FHFA
Browse articles from all of our Newsletters related to FHFA.
May 18, 2012 - Inside The GSEs
Fired Fannie Staffer to Press Lawsuit Despite Ruling
Fannie Mae received a leg up earlier this month in its defense against a former staffer’s wrongful termination lawsuit when a federal judge ruled that the GSE is not legally considered a government entity while under the conservatorship of its regulator, the Federal Housing Finance Agency. Caroline Herron, a former Fannie vice president who left in 2007 but returned as a consultant in 2009, filed suit against the GSE in June 2010. Herron claims she was wrongly fired for reporting what she said was Fannie’s mismanagement of the Obama administration’s housing rescue initiatives. According to papers filed in U.S. District Court for the District of Columbia, Herron sought to prove that Fannie was not a private company but an adjunct of the state while under FHFA conservatorship as part of her claim against Fannie. Herron asserted a Bivens claim, a claim under the First Amendment for private damages against federal officials for civil rights violations outside the purview of the Federal Tort Claims Act.
May 18, 2012 - Inside The GSEs
FHFA Issues Draft Strategic Plan for Public Comment
The Federal Housing Finance Agency is requesting public comment on its draft document Strategic Plan: Fiscal Years 2013-2017. The FHFA said it’s updating its plan in order to incorporate the strategic plan for conservatorships of Fannie Mae and Freddie Mac that the Finance Agency sent to Congress in February.
May 18, 2012 - Inside The GSEs
FHFA Bank MBS Lawsuits Survive Dismissal Motion
Look for the Federal Housing Finance Agency to press its multiple legal actions against many of the nation’s biggest issuers of non-agency mortgage-backed securities after a federal judge rejected a bid by UBS Americas to turn back the FHFA’s lawsuit over its sale of non-agency MBS to Fannie Mae and Freddie Mac. Judge Denise Cote, of the U.S. District Court for the Southern District of New York, two weeks ago denied UBS’ motion to dismiss on statute of limitations grounds, while dismissing the FHFA’s negligent misrepresentation claims. The FHFA, as GSE conservator, sued UBS in July 2011 alleging that billions of dollars of MBS purchased by Fannie and Freddie were based on offering documents that contained “materially false statements and omissions.”
May 18, 2012 - Inside The GSEs
FHFA Notes Modest Goals For REO-to-Rental Pilot
Investors will be able to bid on Fannie Mae real estate-owned single-family homes intended for rent “in the next few months” but the Federal Housing Finance Agency warns not to expect fire sale prices from its pilot program. FHFA Senior Associate Director for Housing and Regulatory Policy Meg Burns testified last week before a congressional field hearing that the agency is completing its review of investor applications and is on target to complete its first pilot transaction in the next few months. “The application process is comprehensive, rigorous and demanding, requiring exhaustive amounts of information and documentation from the applications and their business partners,” said Burns.
May 18, 2012 - Inside The GSEs
Obama Pushes Trio of Senate HARP Expansion Bills
The White House is backing a trio of Senate bills filed last week to expand the Home Affordable Refinance Program to an even wider circle of underwater borrowers as part of the Obama administration’s re-election “to-do list.” The Equity Rebuilding Act sponsored by Sen. Jeff Merkley, D-OR, would lower costs for some homeowners seeking to refinance through HARP. Under the bill, homeowners who are current on their mortgage seeking to refi into a 20-year loan term or shorter would have their closing costs covered by Fannie and Freddie. A second bill by Sen. Dianne Feinstein, D-CA, the Expanding Refinancing Opportunities Act of 2012, would create a $6 billion FHA fund to provide insurance for underwater homeowners who currently don’t have a federally backed loan. To pay for the FHA extension, Feinstein would extend by one year the temporary, 10-year, 10 basis point increase of the GSE guarantee fee that took effect April 1.
