Fannie Mae and Freddie Mac shareholders who are contesting the government’s net worth sweep may have few options left now that the Supreme Court of the United States has rejected their plea for appeal of lower court rulings that went against them.
Fannie Mae and Freddie Mac reduced their combined mortgage portfolios to $484.2 billion during the fourth quarter of 2017, according to an Inside MBS & ABS analysis.
Acting Ginnie Mae President Michael Bright: “If they don’t have money to make principal and interest payments to investors every 20th day of the month, then Ginnie MBS are in trouble.”
Ginnie Mae is considering revising its acknowledgement agreement with mortgage-backed securities issuers and third-party creditors to ensure that nonbank program participants have sufficient liquidity to make timely payments to investors.
The Internal Revenue Service said that interest payments on home-equity loans can still be deductible under the Tax Cuts and Jobs Act that went into effect at the end of 2017 if it’s used for home improvements.
Pete Carroll, an executive at CoreLogic, noted that many Democrats in Congress will not support a housing finance reform bill unless such provisions are included.
In January, the government-sponsored enterprises and Ginnie placed their guarantees on $102.48 billion of new single-family MBS, a modest 6.9 percent decline from December.
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