Freddie Mac and MGIC Investment Corp. have reached a tentative agreement to settle their simmering dispute over pool insurance, the mortgage insurer announced this week. Milwaukee-based MGIC will make payments to the GSE over four years under the arrangement, which required approval from the boards of both firms, as well as from the Federal Housing Finance Agency.
The streamlined short sale programs announced last summer by Fannie Mae and Freddie Mac received an extra boost from mortgage insurers as the programs took effect Nov 1.The GSEs this week announced signed delegation agreements with nine private mortgage insurance companies to allow Fannie and Freddie servicers to complete short sales and deeds-in-lieu without seeking approval from the MI.
The governments civil mortgage fraud lawsuit filed last week against Bank of America and Countrywide Financial for allegedly scheming to defraud Fannie Mae and Freddie Mac could have serious adverse consequences for the industry going forward, according to an industry attorney. Filed by the U.S. Attorney for the Southern District of New York, the government contends that since the U.S. Treasury has been forced to bail out the two GSEs, losses suffered by Fannie and Freddie can be recovered under the False Claims Act a federal law that provides for treble damages and penalties. Laurence Platt, financial services practice leader at K&L Gates, warned participants during an Inside Mortgage Finance webinar that the governments lawsuit against BofA and others like it sure to follow, threatens to turn every low-level rep and warranty with Fannie or Freddie into a federal case.
The Federal Housing Finance Agency can and should impose greater transparency standards on Fannie Mae and Freddie Mac given the two GSEs linchpin role in the mortgage market today, according to the head of the Mortgage Bankers Association. MBA President and CEO David Stevens at the associations annual convention in Chicago two weeks ago called for the Finance Agency as GSE conservator to require Fannie and Freddie to comply with public notice and comment rules before the GSEs impose new rules on the real estate finance industry. Taxpayer-supported Fannie and Freddie, along with Ginnie Mae a wholly owned government corporation within the Department of Housing and Urban Development currently backstop some 90 percent of all new mortgages.
The Federal Housing Finance Agency recently issued an updated strategic plan in which the FHFA outlines the next phase of conservatorship for the GSEs, Fannie Mae and Freddie Mac. The FHFAs plan establishes restrictions and expectations for the GSEs, which have been under government conservatorship since September 2008, but the agency does not manage the day-to-day operations of the two companies. Just like the draft document first submitted to Congress earlier this year, the FHFAs updated Strategic Plan: Fiscal Years 2013-2017 sets four broad goals for the Finance Agency: safe and sound housing GSEs; stability, liquidity, and access in housing finance; preserve and conserve the GSEs assets; and prepare for the future of housing finance in the U.S.
Fannie Mae and Freddie Mac this week directed servicers to inform homeowners reeling from the damage inflicted by Hurricane Sandy that they may be eligible for a temporary reprieve on their mortgage payments. The GSEs announcement reiterated their policy on mortgage relief to borrowers located in jurisdictions that the president has declared to be major disaster areas.
The use of conventional conforming mortgages in the home purchase market, which fell to the lowest level in more than a decade last year, is staging a comeback in 2012. A combination of events particularly increased home buying by higher-income current homeowners and more attractive pricing for higher loan-to-value ratio conventional financing appears to be fueling the growth. Perhaps the most visible sign of the growth in the conventional side of the home purchase market can be found in Fannie Maes and Freddie Macs latest mortgage activity numbers. According to data compiled by Inside Mortgage Finance, the combined home purchase mortgage business of Fannie and Freddie climbed to $77.6 billion in the third quarter of this year. That was not only up 33.6 percent from the second quarters volume, but put...
Fannie Mae and Freddie Mac could repay the U.S. Treasury faster than previously forecast, according to updated projections of potential draws for the two government-sponsored enterprises issued last week by the GSEs conservator. According to the Federal Housing Finance Agency, Fannie and Freddie are expected to draw between $191 billion and $209 billion from Treasury by the end of 2015. This years reduced and more stable projection by the FHFA is lower than the previous estimate made only a year ago, which offered a range of between $220 billion and $311 billion for total support through the end of 2014. The key drivers of those results include...
The Department of Justices recent civil lawsuit against Bank of America/Countrywide over allegedly defective loans sold to Fannie Mae and Freddie Mac is a clear sign of the governments more aggressive use of the False Claims Act and the 1989 thrift bailout law to target not only participants in government loan programs but any lender who sold loans to the government-sponsored enterprises, according to industry lawyers. Filed last week by the U.S. Attorney for the Southern District of New York, the suit is another example of the governments increasingly aggressive effort to recoup taxpayer losses from the financial meltdown and to remind potential violators of the significant whistleblower provisions in the FCA and the Financial, Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), noted the Washington, DC, law firm BuckleySandler. The DOJ is following...
Republicans in the House will approve a package of legislation to reform the government-sponsored enterprises next year, according to the chief of staff for Rep. David Schweikert, R-AZ. The Arizona lawmaker is also working on a bipartisan bill to establish a framework for the non-agency mortgage-backed security market. Speaking at the ABS East conference sponsored by Information Management Network this week in Miami, Matthew Tully, chief of staff for Schweikert, said GSE reform is a top agenda item for House ...