The former CFO of Fannie Mae is not a fan of the GSE’s popular Connecticut Avenue Securities risk-sharing transactions, noting that the terms and pricing on recent CAS deals have worsened since the program began in 2013. Tim Howard, who left Fannie in 2004 and was involved in litigation regarding his tenure there, said the costs incurred don’t match the potential benefit, especially in the company’s latest transactions. Over the past three years, Fannie has issued $13.4 billion in CAS notes covering $467 billion in newly originated single-family mortgages. Howard said this leaves the company to pay about $7 billion over the next 10 years in premiums and hedging costs.
The Federal Housing Finance Agency this week filed a request to transfer lawsuits brought by Fannie Mae and Freddie Mac shareholders in four district courts to the U.S. District Court in Washington. The government-sponsored enterprise regulator hopes to ward off future “copycat” cases and those where plaintiffs may be encouraged to “shop” for the best forum, based on the ruling. FHFA said it is certain that the number of pending complaints challenging the quarterly U.S. Treasury sweep of Fannie and Freddie net income will continue to grow. As a result, the agency said the transfer would be more efficient and benefit the parties and courts. “The claims and relief sought in each of the four related cases are...
Republicans on Capitol Hill this past week expressed dismay with Fannie Mae and Freddie Mac recently transferring $180 million into federal affordable housing programs. In fact, 10-K filings by the two government-sponsored enterprises indicate Fannie has paid $217 million, and Freddie has turned over $165 million for a total of $382 million. By law, both GSEs are required...
When the two GSEs were losing money earlier in the decade, then-Acting FHFA Director Edward DeMarco suspended the contributions before any had ever been made.
Some observers say the latest rate adjustments by private mortgage insurers will not have a significant impact on FHA business nor would they compel the government agency to alter its mortgage insurance premiums or policy. Others say the pricing change could trigger a race to the bottom as risks of MIP cuts increase materially. Six private MIs have announced adjusted rates over the last couple of months inresponse to new eligibility standards set by ...
Fannie Mae and Freddie Mac customers repurchased $357.1 million of mortgages during the fourth quarter of 2015, another record low, according to a new analysis by Inside The GSEs. Seller repurchases, including buyback demands settled through indemnification, were down 17.7 percent from the third quarter, marking the fourth consecutive record low. At the same time, the inventory of unresolved buyback demands continued to decline. Only $657.2 million of loans were subject to pending or disputed repurchase requests at the end of 2015, the smallest pipeline of such cases since the GSEs began disclosing repurchase activity back in early 2012. The Dodd-Frank Act requires “asset securitizers” to file quarterly reports with the Securities and Exchange Commission...
Whether or not to allow chattel loans, and how to best support the manufactured housing industry, was one of the topics that garnered the most attention in the Federal Housing Finance Agency’s proposed rule. The Federal Housing Finance Agency received 324 comments before the commenting period closed on March 17. Many noted that Fannie Mae and Freddie Mac should be doing more in the MH market, and pointed specifically to supporting chattel lending. Leslie Gooch, senior vice president of government affairs for the Manufactured Housing Institute, said the FHFA should require the GSEs to significantly increase their support of MH through the purchase of home-only, or chattel loans.
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.
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