Both Fannie Mae and Freddie Mac retained their dominant shares of mortgage-backed securities with something of a slide during the second quarter of 2012, according to an Inside The GSEs analysis. The two GSEs issued a combined $273.9 billion MBS during the second quarter, a 10.2 percent decrease from the first quarter. Compared to the second quarter of last year, however, Fannie and Freddie saw an ample 76.8 percent increase in MBS issuance.
A federal appeals court has agreed to hear a rare appeal by one of the non-agency mortgage-backed securities issuers and underwriters being sued by the Federal Housing Finance Agency for allegedly misrepresenting the deals that were sold to Fannie Mae and Freddie Mac. A three-judge panel of the Second Circuit Court of Appeals accepted UBS Americas appeal to re-argue and reverse a lower courts denial of the banks motion to dismiss the FHFAs suit as time-barred under the Housing and Economic Recovery Act.The FHFA sued UBS in July 2011 on behalf of Fannie and Freddie, seeking damages and civil penalties on behalf of the government-sponsored enterprises under the Securities Act of 1933.
The Federal Housing Finance Agency violated federal law when it rolled back the Property Assessed Clean Energy program without going through the required notice and comment period, a California federal judge ruled earlier this month. U.S. District Judge Claudia Wilkens Aug. 9 ruling held that the FHFA was not acting as conservator of Fannie Mae and Freddie Mac but as a regulator that had improperly exercised substantive regulatory oversight in violation of the Administrative Procedure Act when the agency put a stop to GSE involvement with PACE programs.The FHFAs directives on PACE obligations amount to substantive rule-making, not an interpretation of rules that would be exempt from the notice and comment requirement, wrote Judge Wilken. The notice and comment process must be followed.
A New York federal judge has denied a motion by former Fannie Mae top executives to dismiss a civil action brought against them by the Securities and Exchange Commission concerning the companys misrepresentations about its exposure to subprime and Alt A mortgages in the two years leading up to the GSEs government takeover. On Aug. 10, U.S. District Court Judge Paul Crotty rejected the motion brought by former Fannie CEO Daniel Mudd, former Chief Risk Officer Enrico Dallavecchia and former EVP for Single Family Thomas Lund. The defendant trio argued that investors had sufficient information to form their own conclusions about the viability of Fannies subprime and Alt A portfolio.
Fannie Mae and Freddie Mac mortgage-backed securities remained the preferred investment choice of the 12 Federal Home Loan Banks during the second quarter of 2012, with a modest increase from the previous quarter, according to a new analysis and ranking by Inside The GSEs based on data from the Federal Housing Finance Agency. Meanwhile, Ginnie Mae securities posted an ever-so-slight decline within the FHLBank system during the period ending June 30, 2012. GSE MBS accounted for 72.0 percent of combined FHLBank MBS portfolios, up 2.7 percent from the first quarter. The Finance Agencys data do not separately break out Fannie and Freddie volume or share.
Plans to hasten the resolution of Fannie Mae and Freddie Mac through an amended preferred stock purchase agreement (PSPA) announced last week by the Treasury Department and the Federal Housing Finance Agency has elicited mixed responses from stakeholders. Views vary as to whether the new deal will actually benefit taxpayers or simply protect holders of government-sponsored enterprise debt. The revised agreement will speed up the reduction of both GSEs investment portfolios, from an annual rate of 10 percent to ...
Six federal financial regulatory agencies have put out a proposal to establish new appraisal requirements for mortgage loans deemed to be higher risk. The Dodd-Frank Act generally defines a higher-risk mortgage as a closed-end consumer credit transaction secured by a principal dwelling with an annual percentage rate exceeding certain statutory thresholds (1.5 percent for first-lien loans, 2.5 percent for first-lien jumbo loans, and 3.5 percent for subordinate-lien loans). Qualified mortgages will be exempt from this...
The Federal Housing Finance Agency became the biggest opponent of proposals for local governments to use eminent domain to seize underwater loans from non-agency mortgage-backed securities. FHFA has determined that action may be necessary on its part to avoid a risk to safe and sound operations at its regulated entities and to avoid taxpayer expense, the conservator of the government-sponsored enterprises said in response to the proposed use of eminent domain to forgive principal on mortgages ...
A three-judge federal panel this week agreed to hear a rare interlocutory appeal by one of the defendants in a series of lawsuits that the Federal Housing Finance Agency has filed in connection with non-agency MBS purchased by Fannie Mae and Freddie Mac. The Second Circuit Court of Appeals accepted UBS Americas appeal, which had been certified by Judge Denise Cote of the U.S. District Court of New York in late June. UBS seeks to re-argue and reverse Judge Cotes May 4 denial of the banks motion to dismiss on statute of limitation grounds. The FHFA sued...
The Department of Housing and Urban Development is looking into SunTrust Banks FHA-related lending practices, the bank reported in its latest regulatory filing. SunTrust, Atlantas largest bank, disclosed the investigation in its second-quarter filing with the Securities and Exchange Commission but provided no additional details. HUD notified the bank of the probe on April 25. SunTrust said it is cooperating with the investigation, which is being conducted by HUDs Office of the Inspector General. The bank did not respond to a request for comment and the IG office neither ...