May 18, 2012 - Inside The GSEs
Freddie’s New CEO Busts FHFA New Salary ‘Cap’
Freddie Mac’s new chief executive is expected to have his work cut out for him when he takes possession of the company’s corner office starting next week, industry insiders say, as it remains to be seen how much of a change agent anyone serving as CEO under government conservatorship can be. Last week, Freddie’s board of directors announced, with Federal Housing Finance Agency consent, the appointment of Donald Layton as CEO and elected him a member of the board.
May 18, 2012 - Inside The GSEs
FHFA Sees a Future Role for FHLBanks
The “scalability” of the nation’s 12 Federal Home Loan Banks as well as their demonstrated ability to access global markets could play a significant role in their favor as policymakers ponder the future of the FHLBank System in a post-Fannie Mae and Freddie Mac housing market, the FHLBanks’ chief regulator told bank directors and executives last week. During a speech at the annual Federal Home Loan Banks Directors Conference in Washington, DC, Federal Housing Finance Agency Acting Director Edward DeMarco noted the banks already have strong relationships, including a cooperative ownership structure, with their nearly 8,000 front-line local lenders.
May 18, 2012 - Inside The GSEs
Fannie Profits, Freddie Loses in 1Q12
The two GSEs divulged not so wildly divergent earnings during the first quarter of 2012. Fannie Mae posted its first free-and-clear profit since being drafted into government conservatorship some 3½ years ago while Freddie’s positive net income wasn’t enough to honor its dividend obligation and it was forced to ask taxpayers for further fiscal life-support. One year after it posted a $6.5 billion net loss, Fannie reported $2.7 billion net income during the first quarter, following to a net loss of $2.4 billion in the fourth quarter of 2011. Freddie actually reported net income in the first quarter and the fourth quarter, $577 million and $619 million respectively, but not enough to repay $1.8 billion in preferred stock dividends for the first three months of 2012.
May 18, 2012 - Inside MBS & ABS
As Investors Enter REO-to-Rental Bidding Process, S&P Suggests Consideration of REO Securitization
Converting real estate owned properties to rental units is still in its infancy but it could be a compelling asset type for investors. If securitized, it could provide a much-needed boost to the real estate market, according to Standard & Poor’s. In a recent analysis, S&P suggested taking the government’s REO-to-rent pilot program a step further and consider securitizing the rental streams from a pool of underlying REO assets, which could potentially provide a steady cash flow to back securitization transactions. Proceeds from the eventual sale of the properties could also be incorporated into the cash...
May 18, 2012 - Inside MBS & ABS
Can Risk-Transfer Products Attract Private Capital Back to U.S. Residential Mortgages?
The government overseer of Fannie Mae and Freddie Mac wants to help trim the footprint of the two government-sponsored enterprises by selling credit risk to private investors, but a top public policy analyst questions how effective such efforts will be in bringing private capital back to residential mortgage markets. “The basic business model of credit-risk insurance doesn’t just make sense,” said Karen Shaw Petrou, managing partner at Federal Financial Analytics, a think-tank in Washington, DC. “Because of the damage done in the run-up to the crisis, traditional insurers are at great risk of being...
May 17, 2012 - Inside Mortgage Finance
Fannie, Freddie Report First Quarter REO Inventory Decline; FHFA Lowers Expectations on Rental Pilot
A decline in Fannie Mae’s inventory of single-family real estate owned homes coupled with improved REO sale prices played a significant role in the company’s first free-and-clear profit since going into government conservatorship. Freddie Mac also reported improved REO disposition activity during the first quarter of 2012. Fannie said it acquired 47,700 single-family properties during the first quarter compared to 47,256 in the fourth quarter of 2011 and 53,549 in the first quarter of 2011. The government-sponsored enterprise disposed of 52,071 single-family REO during the first three months of 2012...
May 17, 2012 - Mortgage Beat
Freddie Hires a New Chief Executive Officer and Other Things Affecting the GSEs
For this week’s issue of Inside The GSEs, we will field insider reactions to last week’s selection of former E*Trade CEO Donald Layton as Freddie Mac’s new chief executive, capping a nearly six-month search process. Layton replaces outgoing CEO Charles Haldeman, who came...
