FHFA

Browse articles from all of our Newsletters related to FHFA.

October 17, 2014 - Inside The GSEs

Enterprise Endnotes

IG Recommends FHFA Upgrade Its Recordkeeping. The Federal Housing Finance Agency is in compliance with its recordkeeping procedures but the policy and infrastructure of its records management could do with an upgrade, concluded an evaluation by FHFA’s Inspector General last week. The IG said that the Finance Agency’s Division of Enterprise Regulation’s recordkeeping practices “have limitations that impede the efficient retrieval” of examination workpapers by agency staff and by IG auditors.


October 17, 2014 - Inside The GSEs

FHFA-IG Among Growing List of Agencies Employing Armed Agents

The Inspector General of the Federal Housing Finance Agency is among a growing list of official government watchdog agencies authorized to employ armed investigators when ferreting out waste, fraud and abuse, according to a recent report. The report issued by the Congressional Research Service listed some three dozen IGs that possess law enforcement authority, which legally empowers them to make arrests, seek warrants and carry firearms.


October 17, 2014 - Inside The GSEs

FHFA: FHLBank Affordable Housing Contributions Up 57 Percent in ‘13

The 12 Federal Home Loan Banks contributed some $300 million to affordable housing in 2013, according to a report by the Federal Housing Finance Agency. The report, issued last week, is part of the FHFA’s mandate to monitor and report annually on the FHLBanks’ support of their low-income housing and community development activities. In 2013, the Banks contributed approximately $297 million to the Affordable Housing Program, equal to 10 percent of their net earnings for the preceding year and up approximately 57 percent from 2012, noted the FHFA.


October 17, 2014 - Inside The GSEs

UI Dings IG Audit of FHFA Rep-and-Warrant Framework as ‘Incomplete’

In an unusual move, a Washington, DC, think tank has publicly taken to task the official watchdog of the Federal Housing Finance Agency, finding a recent audit of the FHFA’s representation-and-warranty policy “incomplete.” The September report by the FHFA’s Inspector General concluded that the Finance Agency’s implementation of the rep-and-warrant framework was premature and resulted in “significant and unresolved operational risks” to Fannie Mae and Freddie Mac. An analysis by the Urban Institute found that the OIG’s conclusions were “incomplete and overstate the risk of the plan.”


October 17, 2014 - Inside The GSEs

Moody’s: FHFA Shouldn’t Increase Fannie, Freddie Guaranty Fees

The Federal Housing Finance Agency “should not appreciably change” guaranty fees charged by Fannie Mae and Freddie Mac, according to a new paper by Moody’s Analytics. The paper, “A General Theory of G-Fees,” by Mark Zandi, chief economist at Moody’s Analytics, and Cristian deRitis, a senior director of consumer credit analytics, noted that the two GSEs are currently charging an average g-fee of approximately 60 basis points across all new loans they insure.


October 17, 2014 - Inside The GSEs

FHFA Proposed Rule Would Define FHLBank ‘Former Member’

A proposed Federal Housing Finance Agency rule would define a Federal Home Loan Bank “former member” as an institution whose membership has been terminated but which must still maintain FHLBank stock. Published in the Oct. 8 Federal Register, the proposal’s definition would apply to institutions whose membership has ended but which continue to hold stock in the FHLBank as required by the Bank’s capital plan. …


October 17, 2014 - Inside The GSEs

GSE’s Common Securitization Solutions Still Has No CEO

After a year of searching for a chief executive to lead Common Securitization Solutions, the Federal Housing Finance Agency is still looking, but it continues to hire staff. “The search continues,” said a government official close to the matter. “We even have a search firm.”Although the FHFA is keeping a tight lid on information regarding CSS, it’s now common knowledge that the search firm in question is the Washington-based Spencer Stuart, which bills itself as “one of the world’s leading global executive search and leadership consulting firms.”


October 17, 2014 - Inside The GSEs

Lenders Want Speed, Street Urges Caution on GSE Single Security

The Federal Housing Finance Agency’s proposed single security for the GSEs met with conflicting views as the comment period ended this week. In August, the FHFA proposed a single-security structure to allow Fannie Mae and Freddie Mac to issue a common MBS to serve the single-family market. The proposal is aimed at eliminating Freddie’s pricing disadvantage and improving liquidity in the to-be-announced market.


