannie Mae (or the MBS trust), and ownership of the loan moves from Fannie Mae/investors back to the lender — the exact opposite of Fannie Mae “buying” anything.
 
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removed.
 
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