A recent white paper by the Federal Housing Finance Agency Office of the Inspector General highlights the precariousness of GSE profitability. The IG questions whether Fannie Mae and Freddie Mac has the muscle to withstand adverse market conditions or other changes and uncertainties that could lead to additional losses.“The enterprises’ conditions have stabilized and market conditions have improved since 2008. They returned to profitability in 2012; however, the level of earnings they experienced in 2013 and 2014 is not sustainable over the long term,” the paper said. Record-breaking profits of a combined $132.6 billion were reported in 2013 for Fannie Mae and Freddie Mac. That number dropped significantly the following year to $21.9 billion.
The Federal Finance Housing Agency needs to be vigilant in its continued oversight in its management of Fannie Mae and Freddie Mac, according a report from the Office of the Inspector General. Because the FHFA’s actions aren’t subject to judicial review, the OIG said its oversight of the FHFA conservatorship actions and processes “is critical to safeguard taxpayer dollars and ensure that the FHFA is fulfilling its statutory duties.” In the new white paper, the OIG said Congress vested the FHFA with “sweeping powers” as conservator to potentially control every decision the enterprises make.In 2014 alone, the FHFA flexed its muscle to take more than 750 conservatorship “actions” against Fannie and Freddie.
New GSE Reserve Fund Bill. Rep. Marsha Blackburn, R-TN, introduced legislation on March 26 requiring the GSEs to send future profits to a newly established reserve fund administered by the FHFA. The bill is titled ''Enterprise Secondary Reserve Taxpayer Protection and Government Accountability Act of 2015'' and it would “establish a secondary reserve fund for a housing enterprise under conservatorship to protect taxpayers against loss in the event of a housing downturn, and for other purposes." Jumpstart GSE Reform Amendment. On March 25, Sens. Bob Corker, D-TN, and Mark Warner, D-VA, offered an amendment to the Jumpstart GSE Reform Act that would prohibit...
Freddie Mac is offering another bulk sale of delinquent loans but is not releasing the details just yet. Thomas Fitzgerald, company spokesman, confirmed on Monday that there are nonperforming loans for sale, making this Freddie’s second offering this year so far. “We are sharing details about the sale solely with prospective bidders,” he said, adding that Freddie anticipates on providing more specifics on the results after the auction. Fitzgerald did confirm that the loans in the transaction are “deeply delinquent,” at least two years old, and said “the sales process is a round-one competitive auction.” Bloomberg reported that the three pools amount to $1 billion in nonperforming loans...
The headline might sound promising, but keep in mind that during the housing boom of 2003 to 2007, the industry averaged nearly $340 billion a year in home-equity originations.
In early April, the Federal Housing Finance Agency is expected to issue its long-awaited proclamation on guaranty fees with the likely outcome of no change whatsoever in the base fees charged by the two government-sponsored enterprises, according to officials tracking the issue. Few lenders are counting on a reduction in the current “ongoing” GSE fee, which increased from 13 basis points in 2009 to 40 bps in 2013, according to the FHFA. But there could be relief on ...
State regulators proposed prudential standards for nonbank servicers this week, including provisions that would apply solely to “large, complex” servicers. Many of the standards align with generally accepted business practices and existing standards, including those established by the government-sponsored enterprises. “State regulators have primary credentialing and licensing authority over nonbank mortgage servicers, and are working to ensure ...
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