A corporate tax cut, now being debated on Capitol Hill, could wreak havoc on the government-sponsored enterprises’ deferred tax assets and result in Fannie Mae and Freddie Mac having to take draws from the U.S. Treasury.
According to Wallison: “There is nothing about the way the government has managed the housing finance system for the last 50 years that would remotely recommend a continuing government role.”
Tuesday’s panel discussion has been dubbed the “think tank” hearing because it includes representatives from the Urban Institute, the Milken Institute and American Enterprise Institute…
New issuance of agency single-family MBS in October was almost even with the previous month, but there was a sharp swing of market share between the two government-sponsored enterprises, according to a new Inside MBS & ABS ranking and analysis. Total new MBS issuance by Fannie Mae, Freddie Mac and Ginnie Mae came to $113.99 billion last month, a modest 0.5 percent decline from September. But while Fannie production slumped 11.5 percent, Freddie ... [Includes two data charts]
This week, the government-sponsored enterprises reported combined earnings of $7.69 billion in the third quarter of 2017, which was up almost $3 billion from the previous period. As the end of the year approaches, they also continue to reduce their retained investment portfolios as mandated by the Federal Housing Finance Agency. Fannie Mae and Freddie Mac earnings were boosted by a legal settlement with the Royal Bank of Scotland over non-agency MBS ... [Includes one data chart]
Fannie Mae and Freddie Mac earnings remained strong in the third quarter as the GSEs posted a combined $7.7 billion in net income. Fannie reported $3.02 billion, a 5.5 percent decline from the prior quarter. Freddie posted $4.67 billion, more than double the $1.66 billion reported in the second quarter. While the combined number is well above the $4.86 billion total booked in the previous quarter, the bulk of it is attributed to a legal settlement windfall with the Royal Bank of Scotland over non-agency mortgage-backed securities sold to the GSEs. Freddie received the lion’s share of the taxable settlement with $4.5 billion and Fannie received $975 million.
In round two of a House Financial Services subcommittee on Housing and Insurance hearing this week, housing finance reform talks shifted from small lender access to getting the GSEs out of conservatorship. During his testimony, Mortgage Bankers Association President and CEO David Stevens called the extended conservatorship, which is fast approaching a decade, economically and politically unsustainable. “The time to act on comprehensive legislative reform is now,” he said. While Stevens acknowledged that the Federal Housing Finance Agency has taken positive steps as conservator, he reiterated his view that only Congress can provide the “legitimacy and public confidence needed for long-term stability in both the primary and secondary markets.”
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