October 17, 2014 - Inside The GSEs

Judge Denies Former Fannie CFO Discovery Access in GSE Lawsuit

GSE shareholder advocates remain undeterred following a federal judge’s decision late this week to deny a former Fannie Mae executive access to confidential evidence unearthed as part of the discovery process in an investors’ lawsuit against the government. Earlier this year, Fairholme Funds hired former Fannie Chief Financial Officer Timothy Howard as a consultant to assist its law firm Coopers and Kirk. Lawyers for the government want to deny Howard access to some 800,000 pieces of discovery in investors’ litigation challenging Uncle Sam’s “net-worth sweep” of GSE profits.


October 17, 2014 - Inside MBS & ABS

GAO: U.S. Housing Finance in Need of Reform; Clarity Required on FHFA’s Guaranty Fee Stance

The substantial increase in federal support of the single-family housing finance system, as well as weaknesses uncovered in the wake of the mortgage market meltdown, have led to a U.S. finance system that warrants reform, according to the Government Accountability Office. The GAO focused considerable attention on the much-reported fact that government programs have accounted for a huge share of the mortgage and MBS market since the financial crisis. The congressional watchdog views the federal role in housing finance as a “high-risk area.” “Developments in mortgage markets since 2000 have challenged...


October 17, 2014 - Inside MBS & ABS

Wall Street Urges Caution on GSE Single Security; Lenders Say Full Speed Ahead

Waiting several years to unify Fannie Mae and Freddie Mac securities into a single MBS could pose a huge risk to its successful completion, warned the mortgage banking industry, but Wall Street thinks it’s worth the wait to get market participants totally behind the move. The Federal Housing Finance Agency’s proposed single security for the government-sponsored enterprises met with conflicting views as the comment period ended this week. The proposal is aimed at eliminating Freddie’s pricing disadvantage and improving liquidity in the to-be-announced market. The Securities Industry and Financial Markets Association urged...


October 10, 2014 - Inside MBS & ABS

Expert: Recapitalize Fannie and Freddie by Ending Government’s Profit Sweep and Draining Portfolios

Ending the conservatorships of the government-sponsored enterprises and recapitalizing Fannie Mae and Freddie Mac is the “most pragmatic and feasible” solution to facilitate housing finance reform and protect taxpayers, according to a recently issued white paper. In his blueprint for ending GSE conservatorship, Clifford Rossi – adjunct professor at the Robert H. Smith School of Business, University of Maryland, College Park – calls for an administrative solution by recapitalizing Fannie and Freddie and bringing the GSEs out of conservatorship under strict conditions as the next best way of implementing housing finance reform short of legislation. “Conservatorship was...


October 9, 2014 - Inside Mortgage Finance

Advocates Press FHFA Director Watt to Finance Housing Trust Fund After Lawsuit is Dismissed

Affordable housing advocates are continuing their full-court press against the head of the Federal Housing Finance Agency, demanding that the FHFA greenlight financing for the dormant National Housing Trust Fund after a setback in federal court. U.S. District Court Judge Marcia Cooke of the Southern District of Florida last week dismissed a lawsuit brought by the National Low Income Housing Coalition on the grounds that the NLIHC lacks standing to sue the FHFA. Cooke also found that the court does not have jurisdiction over the decisions of the agency. The coalition filed...


October 9, 2014 - Inside Mortgage Finance

Expert Calls Dismissal of GSE Shareholder Lawsuit ‘Misguided,’ Discovery Best Bet for Plaintiffs Now

Shareholders are appealing a federal judge’s decision last week to toss out their legal challenge to the federal government’s siphoning off of Fannie Mae and Freddie Mac profits, and a legal expert says they could be helped out by what comes out in discovery in other investor lawsuits. Speaking during a conference call sponsored by Investors Unite, New York School of Law Professor Richard Epstein – who does not own stock in the government-sponsored enterprises – blasted the “misguided” ruling by Judge Royce Lamberth of the U.S. District Court for the District of Columbia. He characterized it as an overly generous interpretation of the Housing and Economic Recovery Act of 2008 in favor of the Treasury Department and the Federal Housing Finance Agency. “Although the government claimed to be looking out for the shareholders, it ended up...


