The Federal Housing Finance Agency has settled its second mortgage-backed securities lawsuit in its massive litigation effort against non-agency MBS issuers and underwriters that sold to Fannie Mae and Freddie Mac. Citigroup last week agreed to pay damages to settle allegations that the investment bank sold $3.5 billion of faulty MBS to the two GSEs in the years leading up to the financial crisis. The FHFA filed suit during the summer of 2011 against 18 financial institutions, including Citi, alleging violations of the federal Securities Act of 1933.
The Federal Housing Finance Agency would see the 12 Federal Home Loan Banks come up with their own internal credit rating system under a proposed rule issued by the FHFA two weeks ago. Published in the May 23 Federal Register, the Finance Agency proposal would remove a number of credit rating references and requirements in certain safety and soundness regulations affecting the FHLBanks. FHFA regulations require the FHLBanks to assess the credit-worthiness of a security or money market instrument that either the Bank is considering investing in or the Bank is helping another financial institution invest in.
The draft includes numerous provisions designed to ensure access to the revamped secondary market for credit unions and community banks with less than $10 billion in assets.
In its 10-Q filing for the first quarter, Fannie Mae reported $3.74 billion of “gross unrealized gains” on a host of different securities in its “available for sale” account.
The bipartisan Senate legislation being drafted to finally resolve the conservatorships of Fannie Mae and Freddie Mac attempts to meet the needs of a lot of interests in the mortgage finance industry, including small lenders, Wall Street, the multifamily business and even, potentially, current owners of common stock issued by the two government-sponsored enterprises. A discussion draft of the bill, the Secondary Mortgage Market Reform and Taxpayer Protection Act of 2013, outlines a broad plan for shutting down Fannie and Freddie and replacing them with a new entity – the Federal Mortgage Insurance Corp. – that is intended as a transition to a fully private mortgage market. A copy of the draft legislation, which is primarily the work of Sens. Bob Corker, R-TN, and Mark Warner, D-VA, was provided to Inside Mortgage Finance. The draft bill includes...
Small lenders should be afforded “equal access” to the secondary market and the same execution opportunities as their larger contemporaries, and they would under a reform plan proposed by the Mortgage Bankers Association. A “concept paper” released by the MBA this week recommends immediate steps the Federal Housing Finance Agency can take by way of secondary market reform of the government-sponsored enterprises Fannie Mae and Freddie Mac on behalf of lenders of all sizes, including inducing comparable guaranty fees and eliminating underwriting concessions for large lenders. The MBA called...
Despite the best efforts of supporters readying another push to legislatively enhance the Home Affordable Refinance Program, a proposed HARP 3.0 bill in the Senate will ultimately remain a once-interesting idea whose time has passed, say industry observers. From its initial introduction during the 112th Congress through subsequent tweaking and refiling earlier this year, the Responsible Homeowner Refinancing Act of 2013, S. 249, by Sens. Robert Menendez, D-NJ, and Barbara Boxer, D-CA, has struggled to gain traction in the Senate. The Obama administration has mounted...
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