May 11, 2012 - Inside FHA Lending
Beware of Conflicting FHA Rules, Standards
Mortgage servicers could find themselves in a quandary as they implement the national servicing standards outlined in the March foreclosure settlement agreement, especially if they run into conflicting FHA requirements. Compliance experts say that while many of the settlement standards could be carried out within the FHA program without being at odds with existing FHA requirements, conflicts do exist with the guidelines that cannot be resolved. Even when it is technically possible to comply with both FHA guidelines and the settlement standards, it is still going to ...
May 11, 2012 - Inside Nonconforming Markets
The Federal Housing Finance Agency’s non-agency mortgage-backed security repurchase claims against UBS can proceed, according to a ruling last week by U.S. District Judge Denise Cote in Manhattan federal court. The decision could also be applied to the other 16 lawsuits the FHFA filed against non-agency MBS issuers. Among other issues, the ruling refuted claims ... [Includes two briefs]
May 11, 2012 - Inside MBS & ABS
GSEs Continue Shedding MBS Under Plan To Shrink Retained Mortgage Investments
The retained mortgage investment portfolios of Fannie Mae and Freddie Mac have been reliable generators of net income over the past few years, but the government-sponsored enterprises continue to shrink the profit centers under the terms of their federal bailout. Fannie and Freddie held a combined $1.310 trillion in mortgage-related investments at the end of the first quarter of 2012, down 3.8 percent from the previous quarter. The GSEs’ combined portfolios were down 9.6 percent from the same period in 2011; their agreements with the Treasury Department call for annual...(Includes one data chart)
May 11, 2012 - Inside MBS & ABS
The massive legal action initiated by the Federal Housing Finance Agency last summer against many of the nation’s biggest lenders has survived its first legal challenge relatively unscathed following a federal judge’s rejection of the defendant’s motion to dismiss. Judge Denise Cote of the U.S. District Court for the Southern District of New York last week denied UBS Americas’ motion to dismiss on statute of limitations grounds. The ruling permits the FHFA to proceed full steam ahead with its claim that UBS violated federal securities laws by misleading Fannie Mae and Freddie Mac into purchasing $6.4...
May 10, 2012 - Mortgage Beat
Federal Court Finds Fannie Not a Government Entity in Firing Lawsuit
Fannie Mae received a leg up last week in its defense against a former staffer’s wrongful termination lawsuit when a federal judge ruled that the GSE is not legally considered a government entity while under the conservatorship of its regulator, the Federal Housing Finance Agency...
May 4, 2012 - Inside The GSEs
Illinois Bill Would Replicate Chicago Property Law
Inspired by a law currently on the books and in dispute in Chicago, state lawmakers in Illinois have filed a vacant property registration law requiring mortgage holders to keep up homes in foreclosure or face costly fines. The bill, SB 16, outlines a framework for municipalities to pass vacant property ordinances requiring mortgage holders to register a property that has been vacant for more than 30 days and to re-register the property every six months. The mortgage holder would also be required to secure and maintain the property, with fines ranging from $500 to $1,000 per day if the requirements are not met.
May 4, 2012 - Inside The GSEs
White House GSE Reform Plan Won’t Materialize ‘Anytime Soon’
Don’t expect the long-awaited White House plan to wind down Fannie Mae and Freddie Mac “anytime soon,” an Obama administration official told lawmakers last week. Housing and Urban Development Secretary Shaun Donovan told members of the Senate Banking, Housing and Urban Affairs Committee that the administration has made “significant” strides toward bringing private capital back into the housing market without help from Congress. However, the GSE overhaul promised for the first of the year needs more work, he said.
May 4, 2012 - Inside The GSEs
Freddie Dividends Turn Black to Red in 1Q
Dividend payments paid by Freddie Mac to the U.S. Treasury for its continued financial support held down the GSE during the first quarter of 2012 as Freddie would have otherwise posted a profit. Freddie, which posted its first quarter results late this week, actually reported $577 million in net income during the first three months of this year before having to repay $1.8 billion in preferred stock dividends to the government. Under the terms of the GSEs’ purchase agreement, the Treasury is entitled to a dividend of 10 percent per year on a quarterly basis. Freddie’s first quarter dividend payment more than offset the company’s comprehensive income of $1.79 billion, prompting the GSE to seek another $19 million from taxpayers.
