The 11 surviving Federal Home Loan Banks posted a significant increase in net income during the fourth quarter of 2015, along with a surprising jump in advances. The Office of Finance reported that the FHLBanks generated $673 million in net income during the fourth quarter, a 39.0 percent increase from the prior period. That brought year-to-date income to $2.850 billion, a 26.6 percent gain from 2014. Non-interest income was up sharply last year in large part because of settlements related to FHLBank investments in soured non-agency mortgage-backed securities, which brought in $688 million in 2015, mostly in the first half of the year. Legal settlements accounted for...
The Federal Housing Finance Agency issued a final rule last week in which it adjusted the maximum civil money penalties it can impose on a regulated entity or any entity-affiliated party. The last time the maximum CMP amounts were set was in 2008. The FHFA noted that the increases in maximum penalty amounts contained in this final rule might not necessarily affect the amount of any CMP the FHFA may seek for a violation. “FHFA would calculate each CMP on a case-by-case basis in light of a variety of factors,” the final ruling stated. The FHFA’s Rules of Practice and Procedures allow the agency to govern cease-and-desist proceedings, civil money penalty assessment proceedings, and other administrative adjudications.
FHFA Ramps Up HARP Social Media Efforts. The Federal Housing Finance Agency kicked off a new social media campaign in late February, #HARPNow, to let more than 367,600 homeowners across the country know about the Home Affordable Refinance Program before it expires on Dec. 31, 2016. FHFA will use Twitter, LinkedIn and YouTube to reach homeowners in the 10 states with the greatest concentration of HARP-eligible borrowers. Fannie Names Winner of Second NPL Community Impact Pool. Fannie Mae announced that New Jersey Community Capital is the winning bidder of the company’s second Community Impact Pool of non-performing loans. This pool of loans was structured to attract diverse participation from non-profits, smaller investors and minority- and women-owned businesses. The transaction...
The decline was largely based on a seasonal slump in purchase-mortgage activity. Looking forward, primary-market indicators point to a solid increase in consumer demand.
The GSEs will publicly release their non-performing loan sales data for the first time, conclude their assessment of various credit scoring models and the FHFA will issue a request for input on front-end credit risk transfer transactions.
The Ninth Circuit Court of Appeals has dismissed an argument in a whistleblower case, ruling that Fannie Mae and Freddie Mac are not “federal instruments” for the purposes of the False Claims Act, a federal statute that’s been used aggressively against FHA lenders. The FCA imposes liability on persons that defraud government programs and was originally enacted to penalize private parties that profited illegally in selling supplies to the U.S. Army during the Civil War. In the case of United States ex rel. Adams v. Aurora Loan Services, Inc., et al., the government argued...
Forty-five congressmen signed a letter addressed to the head of the Federal Housing Finance Agency on March 1 citing the need to reform the way nonperforming loan sales are conducted and singled out Lone Star Funds as a “bad actor” in the transactions. The letter, addressed to FHFA Director Mel Watt as well as Secretary Julian Castro of the U.S. Department of Housing and Urban Development, noted that there are improvements both agencies should take to better align the programs with the goals of stabilizing neighborhoods, alleviating the affordable housing crisis and working with organizations that have a track record of homeownership preservation.
As talks of GSE reform intensify with FHFA Director Mel Watt’s speech last month citing concerns about dwindling capital levels, the Mortgage Bankers Association held a briefing this week on Capitol Hill focusing on the urgent need for reform, but stopped short at agreeing with calls to recapitalize the mortgage giants. Reasons to reform Fannie Mae and Freddie Mac appear to be growing like a never-ending laundry list with increased risk to taxpayers at the very top. The MBA said its core concern is that one of the GSEs will have to take a draw from the U.S. Treasury because earnings capacity is much less than it has been over the past few years and is only expected to decline.
Freddie Mac and Fannie Mae recently enhanced the disclosures for their single-family credit risk transfers to give potential investors more information on the deals. Investors and lawmakers have been calling for more transparency since the GSEs began transferring credit risk several years ago.Freddie’s disclosures for all single-family credit risk transfer initiatives will now include quarterly updates on credit scores for outstanding loans in all transactions as well as quarterly updated mark-to-market loan-to-value ratios. Freddie said this leverages the estimated property value from its Home Value Explorer Automated Valuation Model tool. Investors can analyze loan-level mortgage insurance details and identify whether or not the lender or the borrower paid the mortgage insurance on the loan.
RSS