Fannie Mae, Freddie Mac and the Federal Home Loan Banks will now be required to report directly any suspected fraud to the Financial Crimes Enforcement Network under the terms of a final rule. Published in the Feb. 25 Federal Register, the final rule adopts “without significant change” FinCEN’s November 2011 proposal to require the GSEs to file suspicious activity reports directly with FinCEN rather than through their own regulator, the Federal Housing Finance Agency.
Despite gains in oversight and reform of the compensation packages for Fannie Mae's and Freddie Mac's top-level executives, the Federal Housing Finance Agency did not keep a close eye on the pay packages for scores of GSE vice presidents and directors, according to the FHFA’s official watchdog. In a heavily redacted draft memo released to the public, the FHFA’s Office of Inspector General said that while the agency reviewed and examined the GSEs' executive compensation, it did not keep close tabs on “non-executive senior professional compensation practices.”
First Horizon National Corp. announced last week it entered into a “definitive resolution agreement” with Freddie Mac regarding loan repurchase issues. The agreement settles all representation and warranty claims related to loans sold by First Horizon to Freddie Mac from 2000 to 2008. First Horizon CEO Bryan Jordan said in a statement the agreement with the GSE is “a big step forward” in the company’s ongoing efforts to unwind from the mortgage business the firm sold in 2008.
Fannie, Freddie Slashed CMBS Holdings in 2013. Fannie Mae and Freddie Mac continued to sell off their holdings of non-agency commercial mortgage-backed securities as the preferred strategy for meeting their regulator's demand that the two GSEs accelerate the reduction in their retained mortgage portfolios.The two GSEs reduced their CMBS holdings by 51.4 percent over the course of 2013, according to an analysis of year-end financial statements.
Higher guaranty fees and improving housing markets propelled Fannie Mae and Freddie Mac to banner profits during the fourth quarter of 2013 and for the year as whole. The two GSEs reported a combined 2013 net income of $133 billion, helped by significant nonrecurring items related to deferred tax allowance valuation reversals, private-label residential mortgage-backed security lawsuit settlements, increased representation and warranty settlements, and sizeable decreases in loan-loss reserves.
Fannie Mae and Freddie Mac issued $44.6 billion in single-family mortgage-backed securities during the month of February, a 5.1 percent monthly decline and a 62.0 percent drop for the first two months of 2014. February’s decline was less steep than January’s 15.8 percent month-to-month fall off in MBS. Top-ranked Wells Fargo’s Fannie and Freddie securitization at $6.70 billion rose by 25.9 percent on a monthly basis but dropped 71.9 percent year-to-date.
The advance business for the 12 Federal Home Loan Banks increased throughout 2013 ending the year ahead both on a quarterly and an annual basis, according to preliminary figures released by the Federal Home Loan Bank Office of Finance. Advances increased 7.2 percent to $498.6 billion during the fourth quarter of 2013 while posting an even larger 17.1 percent increase from $425.8 billion a year earlier. The Office of Finance attributed the increase in advances due to “higher member borrowing, particularly by large-asset members.”
Loan correspondents and mortgage brokers continue to play a major role in the agency mortgage market, accounting for 42.9 percent of loans securitized by Fannie Mae, Freddie Mac and Ginnie Mae in 2013, according to a new Inside Mortgage Trends analysis. Correspondents accounted for most of the third-party originations securitized by the agencies, and Wells Fargo was the top producer of these loans. Just over half of the loans sold by Wells were ... [Includes one data chart]
A Miami-based investment management firm is accusing the boards of directors of Fannie Mae and Freddie Mac of failing in their fiduciary responsibilities to the holders of the government-sponsored enterprises’ junior preferred and common stock. Fairholme Capital Management, one of the largest holders of junior preferred stock of the GSEs, says the boards need to improve their corporate governance. “At present, you remain...
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