A few weeks back, Rep. Mark Takano, D-CA, called for Congressional hearings on the single-family rental MBS market, singling out investments made by the Blackstone Group.
Company executive Doug Reilly, commenting on the mortgage M&A market, had this to say: “It seems we need to take 20 girls to the alter just to marry one”…
A federal judge last week granted discovery to attorneys for a hedge fund representing one group of Fannie Mae and Freddie Mac shareholders as it seeks to challenge the government’s August 2012 “net worth sweep” that effectively confiscates both GSEs’ profits. Fairholme Capital Management, founded by Wall Street veteran Bruce Berkowitz, controls roughly $2.4 billion (face value) of Fannie and Freddie "junior" preferred. Thanks to the September 2008 government takeover of the two firms, the U.S. Treasury controls the senior preferred and is effectively the owner of the two GSEs.
A group of 14 Republican senators led by Louisiana's David Vitter told the Federal Housing Finance Agency that it should stand fast against any notion of lifting the suspension of contributions from Fannie Mae and Freddie Mac to two housing trust funds. The GOP senators dispatched a letter last week to FHFA Director Mel Watt, countering a plea signed by 33 Democrats in January calling on the new agency director to immediately authorize GSE funding to the National Housing Trust Fund and the Capital Magnet Fund.
Yet another defendant in the Federal Housing Finance Agency’s massive litigation effort against some of the nation’s largest lenders for bad mortgage-backed securities sales to Fannie Mae and Freddie Mac has settled. The FHFA announced last week that Societe Generale has agreed to pay $122 million to settle a suit by the Finance Agency regarding non-agency MBS purchased by the two GSEs during 2006.
Fannie Mae, Freddie Mac and the Federal Home Loan Banks will now be required to report directly any suspected fraud to the Financial Crimes Enforcement Network under the terms of a final rule. Published in the Feb. 25 Federal Register, the final rule adopts “without significant change” FinCEN’s November 2011 proposal to require the GSEs to file suspicious activity reports directly with FinCEN rather than through their own regulator, the Federal Housing Finance Agency.
Despite gains in oversight and reform of the compensation packages for Fannie Mae's and Freddie Mac's top-level executives, the Federal Housing Finance Agency did not keep a close eye on the pay packages for scores of GSE vice presidents and directors, according to the FHFA’s official watchdog. In a heavily redacted draft memo released to the public, the FHFA’s Office of Inspector General said that while the agency reviewed and examined the GSEs' executive compensation, it did not keep close tabs on “non-executive senior professional compensation practices.”
First Horizon National Corp. announced last week it entered into a “definitive resolution agreement” with Freddie Mac regarding loan repurchase issues. The agreement settles all representation and warranty claims related to loans sold by First Horizon to Freddie Mac from 2000 to 2008. First Horizon CEO Bryan Jordan said in a statement the agreement with the GSE is “a big step forward” in the company’s ongoing efforts to unwind from the mortgage business the firm sold in 2008.
Fannie, Freddie Slashed CMBS Holdings in 2013. Fannie Mae and Freddie Mac continued to sell off their holdings of non-agency commercial mortgage-backed securities as the preferred strategy for meeting their regulator's demand that the two GSEs accelerate the reduction in their retained mortgage portfolios.The two GSEs reduced their CMBS holdings by 51.4 percent over the course of 2013, according to an analysis of year-end financial statements.
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