The GSEs stopped investing in low income housing tax credits in 2008 and now the Federal Housing Finance Agency is contemplating whether to allow Fannie Mae and Freddie Mac to resume LIHTC investing. While Fannie Mae is all for it, several affordable housing organizations express concern about the re-entry of the GSEs into the market. Fannie said its presence would enhance the stability of the LIHTC program and serve as a reliable source of capital for affordable housing in diverse economic cycles and markets. As an equity investor, the GSE explained that it will not displace private funding, but will instead look to balance the distribution of equity capital across the LIHTC market to include segments that still suffer from limited liquidity.
The GSEs’ insurance and reinsurance programs grew in 2015 and are expected to grow faster than Fannie Mae’s Connecticut Avenue Securities and Freddie Mac’s Structured Agency Credit Risk, which combined accounted for 83 percent of the volume in credit-risk-sharing transactions to date since the program began in 2013. Scott Smith, the Federal Housing Finance Agency’s associate director of capital policy, said that number slipped some in 2015 and that CAS and STACR were 75 percent of the volume in 2015, due to the emergence of insurance and reinsurance programs. Fannie’s Credit Insurance Risk Transfer and Freddie’s Agency Credit Insurance Structure have been picking up steam throughout 2015, said Smith.
After his request was rejected by the Federal Housing Finance Agency, Tim Pagliara, director of Investors Unite, filed a lawsuit in state courts this week seeking to gain access, as an individual stockholder, to the corporate records of Fannie Mae and Freddie Mac. With Fannie chartered under Delaware’s law and Freddie under Virginia’s jurisdiction, Pagliara, along with several other shareholder plaintiffs, argue that the U.S. Treasury Department’s sweep of the GSEs’ profits is illegal under state law. His suit, in particular, focuses on allowing him to inspect the books and records of Fannie and Freddie to get a better idea of the circumstances surrounding the sweep. Under the terms of the net worth sweep, the GSEs...
Combined operating expenses for Fannie Mae and Freddie Mac increased by $1.1 billion between 2012 and 2015, according to a recent Federal Housing Finance Agency’s Office of Inspector General white paper, and most of the costs were driven by FHFA’s mandated initiatives. After the IG published a paper in September 2015 criticizing the regulator for not properly approving the GSEs’ budgets, due to late timing and inadequate analysis and resources, the IG decided to trace the increases to detail who spent what and where the bulk of the spending went. Fannie witnessed the largest net increase of 31 percent or $726 million. The company’s expenses rose from $2.366 billion in 2012 to an estimated $3.092 billion...
As risks from cyber attacks on financial institutions remain a top concern, the Federal Housing Finance Agency Office of the Inspector General determined that the oversight of the Federal Home Loan Banks’ cybersecurity program is not effective.In an audit released late last month, the IG found in 14 out of the 15 Federal Home Loan Bank IT examinations performed in 2013 and 2014 that included vulnerability scanning and/or penetration testing, the division of bank regulation did not asses the design of the tests performed by contractors at the banks’ discretion.Vulnerability scanning includes a thorough examination of computers, computer systems, networks, and applications to identify security weaknesses.
The Federal Housing Finance Agency is looking to consolidate four outstanding Fannie Mae and Freddie Mac shareholder cases into one location and said it expects more cases will be filed soon. This week, the agency filed a request to transfer cases pending in four district courts to the U.S. District Court in Washington to discourage “copycat” claims and ensure consistent outcomes. “The claims and relief sought in each of the four related cases are substantially similar,” the FHFA said in court documents. “As a practical matter, plaintiffs are relitigating the same legal issues over and over in hopes of finding a court that will rule in their favor.” So far, there have been 15 complaints challenging the Treasury sweep and...
With ongoing rate increases, Fannie Mae and Freddie Mac have been working to address a host of issues concerning the lender-placed insurance business and said they observed a drop in premiums.After the Federal Housing Finance Agency directed the GSEs to help come up with ways to reduce the costs of LPI over the past several years, in 2015 they established a three-tiered minimum deductible for LPI coverage resulting in higher deductibles but lower premium costs, according to the GSEs’ 2015 progress report. This was in correlation with an FHFA directive in 2013 that prohibited Fannie and Freddie servicers from continuing to receive commissions or other similar incentive-based compensation from LPI carriers.
FHLBank Advance Data. JP Morgan Chase took the top spot for having the largest amount of Federal Home Loan Bank advances in the fourth quarter at $71,581. The bank saw a slight drop, 2.7 percent from the previous quarter, according to the latest data from Inside The GSEs (with chart). New number for Fannie. Fannie Mae created an easy to remember phone number to make getting in touch with the GSE simpler. Call 1-800-2-FANNIE (1-800-232-6643), which this week replaced multiple numbers. The GSE said the old phone numbers will remain available for a limited period of time. FHFA Chief FOIA Office Report. The 2016 Federal Housing Finance Agency Freedom of Information Act Officer Report noted that inter-agency emails, director calendar entries, internal memos and internal employee training materials are examples of the types of information the agency released at its discretion.
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