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Volume 14 - Number 25

December 12, 2014

FHFA Orders GSEs to Start Contributing to Trust Funds

Fannie Mae and Freddie Mac will send about $290 million to two federal trust funds next year following a controversial decision by the Federal Housing Finance Agency to reverse a 2008 decision by its former top official. It’s no surprise that FHFA Director Mel Watt, a former Democratic member of the House, decided to end the “temporary” ban on GSE contributions to the Housing Trust Fund and Capital Magnet Fund. The reaction to this week’s announcement was predictable as well: a leading House Republican railed against it, while community advocates praised it. The contribution formula calls for Fannie and Freddie to send amounts equal to 4.2 basis points of the principal balance of their new business to the funds. Based ...

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Poll

HUD has announced a 25 basis point cut in FHA premiums, which is slated to take effect in late January. Is your lending shop for or against a cut in FHA premiums?

For. It should help lending volumes.
Against. The private MI sector should take on this risk, not the government.
Too early to say.
I believe the new White House may scuttle the idea so it doesn’t matter.

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