October 3, 2014 - Inside Mortgage Trends

FHFA Weighs Impact of Second Liens

Although linked to higher likelihood of defaults for first mortgages, piggyback second liens do not necessarily mean bad results for the associated primary loan. However, subsequent second liens have had mixed results over certain time periods. “The empirical results for subsequent second liens are much more nuanced and, in many ways, more interesting than the piggyback results,” concludes Andrew Leventis, principal economist at the Federal Housing Finance Agency ...


October 3, 2014 - Inside The GSEs

Enterprise Endnotes

FHFA Principal Reduction Pilot Program. A bill filed by Sen. Robert Menendez, D-NJ, before Congress left town last month would create a shared-appreciation mortgage program in which banks would reduce the mortgage principal for eligible underwater homeowners. Under the Preserving American Homeownership Act, S. 2854, the pilot programs – to be established by the Federal Housing Finance Agency and the FHA – would entitle banks to a portion of the increased value of the home when the market improves.


October 3, 2014 - Inside The GSEs

IG Calls for Closer FHFA Oversight Of Freddie Mac’s IT Investments

The Federal Housing Finance Agency can and should improve its oversight of Freddie Mac information technology investments, concluded a new audit by the agency’s official watchdog. Last week’s Inspector General audit noted that Freddie is making “substantial investments” in IT in order to better support its operations and reduce risk. The GSE’s planned IT expenditures over three years are expected to exceed $1 billion, the IG added.


October 3, 2014 - Inside The GSEs

FHFA Official: Congress Should Take Point on Shrinking GSEs

Efforts to reduce the government-sponsored enterprises’ footprint using guaranty fees and loan limits should be left to Congress, according to Bob Ryan, a special advisor to the director of the Federal Housing Finance Agency. Meanwhile, officials at the Treasury Department suggest that the FHFA does have a role in setting policy that will inform any housing finance reform action by Congress.


October 3, 2014 - Inside The GSEs

FHFA Rejects Inspector General’s Call for Compliance Checks

The Federal Housing Finance Agency disagrees with its Inspector General’s recommendation that the FHFA direct Fannie Mae and Freddie Mac to assess the cost/benefit of requiring their sellers and servicers to provide independent, third-party confirmation on compliance with government-sponsored enterprise origination and servicing guidance. The IG audit, quietly issued late last week, noted that the Securities and Exchange Commission and the Department of Housing and Urban Development, as well as private mortgage-backed securities investors in the secondary mortgage market, require annual, independent assurance of counterparty compliance.


October 3, 2014 - Inside The GSEs

Judge Dismisses Lawsuit to Force FHFA to Pay into Housing Fund

A federal judge in Florida this week dismissed a lawsuit brought by the National Low Income Housing Coalition seeking to force Fannie Mae’s and Freddie Mac’s conservator to make good on the GSEs’ statutory obligations to contribute to the National Housing Trust Fund. In the summer of 2013, the National Low Income Housing Coalition filed suit arguing that since the GSEs returned to profitability in 2012, the Federal Housing Finance Agency should have directed Fannie and Freddie to begin to pay up.


October 3, 2014 - Inside The GSEs

Paper: Administrative GSE Reform Next Best Thing to Congress Acting

After six years of government control of the GSEs, Congressional inaction has ensured no legislative solution to housing finance reform anytime soon so the administration must take action, according to a white paper unveiled this week. Clifford Rossi, adjunct professor at the Robert H. Smith School of Business, University of Maryland, College Park, told Inside The GSEs that a legislative fix to GSE reform is the ideal solution.


October 3, 2014 - Inside The GSEs

Des Moines, Seattle FHLBank Boards Approve Merger Plan

Industry observers expect that last week’s announced go-ahead to merge the Federal Home Loan Banks of Des Moines and Seattle will be a “one-off” as the remaining 10 FHLBanks are still in sound enough financial shape. Talk of a proposed merger between the FHLBank of Des Moines and the smaller, troubled FHLBank of Seattle was first made public in July and approved unanimously by both Bank boards last week.


