A growing challenge for Fannie Mae and Freddie Mac is the “increasingly vigilant role” of the Federal Housing Finance Agency Office of Inspector General, according to an industry expert. “The FHFA Inspector General, like most IGs, takes his responsibilities seriously, but tends to view things as, if they’re not 100 percent right, then they’re wrong,” said Bob Bostrom, a partner at the SNR Denton law firm. “He has, I believe, had a chilling effect on the willingness of the enterprises, and the FHFA in some cases, to make business decisions,” the former Freddie official said during the American Mortgage Conference sponsored by the North Carolina Bankers Association. The best example of that occured at year-end 2010, when Fannie and Freddie both reached...
Uncertainty about risk in a rapidly changing regulatory environment and the still destabilized economics of the housing market continue to keep private capital from returning to the mortgage market, according to industry officials at this week’s American Mortgage Conference sponsored by the North Carolina Bankers Association. “Everybody’s very concerned about the role of the government, that the government is supporting too much of the marketplace today,” said Meg Burns, senior associate director for housing and regulatory policy for the Federal Housing Finance Agency. “But it’s really hard to envision how people can pull back from that government support when we don’t actually understand not only who holds the credit risk but what the requirements are for retaining that risk in terms of capital.” All of the Dodd-Frank Act regulations that are still in play are...
Mortgage industry officials are lauding the Federal Housing Finance Agency’s long-awaited move toward clarity on repurchase demands made by Fannie Mae and Freddie Mac based on lenders’ representations and warranties. Part of a broader series of FHFA strategic initiatives called seller-servicer contract harmonization, the new rep and warranty framework on GSE mortgages sold or delivered on or after Jan. 1, 2013, “aims to clarify lenders’ repurchase exposure and liability on future deliveries,” according to FHFA Acting Director Edward Demarco. “Lenders want more certainty about their risk exposure and the enterprises want...[Includes two data charts]
The Federal Housing Finance Agency’s streamlined short sale guidelines set to kick in Nov. 1 could increase losses on certain home-equity loans and second liens held in bank portfolios, according to a recent analysis by Fitch Ratings. Under the new guidelines, which were announced last month, servicers will be able to accelerate their processing of a short sale for borrowers with eligible hardships without any additional approval from either of the government-sponsored enterprises. This will ...
Fifth Third Bank received the highest ranking among servicers ranked by Fannie May during the first half of 2012, the GSE recently announced. In 2011, Fannie rolled out its Servicer Total Achievement and Rewards (STAR) program, designed to encourage customer service improvements and better foreclosure prevention outcomes for homeowners by rating servicers on their performance in those areas.
Mortgage repurchases and indemnifications by Fannie Mae and Freddie Mac seller-servicers increased during the second quarter of 2012, but the inventory of pending and disputed buyback demands continued to grow. A new Inside Mortgage Trends analysis of repurchase disclosures made by the two government-sponsored enterprises reveals that lenders repurchased some $3.03 billion of home loans, or otherwise indemnified the GSEs for losses on these loans, during the second quarter. That was ... [Includes one data chart]
The Federal Housing Finance Agency has failed to implement its initiative to dispose of GSE and government-held real estate-owned properties in an “open and transparent manner” in the Golden State, according to the California Association of Realtors. Two weeks ago CAR renewed its vocal opposition to the FHFA’s implementation of an REO bulk sales pilot initiative in California, accusing the Finance Agency of advancing the program in a “highly secretive manner” despite the “negative economic impact” the trade group says it will have on the state’s housing market.
Given that Fannie Mae and Freddie Mac were a “primary cause” of the housing crisis, the two GSEs should be “wound down in size and scope,” according to the Republican party platform. Unveiled last week during the GOP convention in Tampa where former Massachusetts Governor Mitt Romney was confirmed as the party’s presidential nominee, the platform made mention of the Republican position on principal reduction, noting that “taxpayer dollars should not be used to bail out borrowers and lenders by funding principal write-downs.”
The average fee charged by Fannie Mae and Freddie Mac to lenders rose last year, while payments collected on the Home Affordable Refinance Program dropped off, according to the Federal Housing Finance Agency.The fourth-annual FHFA study found that the average total guaranty fee charged by Fannie and Freddie on single-family mortgages was 28 basis points in 2011, compared to 26 bps in 2010. When HARP and flexible refinance loans were excluded, the FHFA said the total average g-fee increased to 26 basis points in 2011 from 24 basis points in 2010. “That change reflects increases in both the average ongoing fee and the average upfront fee,” the FHFA report said.
The Federal Housing Finance Agency is suing a unit of Deutsche Bank demanding the bank repurchase loans backing now toxic mortgage securities. Acting as conservator to Freddie Mac, the FHFA filed suit on Aug. 24 in New York State Supreme Court in Manhattan against DB Structured Products Inc. The Finance Agency alleges that DBSP breached promises about loans that were pooled and securitized and failed to repurchase the loans as required, according to the agency’s court filing.
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