May 4, 2012 - Inside The GSEs
FHFA Feud Over GSE Writedowns Intensifies
The Federal Housing Finance Agency is still mulling over accepting principal reduction payments from the Treasury Department even as the debate between the factions for and against GSE loan writedowns is quickly dissolving into a partisan food fight. This week, two ranking House Republicans urged FHFA Acting Director Edward DeMarco to stand fast against mounting political pressure directed at him by the Congressional allies of the Obama administration as House Democrats took the gloves off, accusing the Finance Agency of falsely withholding pertinent information about the agency’s principal reduction analysis.
May 3, 2012 - Inside Mortgage Finance
The ongoing feud between Congressional Democrats and the Federal Housing Finance Agency appeared to boil over this week as the FHFA’s head answered back to charges that he’s been holding back pertinent information about the agency’s analysis of principal reductions. In a May 1 public letter to FHFA Acting Director Edward DeMarco, Reps. Elijah Cummings, D-MD, and John Tierney, D-MA, accused the agency head of playing fast and loose with the facts regarding a previously unreported 2010 Fannie Mae pilot program to forgive a borrower’s mortgage debt, as well as the facts buttressing the FHFA’s position...
April 30, 2012 - Mortgage Beat
FHFA Postpones Principal Reduction Decision
As April draws to a close, many were expecting the Federal Housing Finance Agency’s verdict on principal reductions, though the agency has chosen to blow its self-imposed deadline. Last Friday, the FHFA announced that it is still working on its principal forgiveness...
April 27, 2012 - Inside Nonconforming Markets
Non-Agency Short Sales Increase; Shorter Timelines
Short sales on mortgages included in non-agency mortgage-backed securities have increased sharply in the past year, as a percentage of total distress property dispositions, according to analysts at Deutsche Bank Securities. The loss mitigation technique is seen as beneficial for borrowers, portfolio servicers and non-agency MBS investors, especially compared with foreclosure costs and timelines. “Short sales typically result in faster resolution and significantly higher principal recovery,” the analysts said. Short sales accounted for about ...
April 27, 2012 - Inside MBS & ABS
HARP 2.0 Lenders Hold 125 LTV Loans While Awaiting Securitization Option
Although Fannie Mae and Freddie Mac have begun buying the latest generation of Home Affordable Refinance Program mortgages with loan-to-value ratios exceeding 125 percent, a number of lenders are holding these loans in the pipeline until the government-sponsored enterprises open the spigot on securitization options for these loans. According to the Federal Housing Finance Agency, Fannie and Freddie purchased 1,548 of the high LTV HARP loans in February. FHFA Senior Associate Director Meg Burns said during an Inside Mortgage Finance webinar this week that a similar volume of 125+ LTV loans were...
April 26, 2012 - Mortgage Beat
FHFA REO Pilot Extension Deadline Extended?
Overwhelmed by as many as 400 private bidders vying to participate, the Federal Housing Finance Agency has reportedly extended the deadline for bids by one month. A HousingWire article recently reported that investors will now have until May to bid on the 2,490 foreclosed...
April 20, 2012 - Inside The GSEs
GSEs Pay Chicago Fee ‘Under Protest’
Fannie Mae and Freddie Mac have reluctantly directed their servicers to begin making payments next month in compliance with Chicago’s vacant property ordinance “under protest” as the GSEs’ conservator continues to fight the local legislation in court. Starting May 1, Fannie servicers will be required to include a written protest along with the ordinance’s $500 registration fee, according to a letter to servicers issued earlier this month. “All payments made to the city of Chicago, including vacant property registration payments, must be made ‘under protest’ by sending a written communication to the city with the registration fee,” explained Fannie. “This written communication must note that the Federal Housing Finance Agency determined that the registration fee does not apply to Fannie Mae, and that the registration fee is therefore paid under protest.”
