“This new trove of documents conclusively shows that the net worth sweep was designed solely to boost Treasury’s coffers and prevent the GSEs from rebuilding capital or exiting conservatorship,” said Investors Unite, a shareholder rights group.
New Residential has purchased several servicing portfolios over the past year, acquiring rights from CitiMortgage, Walter/Ditech and United Shore, among others.
Fannie Prices $1.4B CAS Deal. In the GSE’s fifth credit risk-sharing transaction of the year under its popular Connecticut Avenue Securities program, Fannie Mae announced a $1.351 billion offering last week. The CAS program, launched in 2013, has been steadily growing, according to Laurel Davis, Fannie’s vice president of credit risk transfers. She noted that buyers are attracted to the program’s liquidity and transparency. This latest reference pool includes more than 174,000 single-family mortgage loans with an outstanding principal balance of about $43.8 billion.Original loan-to-value ratios are between 60 and 80 percent with the loans having been acquired between...
Participants in the low-income housing tax credit program said the re-entry of Fannie Mae and Freddie Mac into the market should not be limited to rural communities. The two GSEs were directed to stop investing in the tax credits in 2008 when they were placed under conservatorship. But a final rule issued by the Federal Housing Finance Agency in December, under its duty-to-serve requirement, determined that if the GSEs re-enter the LIHTC market, they should only be able do so in targeted areas. In May, the GSEs released draft proposals on ways to grow financing for specific underserved markets under DTS, which include rural housing, along with manufactured housing and preserving affordable housing for low- and moderate-income, households.
Fannie Mae’s announcement in May that it will raise the debt-to-income cap from 45 to 50 percent is a win for expanding access to credit, especially for minority families, says a recent report by the Urban Institute.UI anticipates that as many as 95,000 new mortgages could be approved annually. With African-American and Latino families more likely to have DTI ratios above 45 percent, the authors of the paper note that a large share of the new loans will likely be to those families. Prior to the change, Fannie allowed for flexibility up to 50 percent DTI in certain cases.
New documents were recently unsealed in Fairholme Funds vs. United States that give GSE shareholders more hope in proving the Treasury sweep was designed with an ulterior motive in mind.“The release of these documents is a very positive development in the case against Fannie [Mae] and Freddie [Mac]. These documents fatally undermine the government’s claim,” said Pete Patterson, a partner with the Cooper & Kirk law firm representing the plaintiffs. Officials from Treasury have repeatedly said that the sweep was designed to prevent the two mortgage giants from collapsing. But the latest batch of 33 confidential emails and memos released under court order appears to illustrate otherwise.
Mortgage principal reductions that left short-term payments unchanged had no effect on default or consumption for underwater borrowers, according to a new study from the Harvard Joint Center for Housing. Authors Peter Ganong and Pascal Noel believe the findings are significant in the design of loan modification programs – a key question for policymakers in their attempt to help struggling borrowers remain in their homes. The policy debate hinged on the effect of long-term debt ...
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