October 3, 2014 - Inside The GSEs

GSE Shareholders Persist After Judge Dismisses ‘Sweep’ Lawsuit

Attorneys for disenfranchised GSE shareholders have already filed a notice to appeal this week’s surprise dismissal by a Washington, DC, federal judge of the lawsuits challenging the Treasury Department’s 2012 “net-worth sweep” of nearly all profits generated by Fannie Mae and Freddie Mac. However, a legal expert notes that the ruling by Judge Royce Lamberth of the U.S. District Court for the District of Columbia makes a tall order even taller for investors taking on the government.


October 3, 2014 - Inside MBS & ABS

Industry Expresses Caution on G-Fee Proposal; More Needed to Revive Non-Agency Participation

Industry experts vary on the question of whether Fannie Mae and Freddie Mac should change their MBS guaranty pricing, but most agree that the Federal Housing Finance Agency should proceed cautiously and deliberately. At the same time, most industry comment letters on the subject agree that more needs to be done to revive the non-agency market. The Securities Industry and Financial Markets Association warned...


October 3, 2014 - Inside MBS & ABS

Opponent Bows Out of BofA Settlement Dispute, S&P Seeks Treasury Documents for Defense

Bank of America’s long-troubled multi-billion-dollar settlement with non-agency MBS investors moved a big step closer to final approval after a key opponent of the deal withdrew its objection this week, though numerous other objectors remain. The Triaxx entities withdrew as intervenor-respondents in the $8.5 billion Countrywide settlement covering 530 trusts. The objection by the Triaxx group had been seen as among the largest remaining roadblocks for final court approval since the $650 million settlement agreement between American International Group and BofA in July. BofA agreed...


October 2, 2014 - Inside Mortgage Finance

FHFA Disagrees With IG Call for Third-Party Reviews of Lender Compliance With Guidelines

The Federal Housing Finance Agency is not on board with its Inspector General’s recommendation that the agency direct Fannie Mae and Freddie Mac to assess the cost and benefit of requiring lenders to get independent, third-party confirmation of their compliance with government-sponsored enterprise origination and servicing guidance. The IG audit noted that the Securities and Exchange Commission and the Department of Housing and Urban Development, as well as private MBS investors in the secondary mortgage market, already require annual, independent assurance of counterparty compliance. “The annual assertions and audits have helped...


October 2, 2014 - Inside Mortgage Finance

Federal Judge Shuts Down GSE Shareholder Lawsuit, Upholds Government Authority to Sweep GSE Profits

In a surprise ruling this week, a federal judge in Washington, DC, dismissed claims by Fannie Mae and Freddie Mac shareholders challenging the Treasury Department’s 2012 “net-worth sweep” of nearly all the profits generated by the government-sponsored enterprises. Judge Royce Lamberth of the U.S. District Court for the District of Columbia ruled that Treasury and the Federal Housing Finance Agency are empowered by the Housing and Economic Recovery Act of 2008 to execute the “third amendment” of the preferred stock purchase agreement. The dismissal includes...


October 2, 2014 - Inside Mortgage Finance

Nonbank ‘Working Group’ Represents Substantial Market Share, Wants Voice on Key Regulatory Issues

Several large nonbank lenders have banded together to form what they call a “working group” to address key regulatory issues that they say are stifling their growth and future prospects for success in a rapidly changing mortgage industry. The group’s members – including Ocwen Financial – will initially strive to educate and inform regulators about nonbanks, but will not lobby Congress. Members of the group stress that the nonbank collective is not a trade organization and does not seek that status. For now, Ocwen is...


September 26, 2014 - Inside Nonconforming Markets

Obama Administration Seeks Non-Agency Changes

A number of steps have been taken to reform the non-agency mortgage-backed security market but more changes are necessary, according to Michael Stegman, counselor on housing finance policy to the Treasury Department. Last week at a conference hosted by the Bipartisan Policy Center, Stegman detailed regulatory changes necessary to increase activity in the non-agency MBS market along with other changes the industry can work toward. “The last remaining piece of the puzzle is putting in place ...


