There have been a number of moving parts in GSE shareholder cases recently, including oral arguments heard this week in one case and three separate lawsuits asking the Supreme Court of the United States to review the constitutionality of the structure of the Federal Housing Finance Agency. Attorney and managing partner David Thompson with Cooper & Kirk in Washington, D.C., who represents the shareholders in Christopher Roberts vs. FHFA, participated in this week’s oral arguments in the Seventh Circuit Court. He called the net-worth sweep unlawful because it imposed a “mandatory zero-capital regime and violated its own statutory commands to preserve and conserve assets and restore them to soundness.”
Federal Housing Finance Agency Director Mel Watt said the agency is reviewing the possibility of having Fannie Mae and Freddie Mac update their credit score model requirements. But first he has questions. Although it wouldn’t be implemented until late 2019, Watt, while speaking at the Mortgage Bankers Association’s annual conference last week, reminded that it’s not an easy decision. The FHFA plans to issue a request for input sometime this month to get stakeholder feedback on the issue and make an informed decision about the GSEs’ future credit score model requirements in 2018 as soon as it completes reviewing responses to the RFI.
Hensarling to Retire After Term Ends. House Financial Services Committee Chairman Jeb Hensarling, R-TX, announced that he will not run for re-election and is retiring to spend more time with his family. Some think Hensarling’s departure could speed up Congressional efforts to enact housing finance reform. However, Cowen and Company said this is ultimately negative for Fannie Mae and Freddie Mac as Hensarling now becomes the top contender to replace Mel Watt as FHFA director in January 2019. “Hensarling has previously proposed liquidating the enterprises. At the least, we would expect him to shrink the GSE share of the market,” said analyst Jaret Seiberg. MBA President to Retire. Mortgage Bankers Association President and CEO David Stevens...
Fannie Mae and Freddie Mac generated a combined $7.69 billion in net income during the third quarter of 2017, up significantly from the $4.86 billion in the second quarter, according to an Inside Mortgage Finance analysis of earnings reports released this week. Freddie’s earnings were unusually high at $4.67 billion thanks to a legal settlement with the Royal Bank of Scotland over non-agency mortgage-backed securities sold by the investment firm to the government-sponsored ...
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