April 20, 2012 - Inside The GSEs
Senator Asks FHFA For ‘Clear’ GSE Repurchase Process
The Federal Housing Finance Agency should give consideration to creating a mechanism to allow small mortgage lenders to more easily appeal GSE repurchase demands, according to one U.S. senator.In a letter sent last week to FHFA Acting Director Edward DeMarco, Sen. Jeanne Shaheen, D-NH, said several of her small-business constituents have noted a “sharp increase” in repurchase demands over the last year.
April 20, 2012 - Inside The GSEs
MBA Asks Fannie to Delay ‘Force-Placed’ Deadline
The Mortgage Bankers Association has asked Fannie Mae to push back its June 1 implementation deadline of the GSE’s new requirements for lender “force-placed” insurance policies to allow time for the creation of a “workable timeline” for compliance. Last month, Fannie announced it would implement changes to its Lender-Placed Insurance requirements by overseeing the force-placed polices itself instead of allowing banks and other financial institutions to do so.
April 20, 2012 - Inside The GSEs
Increase In HARP 2.0 Applications Boosts Banks’ Short-Term Income
Lenders should expect at least a short-term boost in profits from the Federal Housing Finance Agency’s recent tweaks to the Home Affordable Refinance Program, analysts say as the industry’s largest lenders have seen a big increase in new refinance applications for HARP 2.0. In its first-quarter earnings report issued last week, Chase cited the impact of HARP in part for generating $1.6 billion in mortgage production revenue, an 80 percent increase from a year earlier. Likewise, Wells reported first-quarter mortgage originations to be up $9 billion from the fourth quarter of 2011, with 15 percent of originations credited to HARP, while application volumes rose 20 percent during the same period.
April 20, 2012 - Inside Mortgage Trends
Lenders Fear Strategic Defaults in 2012
Almost half of lenders believe that strategic defaults will increase in 2012, a specter that continues to affect national housing policy. There are no reliable data regarding strategic defaults in the U.S., considering the secrecy inherent in the act. That has forced policymakers to make dollars-and-cents decisions based on conjecture about borrower behavior. A new FICO survey found that 46 percent of bank risk professionals expect the number of strategic defaults in 2012 to surpass those in 2011. Survey participants had a generally pessimistic view of homeowners’ regard for their mortgage...
April 20, 2012 - Inside The GSEs
FHFA: GSEs Draw Less From Taxpayers Than Projected
Fannie Mae and Freddie Mac’s combined cash infusion from taxpayers during the latter half of 2011 came in significantly below estimates forecast by the GSEs’ conservator, according to a new report. The Federal Housing Finance Agency’s fourth-quarter conservatorship report noted that Fannie and Freddie’s actual combined draw during the second half of last year was $19 billion, some $10 billion below the Finance Agency’s most optimistic projections issued last fall. In October, the FHFA circulated its updated projections of the financial performance of the GSEs, including potential draws under the Senior Preferred Stock Purchase Agreements with the Treasury Department.
April 20, 2012 - Inside The GSEs
FHFA Rolls Out New GSE Short Sale Timeline
Fannie Mae and Freddie Mac’s mortgage servicers will soon be required to review and respond to short sale requests within 30 days of an offer on the property and to provide weekly status updates if the offer is still under review after that, under new standards issued this week by the Federal Housing Finance Agency. Under the new guidance, effective June 15, servicers will have to make a final decision within 60 days of receiving an offer on a short sale property. The FHFA said the change is an attempt to hasten the traditionally time-consuming and difficult primary alternative to foreclosure.
April 20, 2012 - Inside The GSEs
FHFA Revises Categories for Examination Findings
The Federal Housing Finance Agency has revised and consolidated its categories for safety and soundness and Affordable Housing Program examination findings pertaining to Fannie Mae, Freddie Mac and the Federal Home Loan Banks, the FHFA announced in a recent advisory bulletin. Examination findings are deficiencies related to risk management, risk exposure, or violations of laws, regulations or orders that affect the performance or condition of a regulated entity, according to the FHFA.