September 26, 2014 - Inside MBS & ABS

Industry Groups Urge FHFA to Move to Common Security, Focus on Loan Quality, Not Volume in Strategic Plan

The Federal Housing Finance Agency should direct Fannie Mae and Freddie Mac to move toward a common, fungible security while also striving to ensure the government-sponsored enterprises’ safety and soundness and promote liquidity and access to the secondary mortgage market, according to early feedback from industry groups. Last month, the FHFA issued a request for input regarding its strategic plan for fiscal years 2015 through 2019. The FHFA plan identifies three strategic goals for the GSEs: ensuring safe and sound regulated entities; ensuring liquidity, stability and access in housing finance; and managing Fannie’s and Freddie’s ongoing conservatorship. The Mortgage Bankers Association called on...


September 26, 2014 - Inside MBS & ABS

GSEs’ Risk-Sharing Activities Poised to Grow, Offer More Diverse Collateral and Structures

The government-sponsored enterprises plan to expand their risk-sharing activities in a number of ways in 2015, according to officials at the GSEs and the Federal Housing Finance Agency. Kevin Palmer, a vice president of strategic credit costing and structuring at Freddie Mac, said Freddie is set to include a broader group of mortgages in its risk-sharing transactions in an effort to increase the investor base. Fannie has similar plans. The GSEs have issued...


September 25, 2014 - Inside Mortgage Finance

GSE Shareholder Plaintiffs Demand Full Transparency From Treasury, FHFA Over Profit ‘Sweep’ Documents

Attorneys for a group of disenfranchised Fannie Mae and Freddie Mac junior shareholders have joined another shareholder group’s motion in federal court asking the government to come clean with all of the documents and records regarding the Treasury’s “Third Amendment” and “net-worth sweep” of nearly all government-sponsored enterprises’ profits. In papers filed last week in U.S. District Court for the District of Columbia, Perry Capital lead attorney Ted Olson asked to join Fairholme Fund’s request for “supplementation” of the record. Both plaintiffs contend the government has failed to provide for court review of the “whole record” as required under the Administrative Procedures Act. “The government is...


September 25, 2014 - Inside Mortgage Finance

Look for a Boom in Mortgage Servicing Sales as Lenders Try to ‘Make Their Numbers’ by Yearend

With loan originations beginning to taper off this fall and expected to continue that way through yearend, lenders of different stripes likely will step up their sales of mortgage servicing rights in an attempt to make earnings projections. “There’s a ton of activity out there now,” said Tom Piercy, managing member of Interactive Mortgage Advisors, Denver, an MSR advisory and brokerage firm. “We’re the busiest we’ve ever been all year.” Mark Garland, president of MountainView Servicing Group, concurs...


September 25, 2014 - Inside Mortgage Finance

FHFA Official: Congress Should Be Main Arbiter Of the GSEs’ Share of Mortgage Market Activity

Efforts to reduce the government-sponsored enterprises’ footprint using guaranty fees and loan limits should be left to Congress, according to Bob Ryan, a special advisor to the director of the Federal Housing Finance Agency. Meanwhile, officials at the Treasury Department suggest that the FHFA does have a role in setting policy that will inform any housing finance reform action by Congress. In comments this week at the ABS East conference produced by Information Management Network in Miami Beach, Ryan said the FHFA looks to Congress for direction when considering how to run the conservatorship of Fannie Mae and Freddie Mac. “There is nothing in the legislation that suggests the FHFA should shrink the footprint [of the GSEs],” he said. Ryan said...


September 19, 2014 - Inside The GSEs

FHLBank Agency MBS Investments Drop During Second Quarter 2014

Fannie Mae and Freddie Mac mortgage-backed securities remained the preferred investment choice of the 12 Federal Home Loan Banks during the second quarter of 2014, with a very slight decline from the previous quarter, according to a new analysis and ranking by Inside The GSEs based on data from the Federal Housing Finance Agency. Meanwhile, Ginnie Mae securities posted an increase within the FHLBank system during the three-month period ending June 30, 2014.


September 19, 2014 - Inside The GSEs

GSE MBS Business Activity Posts Overall Increase in August

Together, Fannie Mae and Freddie Mac in August posted a combined increase in the volume of single-family mortgages securitized, according to a new Inside The GSEs analysis. Fannie and Freddie issued $61.1 billion in single-family mortgage-backed securities in August, a 5.5 percent increase from July. However, August's MBS issuance was down 56.7 percent on a year-to-date basis.


