The CHLA suggests, among other things, that the U.S. Treasury stop sweeping all GSE profits and instead put that money in a capitalization reserve account...
With mortgage debt outstanding climbing by 0.4 percent during 2Q, the share of securitized loans fell to 64 percent at June 30, the lowest level since 2012.
The supply of residential MBS in the market grew tepidly in the second quarter of 2015, but not enough to increase the overall securitization rate for home mortgages. A total of $6.335 trillion of single-family MBS were outstanding at the end of June, a slim 0.1 percent increase from the previous quarter. The supply of MBS has been bouncing slightly higher and lower over the past six quarters, without gaining much traction. With total home mortgage debt outstanding climbing by 0.4 percent during the second quarter, the share of securitized loans fell...[Includes two data tables]
Fannie Mae and Freddie Mac CEOs may not see a sizable pay hike after the Senate approved by unanimous consent a bill to reverse the raises for the GSE executives. The “Equity in Government Compensation Act” approved last week would suspend the $4 million compensation packages for Fannie’s Tim Mayopoulos and Freddie’s Don Layton that were approved early this year after the Federal Housing Finance Agency said the CEOs could be paid as much as $7.26 million. Their salary would now each be capped at the $600,000 they earned prior to the pay hike. That’s a lot less than many individuals in upper management at the GSEs. “Giving massive taxpayer-funded pay raises to Fannie Mae and Freddie Mac isn’t just out of touch, it’s...
Fannie Mae completed its latest credit risk-sharing transaction with reinsurers this week. In CIRT-2015-3, Fannie retains risk for the first 50 basis points of loss on a $7 billion pool of loans. If this $35.2 million retention layer were exhausted, reinsurers would cover the next 250 basis points of loss on the pool, up to a maximum coverage of approximately $176.2 million. Coverage is provided based upon actual losses for a term of 10 years. Depending upon the paydown of the insured pool and the amount of insured loans that become seriously delinquent, the aggregate coverage amount may be reduced at the three-year anniversary and each anniversary of the effective date thereafter.
About 30 industry trade groups recently called for Congress to refrain from using GSE guaranty fees as a source of funding for highway programs or any other purposes beyond supporting Fannie Mae and Freddie Mac. The letter, addressed to House Speaker John Boehner, R-OH, as well as leaders Nancy Pelosi, D-CA, Mitch McConnell, R-KY, and Harry Reid, D-NV, aims to prevent the government from tapping g-fees to pay for pet projects. G-fees, used by Fannie and Freddie to protect against losses from loans that default, are a “critical risk management tool,” according to the trade groups who say that increasing g-fees for other purposes imposes an unjustified burden on the housing finance system.
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