April 20, 2012 - Inside The GSEs
Chicago FHLB Cease-and-Desist Order Lifted
Four and a half years after it was placed on a form of probation, the Federal Home Loan Bank of Chicago was officially released from its consent cease-and-desist order by the Federal Housing Finance Agency this week. FHFA Acting Director Edward DeMarco said the Finance Agency terminated the order because of improvements in the Bank’s financial condition and capital position, resolution of the agency’s risk management concerns and consideration of “specific comments and assurances made by the FHLBank’s board of directors to FHFA.”
April 20, 2012 - Inside The GSEs
GSE Writedown Foes Bolster Wavering FHFA
After months of hearing Congressional Democrats and White House allies suck up the public debate oxygen in favor of GSE principal reduction, mortgage writedown opponents are speaking up as the Federal Housing Finance Agency looks to be reconsidering its stand against loan forgiveness. Industry groups are expressing with greater volume their concern that principal forgiveness on loans guaranteed by Fannie Mae and Freddie Mac would ultimately hurt the housing market.
April 19, 2012 - Inside Mortgage Finance
Fannie, Freddie Continue to Take a Beating From Single-Family Credit Guarantees During 4Q 2011
Losses from Fannie Mae and Freddie Mac’s single-family credit guarantee business declined in 2011, but remained high primarily due to credit-related expenses, notably the provision for credit losses, according to the Federal Housing Finance Agency. The FHFA’s fourth-quarter conservatorship report noted that the two government-sponsored enterprises’ combined revenues for single-family credit guarantees of $11 billion last year was more than offset by $40 billion in credit-related expenses. “Credit-related expenses continue to drive the single-family credit guarantee segment for the enterprises,” said...
April 19, 2012 - Mortgage Beat
FHLBank of Chicago Freed From Cease and Desist Order and Other Things Affecting the GSEs
For this week’s issue of Inside The GSEs, we will delve into the Federal Housing Finance Agency’s decision this week to terminate its cease and desist order against the Federal Home Loan Bank of Chicago because the Bank has improved its financial condition. “The Chicago FHLBank’s...
April 17, 2012 - Mortgage Beat
Report: Borrower Assistance Program Limited by GSEs, Servicers, Treasury
The Treasury Department’s $7.6 billion Hardest Hit Fund is all carrot and no stick, according to a housing finance agency official in Florida. The HHF announced in February 2010 includes $1.5 billion in federal funds allocated for principal reductions and second-lien reductions...
April 12, 2012 - Inside Mortgage Finance
DeMarco Opens Door to GSE Writedowns, But Strategic Default Remains Key Concern
The Federal Housing Finance Agency has concluded that accepting incentive payments from the U.S. Treasury for writing down loan balances on certain Fannie Mae and Freddie Mac mortgages could end up saving taxpayers money, but the agency is not ready to make the controversial change in policy for the two government-sponsored enterprises. What’s holding the FHFA back is the unresolved concern that forgiving principal on GSE loans will encourage unknown numbers of underwater Fannie and Freddie borrowers to deliberately stop making payments or claim hardships so they can get their debt reduced. A...
April 12, 2012 - Mortgage Beat
MBA Asks Sen. Franken To Modify GSE Repurchase Bill
The Mortgage Bankers Association has weighed in on an obscure bill recently filed in the Senate that would require the Federal Housing Finance Agency to prohibit Fannie Mae or Freddie Mac from any “possessory interest that could substantially reduce the financial...
Webinars
Mortgage Beat
Industry Reports
Poll
Most Popular Stories
- Ocwen Officials Surprised by Nationstar Bids
- Flurry of Deals Scrambles Top Servicer Ranking In Early 2012, Nationstar to be Fourth Largest
- CFPB Taking on Origination Points and Fees
- Mortgage Originations Slow Modestly in Rapidly Changing Market of Early 2012
- Freddie Hires a New Chief Executive Officer and Other Things Affecting the GSEs