September 19, 2014 - Inside The GSEs

Enterprise Endnotes

Experts Laud FHFA’s Plan for ‘Single Security,’ But Urge Quicker Arrival at Goal. The Federal Housing Finance Agency’s “single security” proposal for a generic Fannie Mae/Freddie Mac MBS is “well-thought out” and “worthy of serious consideration,” but the agency should pick up the pace in its implementation to avoid making the solution part of the problem, according to a paper from the Urban Institute. Lewis Ranieri, chairman of Ranieri Partners, and Laurie Goodman, director of the UI’s Housing Policy Center, expressed concern that the FHFA “may be contemplating a slower pace in the project than it warrants.”


September 19, 2014 - Inside The GSEs

CBO: Stalled Senate Housing Bill That Cuts GSEs Would Save $60B

The Senate’s housing finance reform bill would save the government some $60 billion over 10 years according to an analysis by the Congressional Budget Office, but don’t hold your breath waiting for the windfall, say critics. Earlier this month, the CBO issued its estimate, which concluded that replacing Fannie Mae and Freddie Mac with a new securitization program that couples a first-loss position for private capital with back-end government insurance could reduce “direct spending” by $60 billion over the 2015-2024 period.


September 19, 2014 - Inside The GSEs

Commenters Call on FHFA To Change PMIER Draft Rules

The Federal Housing Finance Agency’s proposed capital requirements for private mortgage insurers would raise costs for borrowers but there is a need for new standards, according to industry group comments. The Mortgage Bankers Association, National Association of Realtors and several private MI companies have urged the Federal Housing Finance Agency to ease proposed capital requirements for private MIs.


September 19, 2014 - Inside The GSEs

Industry Input Letters to FHFA Show Little Appetite for GSE G-Fee Hike

There is little enthusiasm in the mortgage market for higher guaranty fees charged by Fannie Mae and Freddie Mac, various industry groups indicated in input letters to the GSEs’ regulator. In June, the Federal Housing Finance Agency issued a call for public comment on how the GSEs should calculate g-fees and whether the FHFA should proceed with a 10 basis point g-fee hike announced last year. In one of his first acts as FHFA director in January, Mel Watt postponed the g-fee hike pending further study.


September 19, 2014 - Inside The GSEs

Group: FHFA’s Deal Will Allow MBS Defendant to Write Off Settlement

The Federal Housing Finance Agency’s most recent settlement of non-agency mortgage-backed securities lawsuit has one consumer group seeing red as it claims taxpayers will ultimately get stuck with the cost of the bank’s multi-million dollar payout. Late last week, the FHFA announced a $550 million legal deal with HSBC North American Holdings, leaving just two civil cases tied to nonprime MBS issuance still unresolved.


September 19, 2014 - Inside The GSEs

DeMarco: Continued Delay of GSE Reform Exacerbates Market Risk

The ongoing uncertainty about the future of Fannie Mae and Freddie Mac is weighing on the mortgage industry and it’s only going to get worse with time, said the former head of the Federal Housing Finance Agency this week. Edward DeMarco, now a senior fellow in residence for the Milken Institute’s Center for Financial Markets, warned that with the government in effective control of the mortgage market, the risk grows of capital allocation and pricing decisions made through the prism of political calculation rather than due to sound, market driven principle.


September 19, 2014 - Inside The GSEs

IG: Fannie, Freddie Not Ready for Rep & Warranty Change

Fannie Mae and Freddie Mac were not ready for the new representation and warranty framework that took effect early last year at the insistence of the Federal Housing Finance Agency, according to a new Inspector General audit. Announced in September 2012 and implemented Jan. 1, 2013, the framework relieved sellers from certain reps and warrants, including those relating to credit underwriting and eligibility of the borrower and the property that were formerly effective for the life of the loan.


September 19, 2014 - Inside The GSEs

Senate Confirms New FHFA Inspector General

The Senate voted this week to approve the nomination of Laura Wertheimer to be the newest Inspector General of the Federal Housing Finance Agency. Wertheimer, a Washington, DC, securities lawyer in private practice, was nominated by President Obama in May to replace Steve Linick, who resigned in the summer of 2013 to serve as the State Department’s IG.


