Although Fannie and Freddie continue to earn money hand over fist, their common shares are probably worth just $1 a piece, according to a new research report…
Fannie Mae and Freddie Mac earnings remained strong in the second quarter with the GSEs posting a combined $4.86 billion in net income, but concerns about the soon to be non-existent capital buffer also remain. The GSEs’ $9.85 billion in net income for the first half of the year more than doubled their combined earnings from the same time period in 2016, according to their second quarter earnings statements released last week. While Fannie posted a net income of $3.20 billion, a 15.4 percent quarterly improvement, Freddie witnessed a 24.7 percent decline to $1.66 billion in the second quarter.
Although Federal Housing Finance Agency Director Mel Watt is concerned about the GSE capital buffer falling to zero early next year, it appears he’s unlikely to take administrative action anytime soon to fix the situation. At least that’s the message conveyed in a new letter Watt penned to National Association of Realtors President William Brown. According to the Aug. 9 letter, Watt notes he’s “very concerned” about the issue because it “increases the probability of a draw which could cause an adverse market reaction.” The regulator adds: “However, I am sensitive to the prospect that whatever steps FHFA could take might be misperceived as either an effort...
PHH Corp. announced a $75 million settlement with the Department of Justice and the Federal Housing Finance Agency to settle unspecified allegations tied to the underwriting of legacy loans. However, whether Fannie Mae and Freddie Mac loans can be targeted for False Claims Act purposes is still debatable. The DOJ portion of the settlement covers FHA and VA mortgages originated from January 2006 until the end of 2011. …
Federal Housing Finance Agency Director Mel Watt said both old and new obstacles have negatively affected African-American homeownership, which has steadily retrogressed. Before the housing crisis, the homeownership rate for African-Americans was close to 50 percent in 2004. However, by 2017 it declined closer to levels last seen in 1994. “We are worse off today than we were 20 years ago,” said Watt, while speaking at the National Association of Real Estate Brokers’ annual convention in New Orleans last week. He pointed out that because home equity has played a major role in African-American assets, the impact of the economic downturn and foreclosure crisis on wealth in
To minimize confusion with the implementation of the single security, the Federal Housing Finance Agency said it doesn’t plan to introduce new credit- scoring models until at least 2019. A number of groups have been pushing the government-sponsored enterprises to look beyond the FICO score, and Fannie and Freddie have been studying the issue. But FHFA Director Mel Watt said any major change would have to wait until the GSEs have completed the complex single-security project. “Based on the overwhelming feedback we have received from the industry, it is clear that it would be a serious mistake to change credit scoring models before mid-2019,” he told the annual convention of the National Association of Real Estate Brokers last week.
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