When Fed Chair Janet Yellen was subsequently asked to define what the committee meant by the term “considerable time,” she replied that it is “hard to define” but “probably means something on the order of around six months.”
At the end of 2013, the Fed’s holdings topped the commercial banking industry’s total MBS portfolio of $1.369 trillion, and it accounted for 26.6 percent of the $5.601 billion of agency single-family MBS outstanding at that time, according to Inside MBS & ABS.
The agreement among Republicans, Democrats and the White House for the need to act and the heightened urgency to pass legislation before a potential shift in power after the mid-term elections could determine the outlook for housing reform legislation in 2014, according to analysts. Fannie Mae and Freddie Mac reform efforts in Congress and investor lawsuits are helping shape the housing debate this year, and the recently issued Johnson-Crapo draft legislation is the bill to watch going forward, said Bloomberg Industries analysts this week. The profitability of the two government-sponsored enterprises in 2013 not only fueled...
Fannie Mae and Freddie Mac continue to develop their new common securitization platform in relative secrecy, although the concept has become a key component of mortgage-finance reform recently unveiled by the leadership of the Senate Banking, Housing and Urban Affairs Committee. Under the bill drafted by Sens. Tim Johnson, D-SD, and Mike Crapo, R-ID, the CSP would operate as a privately-owned utility through which single-family MBS would be issued, with or without the new explicit government guaranty. Regulated by the new overseer of the MBS market, the Federal Mortgage Insurance Corp., the platform would shepherd...
Bipartisan mortgage-finance reform legislation from leaders in the Senate focuses on replacing Fannie Mae and Freddie Mac securitization programs with a new government MBS guaranty, but it also includes options for MBS issued outside the proposed agency-like structure. Sens. Tim Johnson, D-SD, and Mike Crapo, R-ID, this week revealed the text of their Housing Finance Reform and Taxpayer Protection Act, which may have little chance of passage this year but may be the starting point for reform in the next Congress. Johnson-Crapo would create...
The mortgage securitization sector is pleased that the bipartisan agreement between Senate Banking, Housing and Urban Affairs Committee Chairman Tim Johnson, D-SD, and Ranking Member Mike Crapo, R-ID, on housing-finance reform includes a small but critical provision to support the to-be-announced market. The 442-page draft sets a five-year timeline to shut down Fannie Mae and Freddie Mac and in their place create a new Federal Mortgage Insurance Corp., a utility that securitizes and guarantees mortgages. The government’s MBS guaranty would be supported by a 10 percent first-loss piece funded by private investors. The FMIC would approve...
The Federal Open Market Committee this week voted to scale back the central bank’s purchases of agency MBS again, dropping the monthly growth target to $25 billion, but the deceleration is barely keeping even with the rapid slowdown in new MBS issuance. At its December meeting, the FOMC decided to drop its MBS purchases to a pace that would add $35 billion per month, and lowered that by another $5 billion at its January meeting. The program began in late 2012 at $40 billion a month. The central bank will continue to reinvest principal and interest payments on its holdings in the agency MBS market. The most recent available data show...[Includes two data charts]
The total amount of principal reduction and refinancing provided by banks for consumer relief under the landmark $25 billion national servicing agreement far exceeded what was required in the agreement, according to final credit reports filed by settlement monitor Joseph Smith. Filed with the U.S. District Court for the District of Columbia this week, the reports confirmed that Wells Fargo, Bank of America, JPMorgan Chase, CitiBank and Ally have met their consumer relief and restructuring obligations under the settlement. In total, the five companies provided...
Top Democrats on Capitol Hill are peeved that the Justice Department is not making the prosecution of mortgage lender and servicer abuses much of a priority, and they are pressing Attorney General Eric Holder for a meeting to discuss what to do about it. Their ire was raised by a recent report from the DOJ’s Inspector General that found, among other things, that the department had not prioritized the investigation of mortgage fraud and that it reported unreliable, inflated statistics about the scope of its prosecutorial efforts. In a letter to the DOJ, Reps. Elijah Cummings, D-MD, and Maxine Waters, D-CA, and Sen. Elizabeth Warren, D-MA, focused...
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