September 19, 2014 - Inside The GSEs

FHLBank Membership Rule Foes Turn to Congress to Pressure FHFA

Hundreds of community banks, credit unions and community development financial intuitions within the Federal Home Loan Bank system will be adversely impacted and even face expulsion from the FHLBanks if a proposed Federal Housing Finance Agency rule change goes into effect, say rule opponents. The FHFA’s proposal, issued earlier this month, would change the FHLBank membership qualifications by imposing an ongoing asset test on FHLB members, requiring that they track and report on the mortgage-related assets they hold on their books.


September 19, 2014 - Inside The GSEs

Groups Petition Congress to Seek Transparency in GSE Profit Sweep

Congress should put the screws to the Treasury Department to disclose all documents pertaining to the origins of the Obama administration’s controversial “net-worth sweep” of Fannie Mae and Freddie Mac profits, according to a coalition of right-leaning public policy groups. In a letter dispatched late this week to the top Republican and Democrat of the House Financial Services Oversight and Investigations Subcommittee, the 17 groups led by the Competitive Enterprise Institute urged lawmakers to intervene to impose transparency over what GSE shareholders consider an extra-legal maneuver by the executive branch.


September 19, 2014 - Inside MBS & ABS

Fannie Mae, Freddie Mac Multifamily Business Way Behind Last Year’s Pace

Fannie Mae and Freddie Mac were both active this week with multifamily MBS transactions, but they’ll have to double-time it if they plan to match last year’s levels. The odds are against them. Fannie’s multifamily new business volume came to $13.8 billion through August 2014, compared with $20.4 billion the year before. The government-sponsored enterprise would have to crank out another $15 billion in the last four months of 2014 to match the 2013 total of $28.8 billion. For rival Freddie, multifamily new business activity totaled...


September 19, 2014 - Inside MBS & ABS

HSBC’s Deal With FHFA Allows for Tax Write-Off; Virginia Sues 13 Banks for $1.1 Billion Over MBS

The Federal Housing Finance Agency late last week announced a $550 million legal settlement with HSBC North American Holdings, leaving just two defendants in the conservator’s civil fraud cases tied to non-agency MBS – but a consumer group is crying foul over what it says are the deal’s lenient terms. The agreement resolves claims against HSBC regarding alleged violations of federal and state securities laws in connection with non-agency MBS purchased by Fannie Mae and Freddie Mac from 2005 to 2007. HSBC – which at one time owned subprime giant Household Finance – noted...


September 19, 2014 - Inside MBS & ABS

Non-Agency MBS Market Still Stuck, Experts Agree; Policymakers, Players Discuss Ways to Ignite Growth

The non-agency MBS market remains stuck in the post-crisis doldrums, showing no signs of recovering, according to experts participating at this week’s Bipartisan Policy Center’s Housing Summit in Washington, DC. Efforts to ignite the growth in non-agency securitization channels to help reduce the government’s role in housing finance and draw back private capital have produced little result. Except for sporadic twitches, thanks to a smattering of deals backed by jumbo loans, the non-agency MBS market is barely alive, panelists said. The government, which is working to revive the non-agency market, sees...


September 18, 2014 - Inside Mortgage Finance

Experts: Stalled GSE Reform Legislation, Prolonged Conservatorship May Drive Private Capital Elsewhere

Time is not a friend to the housing finance system so long as Fannie Mae and Freddie Mac remain in government conservatorship with no endgame in sight, according to the former head of the Federal Housing Finance Agency. Former FHFA Acting Director Edward DeMarco, now a senior fellow in residence for the Milken Institute’s Center for Financial Markets, told attendees at this week’s Bipartisan Policy Council’s housing summit in Washington that the ongoing conservatorships of the two government-sponsored enterprises – now in the sixth year – will continue to distort the market and place taxpayers at risk. “The conservatorships are...


Poll

Over the next six months we plan to hire this many more additional loan officers:

1 to 10 (We're being careful.)

31%

11 to 30 (We're optimistic.)

10%

More than 30 (We're in a growth mode as the banks get out.)

31%

We're cutting back. (Are you nuts? It's ugly out there.)

29%

Housing Pulse