Repurchases and indemnifications by banks and thrifts fell to “just” $936.0 million in the third quarter of 2015, according to a new Inside Mortgage Trends analysis of bank call-report data. That was the lowest quarterly buyback figure for the industry since the first quarter of 2008, when banks began disclosing this activity in their call reports. The third-quarter repurchase total was down 17.9 percent from the previous three-month period. On a ... [Includes one data chart]
From plans to argue a recent motion to dismiss a case to appeals and new lawsuits on the radar, investors in Fannie Mae and Freddie Mac stock are continuing to challenge government officials in their quest to prove that the conservatorship and the Treasury sweep were illegal. Last week, the Federal Housing Finance Agency filed a motion to dismiss a case that was filed by two GSE shareholders in Delaware this summer who argued that the Treasury sweep, which takes the bulk of the government-sponsored enterprises’ profits, is illegal under state law. The complaint stated that with Fannie chartered under Delaware law and Freddie under Virginia’s jurisdiction, the preferred stock of a...
The Federal Housing Finance Agency plans to increase its staffing levels by almost 12 percent in the new year, even though the asset base of its two charges in conservatorship – Fannie Mae and Freddie Mac – continues to shrink.Moreover, the agency’s watchdog – the Office of Inspector General – plans to increase its head count by an aggressive 23 percent in fiscal year 2016 to 155 positions. The figures were contained in the FHFA’s new “Performance and Accountability Report.” In a past audit, the OIG criticized the FHFA for lacking a “sufficient number of examiners.” In the new budget, the FHFA plans to increase its examinations head count to 275 from 248 in FY 2015.
The hedging effects of Fannie Mae and Freddie Mac – including instruments bought to protect the value of agency MBS – had different results in the third quarter as interest rates unexpectedly declined and stayed low for several weeks. Overall, Fannie booked $2.6 billion of negative charges against the value of its derivatives in the third quarter, while Freddie booked a much larger charge on its hedging activities: $4.2 billion. The differential did not pass without notice, especially since earlier this month Fannie reported a companywide profit of $2.0 billion and Freddie spilled red ink of $475 million. Even Federal Housing Finance Agency Director Mel Watt chimed in on Freddie’s loss, a rarity for the regulator who usually only issues statements when he has to.
FHFA Seeking Comments on Borrower Survey. The Federal Finance Housing Agency is seeking public comments concerning the information collection known as the “National Survey of Existing Mortgage Borrowers” (NSEMB). The NSEMB will be a periodic, voluntary survey of individuals who currently have a first mortgage loan secured by single-family residential property and will consist of about 80 to 85 questions. The comment period ends Jan. 11. SIFMA Supports Nomura’s Appeal in FHFA Case. The Securities Industry and Financial Markets Association recently filed an amicus brief in support of the defendants to reverse a case in which the Federal Housing Finance Agency argued that Nomura Holdings sold shoddy mortgage-backed securities to Fannie Mae and Freddie Mac.
An estimated 32.5 percent freefall in refi originations during 3Q had a much bigger impact on the conventional market than on government-insured lending.
Given the president’s intention to defend the Dodd-Frank Act for the remainder of his term, an industry-wide QM safe harbor for portfolio mortgages is “a heavy lift,” said former FHA chief Dave Stevens.
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