Fannie Mae and Freddie Mac out of existence, the two GSEs aren’t going anywhere for the near-future, say industry observers. Two bills – one by a Republican GSE hawk filed two weeks ago, the other a bipartisan proposal soon to be submitted that would wind down and replace Fannie and Freddie over a period of 5 to 10 years – have cranked up the volume of chatter about the prospects of GSE reform on Capitol Hill. Don’t hold your breath because nothing has changed, according to financial industry consultant Bert Ely.

The bipartisan Senate legislation being drafted to finally resolve the conservatorships of Fannie Mae and Freddie Mac attempts to meet the needs of a lot of interests in the mortgage finance industry, including small lenders, Wall Street, the multifamily business and even, potentially, current owners of common stock issued by the two government-sponsored enterprises. A discussion draft of the bill, the Secondary Mortgage Market Reform and Taxpayer Protection Act of 2013, outlines a broad plan for shutting down Fannie and Freddie and replacing them with a new entity – the Federal Mortgage Insurance Corp. – that is intended as a transition to a fully private mortgage market. A copy of the draft legislation, which is primarily the work of Sens. Bob Corker, R-TN, and Mark Warner, D-VA, was provided to Inside Mortgage Finance. The draft bill includes...

The Department of Housing and Urban Development will face intense scrutiny from lawmakers after revelations this week that the department may have suppressed information indicating much higher projected losses for the FHA Mutual Mortgage Insurance Fund than it reported to Congress. Rep. Darrell Issa, R-CA, chairman of the House Committee on Oversight and Government Reform, raised the issue in a May 29 letter to FHA Commissioner Carol Galante, citing suspicious email exchanges between certain top FHA officials and Tyler Yang, chairman and chief executive officer of Integrated Financial Engineering, which performed the FY 2012 actuarial audit of the fund. The letter is...

Despite the best efforts of supporters readying another push to legislatively enhance the Home Affordable Refinance Program, a proposed HARP 3.0 bill in the Senate will ultimately remain a once-interesting idea whose time has passed, say industry observers. From its initial introduction during the 112th Congress through subsequent tweaking and refiling earlier this year, the Responsible Homeowner Refinancing Act of 2013, S. 249, by Sens. Robert Menendez, D-NJ, and Barbara Boxer, D-CA, has struggled to gain traction in the Senate. The Obama administration has mounted...

A Senate bill filed last week by a Georgia Republican would wind down Fannie Mae and Freddie Mac and create a transitional mortgage program that would be sold to the private sector within a decade of the proposed legislation’s enactment. The Mortgage Finance Act of 2013, S. 1048, by Sen. Johnny Isakson, R-GA, reprises his proposed legislation of the same name from 2011. The bill would replace the two government-sponsored enterprises with a single Mortgage Finance Agency. The MFA created under S. 1048 would be...

The FHA’s net-worth requirement, now fully phased in nearly three years since it was revised, will help ensure that only responsible, well-capitalized lenders and mortgagees are involved in the origination of FHA-insured loans. However, small FHA lenders may get squeezed out in the process. On May 20, the second and final phase of FHA’s new net-worth rule became effective. The final rule provides that, regardless of size, all applicants for FHA approval and those with current approval must have a ...

The Texas House of Representatives has approved legislation that will let voters decide on Nov. 5 whether to allow home-equity purchase lending in the Lone Star State. The bill would amend the Texas constitution to authorize Home Equity Conversion Mortgage for Purchase loans, which would make the program available to Texans for the first time. The state legislature voted 139 to 1 in favor of Senate Joint Resolution 18, which the Texas Senate approved unanimously in March. Specifically, the bill would amend the state constitution to ... [One chart]

The prospect of legislation being offered that would grant the Department of Housing and Urban Development greater authority to manage the Home Equity Conversion Mortgage program has improved significantly after two House lawmakers declared their intention to introduce a bipartisan bill. Reps. Michael Fitzpatrick, R-PA, and Denny Heck, D-WA, announced during a recent hearing by the House Financial Services Subcommittee on Housing and Insurance that they will co-sponsor legislation to give the FHA the authority it needs to swiftly implement HECM reforms by mortgagee letter. Fitzpatrick expressed his support for ...

A top official of the Department of Housing and Urban Development said the agency is as concerned as Congress and the industry about mortgages seized through the power of eminent domain and will not refinance any mortgage taken in this manner. Testifying at a recent hearing before the House Financial Services Subcommittee on Housing and Insurance, Charles Coulter, deputy assistant secretary for housing, said FHA leadership is very much concerned about the idea of seizing troubled mortgages held in private-label securitizations under the power of ...

Legislation introduced last week by a Senate Republican would revoke the charters of Fannie Mae and Freddie Mac and create a new Mortgage Finance Agency for the securitization of single-family and multifamily mortgages. Meanwhile, a separate bipartisan Senate bill still in the works would also dispense with the existing two government-sponsored enterprises while building a new one. Filed on May 23 by Sen. Johnny Isakson, the Mortgage Finance Act of 2013 is patterned on legislation the Georgia Republican proposed in 2011. It would put the GSEs into “irrevocable receivership,” with the Federal Housing Finance Agency tasked as their receiver no later than 18 months after enactment of the bill. “Immediately upon placement of the enterprises into receivership, the FHFA shall commence...