The CHLA suggests, among other things, that the U.S. Treasury stop sweeping all GSE profits and instead put that money in a capitalization reserve account...
The amount of collateral securing advances at the Federal Home Loan Banks increased by 12 percent, to $688 billion, at the end of 2014, according to a newly released report by the Federal Housing Finance Agency. The report provides details of the levels of collateral pledged to the FHLBanks securing advances. Listing was the most used form of collateral as of the end of 2014, and accounted for 49 percent of collateral pledged. This was followed by blanket pledges, a lien on all or specific categories of a member’s assets, which was 39 percent of collateral pledged. Both were up 2 percent from the previous years. The report noted that FHLBanks typically give members greater borrowing capacity when...
The Securities and Exchange Commission dropped its civil fraud case against Thomas Lund, former executive vice president of Fannie Mae’s single-family business in the years leading up to conservatorship. The discontinuance of the case was announced this week by Lund’s attorney Michael Levy of Paul Hastings. “Thomas Lund has been vindicated,” he said. “After investigating for three years, litigating for another three years, deposing 50 witnesses and hiring four experts, the SEC concedes that it has not prevailed,” he said, adding that Lund will refrain, for 12 months, from signing things that he never signed in the past and has no intention of signing in the future. Lund will pay the agency $10,000. However, the SEC is classifying the payment as a “gift” to the...
With mortgage debt outstanding climbing by 0.4 percent during 2Q, the share of securitized loans fell to 64 percent at June 30, the lowest level since 2012.
A $1.5 trillion year is doable: according to survey figures compiled by Inside Mortgage Finance, residential funders originated $805 billion in the first half.
Fannie Mae and Freddie Mac CEOs may not see a sizable pay hike after the Senate approved by unanimous consent a bill to reverse the raises for the GSE executives. The “Equity in Government Compensation Act” approved last week would suspend the $4 million compensation packages for Fannie’s Tim Mayopoulos and Freddie’s Don Layton that were approved early this year after the Federal Housing Finance Agency said the CEOs could be paid as much as $7.26 million. Their salary would now each be capped at the $600,000 they earned prior to the pay hike. That’s a lot less than many individuals in upper management at the GSEs. “Giving massive taxpayer-funded pay raises to Fannie Mae and Freddie Mac isn’t just out of touch, it’s...
Fannie Mae completed its latest credit risk-sharing transaction with reinsurers this week. In CIRT-2015-3, Fannie retains risk for the first 50 basis points of loss on a $7 billion pool of loans. If this $35.2 million retention layer were exhausted, reinsurers would cover the next 250 basis points of loss on the pool, up to a maximum coverage of approximately $176.2 million. Coverage is provided based upon actual losses for a term of 10 years. Depending upon the paydown of the insured pool and the amount of insured loans that become seriously delinquent, the aggregate coverage amount may be reduced at the three-year anniversary and each anniversary of the effective date thereafter.
It has been a full year since the Federal Housing Finance Agency proposed sweeping changes to the Federal Home Loan Bank membership rules and the agency said as recently as this week that the proposal remains under review. With the membership rules up in the air, last week the American Bankers Association penned a letter to the Senate urging that it adopt legislation requiring the FHFA to withdraw the proposal. In September 2014, the FHFA proposed changes that would require members to hold 10 percent of their assets in residential mortgages on an “ongoing” basis and ban captive entities from the definition of insurance companies. The revised asset test was especially controversial among community banks.
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