Fannie Mae and Freddie Mac mortgages originated in five states that have unusually slow foreclosure timelines would be subject to an additional, upfront guaranty fee, according to a proposal unveiled late this week by the Federal Housing Finance Agency. If implemented, the Finance Agencys proposal would target five states Connecticut, Florida, Illinois, New Jersey and New York for an additional, one-shot guaranty fee of between 15 and 30 basis points in 2013. The size of the fee adjustments are intended to reflect the disparity in costs, as compared to the national average, explained the FHFA.
Although all of Fannie Maes nearly 700 real estate-owned properties sold earlier this month as part of the Federal Housing Finance Agencys first announced REO pilot transaction moved at near or above market value, a market analyst says it remains to be seen whether this deal is the shape of things to come. San Diego-based Pacifica Companies LLC was the winning bidder of 699 Fannie properties throughout Florida. The firm paid $12.3 million for a share in a joint venture with Fannie, resulting in an estimated transaction valuation to the GSE of $78.1 million or nearly 96 percent of the properties estimated value, according to the transaction summary.
Fannie Mae announced this week it has tapped Bradley Lerman to be the GSEs new executive vice president, general counsel and corporate secretary. Lerman, 56, joins Fannie Mae from Pfizer where he was senior vice president, associate general counsel and chief litigation counsel.Lerman replaces Timothy Mayopoulos, who was promoted to CEO in June.
The Federal Housing Finance Agency is currently pondering how, or whether, the GSE conservator will intervene in the controversial and ever more contentious proposal to use local eminent domain laws to effect principal reduction for homeowners by seizing mortgage loans. Early last month, the FHFA cited significant concerns about the eminent domain proposals, warning that action might be necessary on its part to avoid a risk to the safe and sound operations of Fannie Mae and Freddie Mac, as well as to avoid taxpayer expense. Some 74 organizations and members responded to FHFAs request for input and submitted comment letters. The acting director will consider the input received in making a final decision, said a Finance Agency spokesman.
Fitch Ratings said it has affirmed the AAA long-term issuer default rating and support floors of the Federal Home Loan Bank of Atlanta.Fitch noted that as a GSE, the Atlanta Banks IDRs are linked to the U.S. sovereign rating. FHLBank Atlanta has historically benefited from its affiliation with the U.S. government and its current IDRs and outlook benefit from the implicit support that it receives, said the rating agency. Fitch believes that implicit sovereign support for the FHLBank system would be forthcoming due to its important mission as it pertains to homeownership, serving as a source of liquidity to its members and the wide global distribution of FHLBanks debt.
Some three years after it was first declared to be on fiscal thin ice, the Federal Home Loan Bank of Seattle took a big step toward firmer financial ground earlier this month. The Federal Housing Finance Agency, which regulates the 12 FHLBanks, reclassified the Seattle Bank as adequately capitalized, allowing it to move forward with plans to repurchase excess capital stock for the first time since December 2008. Even though this initial repurchase amount is relatively small, it is a significant milestone in our return to normal operations, explained FHLBank of Seattle President and CEO Michael Wilson in a letter to members.
The new framework governing Fannie Mae and Freddie Mac repurchase demand activity may have a relatively modest impact on an issue that has been a major factor in the mortgage market over the past few years. Analysts suggest that lenders will be cautious about changing origination strategies that have focused on minimizing buyback risk until they see how the government-sponsored enterprises implement the new policy. Many observers remain concerned about how the GSEs will respond to ongoing pressure from their regulator and the Office of the Inspector General to ...
House Republicans this week made a surprise effort to advance a forgotten GSE reform bill with nominal bipartisan support directly to the House floor. Its unclear whether the effort will succeed but an industry lobbyist says the move was an exercise in futility nonetheless. H.R. 2440, the Market Transparency and Taxpayer Protection Act, from Rep. Robert Hurt, R-VA, was one of more than two dozen suspension bills added to the lineup of expected quick and easy votes. In the House, suspension of the rules is a procedure generally used to quickly pass non-controversial bills. H.R. 2440 had not been advanced for a vote as Inside The GSEs went to press.
The Federal Housing Finance Agencys official watchdog is advising the regulator to apply greater scrutiny to Fannie Mae as it works on a promising initiative to shift poor performing GSE loans to more capable financial institutions. This weeks report by the FHFAs Office of Inspector General found little fault with a controversial transaction last summer between Fannie and Bank of America under the GSEs High Touch Servicing Program. However, the OIG concluded that there was room for improvement in the FHFAs and Fannies supervision of the program.
The new representation and warranty framework for GSE loans announced last week by the Federal Housing Finance Agency will go far to providing a clearer picture of prospective putbacks on loans delivered to the GSEs starting next year but more is needed, analysts conclude. At the FHFAs direction, Fannie Mae and Freddie Mac are implementing a new rep and warrant framework for all conventional loans funded, acquired, securitized or guaranteed on or after Jan. 1, 2013. The new framework places greater emphasis on quality control review processes to be applied when the loans are delivered to the GSEs earlier in the loan process and improves the clarity around repurchase requests, noted Fitch Ratings.